1 MEMORANDUM

Subject: Response to Public Comments on Proposed Amendments to Na tional Emission
Standards for Hazardous Air Pollutants for Existing Stationary Reciprocating Internal Combustion Engines and New Source Performance Standards for Stationary Internal Combustion Engines
From: Melanie King, Energy Strategies Group
To: EPA Docket EPA-HQ-OAR-2008-0708
Date: January 14, 2013

On June 7, 2012, the Environmental Protection Agen cy (EPA) proposed amendments to the national
emission standards for hazardous ai r pollutants (NESHAP) for stati onary reciprocating internal combustion engines (RICE) in 40 CFR part 63, s ubpart ZZZZ (77 FR 33812). Th e EPA also proposed
amendments to the New Source Performance Standa rds (NSPS) for Stationa ry Internal Combustion Engines in 40 CFR part 60, subpart s IIII and JJJJ on that same date. In addition, the EPA reopened the comment period on October 3, 2012 to solicit comments on one specific issue regarding existing engines on offshore vessels (77 FR 60341). The purpose of this document is to present a summary of the public comments that EPA received on the proposed rule and the responses developed. This summary of comments and responses serves as the basis for revi sions made to the standards between proposal and promulgation.

EPA received 584 public comments on the proposed ru le. Of these, 305 comments were from private citizens. A listing of all organizations submitting comments, their affiliation, and the Document ID for their comments is presented in Table 1. All comments can be obtained online fr om the Federal Docket Management System at http://www.regulations.gov . The docket number for this rulemaking is EPA-HQOAR-2008-0708. In this document, commenters are identif ied by the last three or four digits of the
Document ID of their comments.

Of the private citizens who submitted public comments, the vast majority (more than 75 percent) were from two states: Pennsylvania and Ne w York. The rest of the private citizen commenters were scattered from other regions of the country. Most of the priv ate citizen commenters opposed the proposal to allow spark ignition (SI) RICE to avoid installation of polluti on controls because of past and future health and economic impacts on their rural neighbors. In contrast , some private citizens supported the remote area2 source SI RICE provisions as well as the demand re sponse (DR) and peak shaving provisions because these provisions would help ensure reliability of the electric grid and prevent blackouts, particularly in rural areas of the country. Some private citizen s also suggested that the EPA should provide more flexibility to sources to operate under the DR and peak shaving programs, e.g., allow use of emergency engines for up to 100 hours per year (hrs/yr) fo r any purpose and remove the April 16, 2017 sunset provision for peak shaving for some sources. Other privat e citizen commenters were concerned that the rule would result in electric utility rate increas es. A few private citizen commenters supported the Alaska remote provisions, but suggested changes to clarify the definition. Finally a few private citizens said that the compliance deadlines should be extended.3 Table 1. List of Commenters on th e Proposed NESHAP and NSPS for Existing Stationary Reciprocat ing Internal Combustion Engines

Document ID 1,2,3,4 Commenter Affiliation EPA-HQ-OAR-2008-0708-0867 5 Stephanie Moyer, Environmental Quality Program Specialist, NSPS Coordinator, Program Planning & Development Unit Nebraska Air Quality Division

EPA-HQ-OAR-2008-0708-0872 Yury Lundin, Faciliti es Director Kaiser WLA Medical Center EPA-HQ-OAR-2008-0708-0873 Randy L. Groff, Director of Facilities and Energy Four Seasons Produce, Inc.
EPA-HQ-OAR-2008-0708-0874 Tim MCConnell, Electric Division Manager Kethican Public Utilities (KPU)
EPA-HQ-OAR-2008-0708-0875 Brad Baumann Marvin Windows and Doors EPA-HQ-OAR-2008-0708-0876 Wes Pooler, Director, Facilities Management Fletcher Allen Health Care
EPA-HQ-OAR-2008-0708-0877 Darron Scott, Presiden t/CEO Kodiak Electronic Association (KEA) EPA-HQ-OAR-2008-0708-0878 6 EPA-HQ-OAR-2008-0708-0886 Stephen M. Butka Hague Equipment Company of Michigan, Inc. EPA-HQ-OAR-2008-0708-0879 Donald Kooiman, Director of Facilities Sanford USD Medical Center
EPA-HQ-OAR-2008-0708-0880 Da vid R. Bell, Facility Supervisor/Sustainability Engineer BD Diagnostic Systems (BD)
EPA-HQ-OAR-2008-0708-0881 Roger Schellenberger, Data Center Manager The Telx Group, Inc.
EPA-HQ-OAR-2008-0708-0882 Richard A. Stedman, Air Pollution Control Officer Monterey Bay Unified Air Pollution Control District (MBUAPCD) EPA-HQ-OAR-2008-0708-0883 Ron Prediger and Barbara Beck Beaver Dam, LLC EPA-HQ-OAR-2008-0708-0884 Williamn J. Jones Swatara Township Authority EPA-HQ-OAR-2008-0708-0885 Duane Lehman Esbenshade Farms EPA-HQ-OAR-2008-0708-0887 Joseph A. Am abeli, Superintendent City of Alliance Water and Wastewater Treatment Plant, Alliance, Ohio EPA-HQ-OAR-2008-0708-0888 Stephen M. Lowe, CHFM, Director Engineering and Safety East Texas Medical Center (ETMC)
EPA-HQ-OAR-2008-0708-0889 Matthew Shields, Milford Facilities Manager Milton CAT
EPA-HQ-OAR-2008-0708-0891 Chris Gebhardt, President VIRTBIZ Internet Services EPA-HQ-OAR-2008-0708-0892 Robert Brow n, President Harsh International EPA-HQ-OAR-2008-0708-0893 John S. Faile, S uperintendent Lincoln Water Commission EPA-HQ-OAR-2008-0708-0894 Quinlan J. Shea, III, Vice President Environment Edison Electric Institute

1 EPA-HQ-OAR-2008-0708-0890 is the Manufacturers of Emission Controls Association’s (MECA) oral testimony from 7/10/12 Public Hearing and is included in the transcript from the hearing (EPA-HQ-OAR-2008-0708-0944). 2 EPA-HQ-OAR-2008-0708-0917 is background material and not a comment. 3 EPA-HQ-OAR-2008-0708-0944 is the 7/10/12 public hearing transcript and not a comment. 4 The EPA received more than 300 comments from private citizens, which are not listed in this table. 5 EPA-HQ-OAR-2008-0708-0868 is Calpine’s public hearing request and brief comments. Calpine’s comments are reflected in EPA-HQ-OAR-2008-0708-1134. 6 The commenter submitted very similar comments twice and comments in this document are represented by ID 886.4 Document ID 1,2,3,4 Commenter Affiliation (EEI) EPA-HQ-OAR-2008-0708-0895 Alan Quimby, Chief Sanitary Engineer Sanitary District, Department of Public Works, Queen Anne’s County, Maryland EPA-HQ-OAR-2008-0708-0896 Jeff Biggs, Executive Vice President of Operations & Technology Peak 10 Inc.
EPA-HQ-OAR-2008-0708-0897 Chris Albrecht, Environmental Manager, Aviation Department City of Albuquerque, New Mexico
EPA-HQ-OAR-2008-0708-0898 Sami Sarrough, Energy Mana ger Division of Water, Department of Public Utilities, City of Cleveland, Ohio EPA-HQ-OAR-2008-0708-0899 Darre n Eyler, Director Facilities Operations, Equinix EPA-HQ-OAR-2008-0708-0900 Gilbert Perez, Director of Operations Victor Valley Wastewater Authority (VVWRA) EPA-HQ-OAR-2008-0708-0901 Paul Bauer, VP Operational Affairs Mountain High EPA-HQ-OAR-2008-0708-0902 John A. Ackiewicz, AWI Environmental/ABP Senior EHS Manager, Corporate EH&S Armstrong World Industries, Inc.

EPA-HQ-OAR-2008-0708-0903 Fred Flook, Director, Plant Operations Medical City Dallas Hospital
EPA-HQ-OAR-2008-0708-0904 Mary Burns, Property Manager Obrecht-Riehl & Pinkard, LLC (ORP) EPA-HQ-OAR-2008-0708-0905 Greg Longacre, Facilities Manager CUNA Mutual Group – Fort Worth, UGL Services, Unicco Operations EPA-HQ-OAR-2008-0708-0906 John F. Loughlin, Superi ntendent Rockland Sewer Department, Town of Rockland EPA-HQ-OAR-2008-0708-0907 Rick Johnson, Administrator of Operations Covenant Village of Cromwell
EPA-HQ-OAR-2008-0708-0908 John Therrien, Director of Plant Operations and Security Holyoke Medical Center
EPA-HQ-OAR-2008-0708-0909 Robert Gurdikian, PG, CHMM, Environmental Project Manager Level 3 Communications LLC
EPA-HQ-OAR-2008-0708-0910 George M. Moser, Authorit y Manager Berks-Montgomery Municipal Authority EPA-HQ-OAR-2008-0708-0911 Rudy R. Quintanilla, Chief Engineer Seton Medical Center Hays EPA-HQ-OAR-2008-0708-0912 Kevin Downey, Facilities Engineer, New Product Development Senior Project Manager Whirley-DrinkWorks

EPA-HQ-OAR-2008-0708-0913 Steve Jones, Manager Country View Family Farms EPA-HQ-OAR-2008-0708-0914 Andrew M. Serri, CEO and General Manager Basin Electric Power Cooperative
EPA-HQ-OAR-2008-0708-0915 Bruce Jones, Plant Superi ntendent Ambler Wastewater Treatment Plant (AWWTP) EPA-HQ-OAR-2008-0708-0916 Brad Fehr Riverwiew, LLP EPA-HQ-OAR-2008-0708-0918 Greg Liedtka, Assistant Manager, Facilities Management Elmhurst Memorial Hospital
EPA-HQ-OAR-2008-0708-0919 Matthew L. Hoopes, Assistant Superintendent of Utilities Salem Utilities Department, City of Salem, Ohio EPA-HQ-OAR-2008-0708-0920 Stacey Dahl, Manager of External Affairs Minnkota Power Cooperative, Inc.
EPA-HQ-OAR-2008-0708-0921 John S. Smith, Director of Wastewater Operations Wastewater Treatment Plant, New Freedom Borough, Pennsylvania EPA-HQ-OAR-2008-0708-0922 Michael J. Lodge, Director of Trident Seafoods Corporation5 Document ID 1,2,3,4 Commenter Affiliation Environmental Compliance EPA-HQ-OAR-2008-0708-0923 Paul Oshel, District Engineer Semitropic Water Storage District EPA-HQ-OAR-2008-0708-0924 Meera Kohler, President a nd CEO Alaska Village Electric Cooperative, Inc. EPA-HQ-OAR-2008-0708-0925 Susan Sample, Mayor Pr o Tem The City of West University Place EPA-HQ-OAR-2008-0708-0926 Christopher Peifer, Assistant City Manager and Public Works Director The City of West University Place
EPA-HQ-OAR-2008-0708-0927 Robert Fry, Mayor The City of West University Place EPA-HQ-OAR-2008-0708-0928 Joan Johns on, City Council Member The City of West University Place EPA-HQ-OAR-2008-0708-0929 Dawn De Vries, Air Quality Specialist Encana Oil & Gas (USA), Inc. EPA-HQ-OAR-2008-0708-0930 Gary J. Gaissert, Facilities Manager Brethren Village EPA-HQ-OAR-2008-0708-0931 Ed Heathcott, City Council Member The City of West University Place, Texas EPA-HQ-OAR-2008-0708-0932 Michael Patten, Opera tions Manager The Red Blazer Restaurant EPA-HQ-OAR-2008-0708-0933 Kerby E. Zozula Ventura County Air Pollution Control District, California EPA-HQ-OAR-2008-0708-0934 Michael G. Ross, City Manager The City of West University Place EPA-HQ-OAR-2008-0708-0935 Richard (Dick) Yehle, Council Member The City of West University Place
EPA-HQ-OAR-2008-0708-0936 Barry Halcrow Vi rginia Department of Environmental Quality (VADEQ) EPA-HQ-OAR-2008-0708-0937 Greg Graunke, Maintenance Team Lead, Plant/Maintenance Operations Mercy Medical Center
EPA-HQ-OAR-2008-0708-0938 Roger Isom California Cotton Growers Association, et. al. EPA-HQ-OAR-2008-0708-0939 James M. Lisowski, Assistant General Manager Chicopee Electric Light
EPA-HQ-OAR-2008-0708-0941 Supports comments of EPA-HQ-OAR-2008-0708-1104 Steven Rockwell, Mayor Village of Milan

EPA-HQ-OAR-2008-0708-0942 Supports comments of EPA-HQ-OAR-2008-0708-1104 Eugene M. Toy, City Manager City of Galion, Ohio

EPA-HQ-OAR-2008-0708-0943 Michael DiMauro, Environmental Engineer Massachusetts Municipal Wholesale Electric Company (MMWEC) EPA-HQ-OAR-2008-0708-0945 Supports comments of EPA-HQ-OAR-2008-0708-1104 Michael Goodwin, Village Administrator Village of Monroeville , Monroeville, Ohio

EPA-HQ-OAR-2008-0708-0946 Marilyn Leland, Executiv e Director Alaska Power Association (APA) EPA-HQ-OAR-2008-0708-0947 Samuel Mason, Manager, Marketing & Communications Beltrami Electric Cooperative, Inc.
EPA-HQ-OAR-2008-0708-0948 James R. Paul, General Manager Board of Public Works, Carrollton Municipal Utilities EPA-HQ-OAR-2008-0708-0949 Michael Morris, CEOE, Director of Facilities Hollywood Slot Hotel & Raceway
EPA-HQ-OAR-2008-0708-0950 John W. Gillogley, Special Projects Manager Colorado Department of Corrections (CDOC) EPA-HQ-OAR-2008-0708-0951 Supports comments of EPA-HQ-OAR-2008-0708-1104 Robert Geissman, Mayor The Village of Lodi, Ohio Municipal Electric Utility
EPA-HQ-OAR-2008-0708-0952 Jeff A. Brediger , Director of Utilities Orrville Utilities6 Document ID 1,2,3,4 Commenter Affiliation Supports comments of EPA-HQ-OAR-2008-0708-1104 EPA-HQ-OAR-2008-0708-0953Supports comments of EPA-HQOAR-2008-0708-0982 Joe Aleixo, Manager, Technical Services DCL International Inc.

EPA-HQ-OAR-2008-0708-0954 G. Vinson Hellwig, Chief, Air Quality Division Michigan Department of Environmental Quality EPA-HQ-OAR-2008-0708-0955 Michael Krancer, Secretary Pennsylvania Department of Environmental Protection EPA-HQ-OAR-2008-0708-0956 Rayburn L. Butts, Director, Environmental Services Florida Power and Light Company (FPL)
EPA-HQ-OAR-2008-0708-0957 Chris Thull, Assistant Pl ant Engineer Automatic Rolls of New England EPA-HQ-OAR-2008-0708-0958 Randa ll Christopher, CEM, LEED AP, Energy Manager Health Science Center, University of Texas
EPA-HQ-OAR-2008-0708-0959 Patrick Williams, CHFM, Director of Facilities Las Colinas Medical Center
EPA-HQ-OAR-2008-0708-0960 Jeffre y A. Jones, Manager, Transmission Services Bangor Hydro Electric Company (BHE)
EPA-HQ-OAR-2008-0708-0961 Gera ldine A. Smith, General Environmental Counsel and Managing Director, Environment PSEG Power LLC and PSEG Energy Resources & Trade LLC
EPA-HQ-OAR-2008-0708-0964 Christopher Brewton, Utility Director City and Borough of Sitka, Alaska EPA-HQ-OAR-2008-0708-0965 Susan Wilson, Senior Regulatory Specialist BHP Billiton Petroleum (GOM), Inc.
EPA-HQ-OAR-2008-0708-0966 Karen Kauffman, Office Manager Gle nville Farms, Pennsylvania EPA-HQ-OAR-2008-0708-0967 Pat Bloomquist, Office Administ rator International Union of Operating Engineers Local 49 Training Center (TC) and Associated General Contractors of Minnesota Apprenticeship and Training Program EPA-HQ-OAR-2008-0708-0968 Supports the comments of EPA-HQ-OAR-2008-0708-1082 H. Floyd, Gilzow, Director of Public Affairs Missouri Joint Municipal Electric Utility Commission (MJMEUC)

EPA-HQ-OAR-2008-0708-0969 R oger Williams, Office Administrator Eide Bailly, LLP EPA-HQ-OAR-2008-0708-0970 Supports comments of EPA-HQ-OAR-2008-0708-1104 Eric Norenberg, Oberlin City Manager Oberlin Municipal Light and Power (OMLPS)
EPA-HQ-OAR-2008-0708-0971 Scott A. Wehler, Vice President, Engineering Adams Electric Cooperative, Inc.
EPA-HQ-OAR-2008-0708-0972 David D. Stoneback, Utilities Director City of Evanston, Illinois
EPA-HQ-OAR-2008-0708-0974 Charlie Sakeagak, Director, Department of Public Works North Slope Borough, Alaska
EPA-HQ-OAR-2008-0708-0975 Lance Hovland, VP of Energy Distribution Wright-Hennepin Cooperative Electric Association (WH) EPA-HQ-OAR-2008-0708-0976 Supports the comments of EPA-HQ-OAR-2008-0708-1104 Marilyn John, Mayor City of Shelby, Ohio7 Document ID 1,2,3,4 Commenter Affiliation EPA-HQ-OAR-2008-0708-0977 Steve Tschida, Building Ma intenance Local 49 Training Center, International Union of Operating Engineers EPA-HQ-OAR-2008-0708-0978 Supports the comments of EPA-HQ-OAR-2008-0708-1082 Greg Ellis City of Colby, Kansas

EPA-HQ-OAR-2008-0708-0979 Michael R. Johnson, Maintenance Director North Branch Area Public Schools 138
EPA-HQ-OAR-2008-0708-0980 Len Alabovitz , Plant Manager Pencor/TN Printing EPA-HQ-OAR-2008-0708-0981 Mike G illiland, Director of Utilities City of Osage City, Kansas EPA-HQ-OAR-2008-0708-0982 Joseph Kubsh, Executive Director Manufacturers of Emission Controls Association (MECA) EPA-HQ-OAR-2008-0708-0984 Supports the comments of EPA-HQ-OAR-2008-0708-1082 Joyce E. Martin, City Manager City of Garnett, Kansas

EPA-HQ-OAR-2008-0708-0985 Supports the comments of EPA-HQ-OAR-2008-0708-1104 Ed Palestro, Electric Superintendent City of Hubbard Electric Department

EPA-HQ-OAR-2008-0708-0986 Supports the comments of EPA-HQ-OAR-2008-0708-1104 Rex Katterheinrich, P.E., Administrator Village of New Knoxville, Ohio

EPA-HQ-OAR-2008-0708-0988 Bill Satte rfield, Executive Director Delm arva Poultry Industry, Inc. EPA-HQ-OAR-2008-0708-0989 Phillip M. Mueller, Senior Vice President, Government Affairs and Management Services Illinois Municipal Electric Agency (IMEA)

EPA-HQ-OAR-2008-0708-0990 7 EPA-HQ-OAR-2008-0708-1062 (Revised version of 990) Robert S. Grimm, President and CEO Alaska Power & Telephone Company (AP&T)
EPA-HQ-OAR-2008-0708-0991 Felix Mestey Un ited States Department of Defense EPA-HQ-OAR-2008-0708-0994 Douglas L. Biden, President and Jacob G. Smeltz, Vice President Electric Power Generation Association (EPGA) EPA-HQ-OAR-2008-0708-0995 EPA-HQ-OAR-2008-0708-1013 Jim Frueh, Director of Maintenance & Operations Fargo Public Schools, Fargo, North Dakota
EPA-HQ-OAR-2008-0708-0996 Dave Rosenbrook, Facilities Manager Slumberland Furniture EPA-HQ-OAR-2008-0708-0997 Marvin Denzer, VP Energy Services Minnesota Valley Cooperative (MVEC) EPA-HQ-OAR-2008-0708-0998 Supports comments of EPA-HQ-OAR-2008-0708-0955 EPA-HQ-OAR-2008-0708-1033 EPA-HQ-OAR-2008-0708-0994 Kathryn Z. Klaber, President Marcellus Shale Coalition (MSC)

EPA-HQ-OAR-2008-0708-0999 Supports comments of EPA-HQ-OAR-2008-0708-1102 D. Robert Thompson, Borough Manager Borough of Ephrata

EPA-HQ-OAR-2008-0708-1000 Greg Miller Panhandle Venture II LLC EPA-HQ-OAR-2008-0708-1001 Craig Glazer, Vice President, Federal Government Policy and Jennifer PJM Interconnection, LLC

7 Alaska Power & Telephone submitted two letters, the s econd correcting the previous letter. Alaska Power & Telephone is represented in this summary as 1062.8 Document ID 1,2,3,4 Commenter Affiliation Tribulski, Senior Counsel EPA-HQ-OAR-2008-0708-1002 John W. Mitchell, Di rector Division of Environment, Kansas Department of Health and Environment (KDHE) EPA-HQ-OAR-2008-0708-1003 Richard G. Burud, General Manager Federated Rural Electric EPA-HQ-OAR-2008-0708-1004 Joseph L. Suchecki, Director, Public Affairs Truck & Engine Manufacturers Association (EMA) EPA-HQ-OAR-2008-0708-1005 J. Rosenberg EPA-HQ-OAR-2008-0708-1006 Scott W illis, V.P. Generation Alaska Electric Light & Power Company (AEL&P) EPA-HQ-OAR-2008-0708-1007 Dallas Sloan, Ge neral Manager Barron Electric Cooperative EPA-HQ-OAR-2008-0708-1008 Supports the comments of EPA-HQ-OAR-2008-0708-1056 EPA-HQ-OAR-2008-0708- UARG? Barbara A. Walz, Senior Vice President, External Relations and Environmental Tri-State Generation and Transmission Association, Inc.

EPA-HQ-OAR-2008-0708-1011 EPA-HQ-OAR-2008-0708-1115 Wick Havens, Interim Executive Director Ozone Transport Commission (OTC)
EPA-HQ-OAR-2008-0708-1012 Richard Corey, Deputy Executive Officer Air Resources Board
EPA-HQ-OAR-2008-0708-1014 Ti mothy R. Ford, Facilities Manager PRACS Institute EPA-HQ-OAR-2008-0708-1015 John W. Cox, Jr. Vice President, External Affairs and General Counsel Jo-Carroll Energy, Inc. (NFP)
EPA-HQ-OAR-2008-0708-1016 Graham Richard, Chief Executive Officer Advanced Energy Economy (AEE)
EPA-HQ-OAR-2008-0708-1017 Colin Hansen, Executiv e Director Kansas Municipal Utilities (KMU) EPA-HQ-OAR-2008-0708-1018 Supports the comments of EPA-HQ-OAR-2008-0708-1104 Leon Towarnicki, Interim City Manager City of Martinsville, Martinsville County, Virginia
EPA-HQ-OAR-2008-0708-1019 Ronald L. Horman, Ge neral Manager Redwood Electric Cooperative (REC) EPA-HQ-OAR-2008-0708-1020 William Grygar II, Director Anadarko Petroleum Corporation EPA-HQ-OAR-2008-0708-1021 Steve Albrecht, Director of Public Works City of Burnsville, Minnesota
EPA-HQ-OAR-2008-0708-1022 Timothy N. Mergen, General Manager and CEO Meeker Cooperative Light and Power Association EPA-HQ-OAR-2008-0708-1023 Dave Rosenbrook, Facilities Manager Slumberland, Inc. EPA-HQ-OAR-2008-0708-1024 Elaine J. Garry, Pr esident and CEO People’s Energy Cooperative EPA-HQ-OAR-2008-0708-1025 Mark A. Nielson, V.P. Staff Services Delaware Electric Cooperative EPA-HQ-OAR-2008-0708-1026 Bob Applegat e Virgil Gas Drilling Awareness Coalition EPA-HQ-OAR-2008-0708-1027 Grant K. Sechler, Jr. City Superintendent City of Anthony, Kansas
EPA-HQ-OAR-2008-0708-1028 Peter Rothstein, President New England Clean Energy Council (NECEC) EPA-HQ-OAR-2008-0708-1029 Supports comments of EPA-HQ-OAR-2008-0708-1104 Timothy L. Taylor, Town Manager Town of Richlands, Virginia

EPA-HQ-OAR-2008-0708-1030 Steven B. Smith, Vice President, Environmental and Regulatory Affairs Saint-Gobain Containers, Inc. (SGCI)9 Document ID 1,2,3,4 Commenter Affiliation EPA-HQ-OAR-2008-0708-1031 Gordy Wrobel, President Southeast Conference (SEC) EPA-HQ-OAR-2008-0708-1032 Timothy Serie, Esq. Counsel, Government Affairs and David Darling, Senior Director, Environmental Affairds American Coatings Association (ACA)

EPA-HQ-OAR-2008-0708-1033 Arthur N. Marin, Executive Director Northeast States for Coordinated Air Use Management (NESCAUM) EPA-HQ-OAR-2008-0708-1034 Steve Shurts, President and Chief Executive Officer East Central Energy (ECE)
EPA-HQ-OAR-2008-0708-1035 James Haler, Member Services Manager South Central Electric Association
EPA-HQ-OAR-2008-0708-1036 Robert Ha ug, Executive Director Iowa Association of Municipal Utilities EPA-HQ-OAR-2008-0708-1037 Christopher Petree, Dire ctor Public Works, City of Lakeville, Minnesota EPA-HQ-OAR-2008-0708-1038 Barbara Schulze, Director, Global Safety and the Environment Merck & Co., Inc.
EPA-HQ-OAR-2008-0708-1039 John Fitzpatrick, President and CEO Woodcraft Industries EPA-HQ-OAR-2008-0708-1040 Ralph Kloiber, Real Estate Director HOM Furniture, Inc. EPA-HQ-OAR-2008-0708-1041 Douglas R. Larson, Vice President of Regulatory Services Dakota Electric Association, Minnesota
EPA-HQ-OAR-2008-0708-1042 Karen Price, President West Virginia Manufacturers Association (WVMA) EPA-HQ-OAR-2008-0708-1043 Don DiCristofaro, President Blue Sky Environmental, LLC EPA-HQ-OAR-2008-0708-1044 Arthur W. Iler, Assistant General Counsel Midwest Independent Transmission System, Operators, Inc. (MISO) EPA-HQ-OAR-2008-0708-1045 Bruce L. Rogers, City Manager, Utility Department City of El Dorado Springs, Missouri
EPA-HQ-OAR-2008-0708-1046 J. MorschEPA-HQ-OAR-2008-0708-1047 G.Vinson Hellwig, Michigan, CoChair, NACAA Air Toxics Committee and Robert H. Colby, Chattanooga, Tennessee, Co-Chair, NACAA Air Toxics Committee National Association of Clean Air Agencies (NACAA)

EPA-HQ-OAR-2008-0708-1048 Sout hCross Commerce Center IV EPA-HQ-OAR-2008-0708-1049 Brian Krambeer, Presi dent/CEO Tri-County Electric Cooperative, Minnesota EPA-HQ-OAR-2008-0708-1050 D. R. Headley EPA-HQ-OAR-2008-0708-1051 Lisa G. Dowden, Counsel and Melissa E. Birchard, Counsel Spiegel & McDiarmid LLP on behalf of Kansas Power Pool EPA-HQ-OAR-2008-0708-1052 John T. Graves, Environmental Manager, Minnkota Power Cooperative, Inc.
EPA-HQ-OAR-2008-0708-1053 Kenneth A. Nolan, Manager of Power Resources Burlington Electric Department (BED)
EPA-HQ-OAR-2008-0708-1054 Chris M. Hobson, Chief Environmental Officer, Senior Vice President, Research and Environmental, Affairs Southern Company

EPA-HQ-OAR-2008-0708-1055 Supports the comments of Greg Fritz, Chief Executive Officer North Iowa Municipal Electric Cooperative Association (NIMECA)10 Document ID 1,2,3,4 Commenter Affiliation EPA-HQ-OAR-2008-0708-1036 EPA-HQ-OAR-2008-0708-1082 EPA-HQ-OAR-2008-0708-1056 Ted Cromwell, Sr. Principal, Environmental Policy National Rural Electric Cooperative Association (NRECA)
EPA-HQ-OAR-2008-0708-1059 Scott W. Handy, President & CEO Cass County Electric Cooperative (CCEC)
EPA-HQ-OAR-2008-0708-1060 Mike Roddy, Director of Environmental Affairs, Seminole Electric Cooperative, Inc.
EPA-HQ-OAR-2008-0708-1061 Gregor y Padden, Manager, Member Resources & Pricing, Great River Energy
EPA-HQ-OAR-2008-0708-1063 Carl Rutz, Senior Environmental Manager Alyeska Pipeline Service Company (Alyeska) EPA-HQ-OAR-2008-0708-1064 Grif Bond, Chair, Environmental Health & Safety Communications Panel (EHSCP) EPA-HQ-OAR-2008-0708-1065 Thomas Mountfort, Environmental Compliance Supervisor Denver Water, Denver, Colorado
EPA-HQ-OAR-2008-0708-1066 8 Supports the comments of EPA-HQ-OAR-2008-0708-1064 Kathleen Tobin, Manager Corporate Safety and Environmental Compliance, Verizon

EPA-HQ-OAR-2008-0708-1067 Amy M. Trojecki, Director, Environmental and Fuels Policy and William J. Donohue, Associate General Counsel, Environmental, Health and Safety Exelon Corporation

EPA-HQ-OAR-2008-0708-1069 Supports comments of EPA-HQ-OAR-2008-0708-1089 EPA-HQ-OAR-2008-0708-1106 Pamela A. Lacey, Senior Managing Counsel, Environment American Gas Association (AGA)

EPA-HQ-OAR-2008-0708-1070 9 EPA-HQ-OAR-2008-0708-1116 Supports comments of EPA-HQ-OAR-2008-0708-1089 Pamela F. Faggert, Vice President and Chief Environmental Officer Dominion

EPA-HQ-OAR-2008-0708-1071 EPA-HQ-OAR-2008-0708-1100 Donald P. Evans, Chairman, Air Quality Subcommittee Offshore Operations Committee

EPA-HQ-OAR-2008-0708-1072 Zak Covar, Executive Director Texas Commission on Environmental Quality (TCEQ)

EPA-HQ-OAR-2008-0708-1073 Can Boyce, Vice President, Environmental and Energy Policy Duke Energy
EPA-HQ-OAR-2008-0708-1074 Bret Bauer, MPA, City Manager City of Holton

8 Verizon incorporated by reference the comments of the EHSCP in their comment letter and are represented in this document as commenter 1064. 9 Dominion submitted two letters, one with additional co mments. Dominion is represented in this document a commenter 1070.11 Document ID 1,2,3,4 Commenter Affiliation Supports the comments of EPA-HQ-OAR-2008-0708-1082 EPA-HQ-OAR-2008-0708-1075 Thure Cannon, Executive Director Texas Pipeline Association (TPA) EPA-HQ-OAR-2008-0708-1076 Joseph Otis Minott, Esq, Executive Director, Clean Air Council and Joseph Osborne, Esq, Legal Director Group Against Smog and Pollution

EPA-HQ-OAR-2008-0708-1077 Jam es H. Cawley, Commissioner Pennsylvania Public Utility Commission (PAPUC) EPA-HQ-OAR-2008-0708-1078 Steve Hensley, Senior Director Regulatory Affairs USA Rice Federation
EPA-HQ-OAR-2008-0708-1079 Larry Dokkestul, President & CEO Pierce Pepin Cooperative Services EPA-HQ-OAR-2008-0708-1080 Betsy Natz, Executive Director Institute of Clean Air Companies (ICAC)
EPA-HQ-OAR-2008-0708-1082 Alex Hofmann, Sr. Energy & Environmental Services Engineer American Public Power Association (APPA) EPA-HQ-OAR-2008-0708-1083 Susan Schumann, Chair, FCG Environmental Committee Florida Electric Power Coordinating Group, Inc. (FCG-EC) EPA-HQ-OAR-2008-0708-1084 Supports the comments of EPA-HQ-OAR-2008-0708-1069 EPA-HQ-OAR-2008-0708-1089 Michael P. Lebeis, Senior Air Quality Engineer, Environmental Management and Resources DTE Energy

EPA-HQ-OAR-2008-0708-1085 Darrell Martin, Maintenance Supervisor Dutchland Incorporated
EPA-HQ-OAR-2008-0708-1088 Gary D. Milbury, Jr., Air Permit Programs manager, Air Resources Division New Hampshire (NH) Department of Environmental Services (NHDES)
EPA-HQ-OAR-2008-0708-1089 Lisa Beal, Vice President, Environment and Construction Policy Interstate Natural Gas Association of America (INGAA) EPA-HQ-OAR-2008-0708-1090 EPA-HQ-OAR-2008-0708-1137 (duplicate) Christina Simeone Citizens for Pennsylvania’s Future (PennFuture) et al.
EPA-HQ-OAR-2008-0708-1091 Br enner Munger, Manager, Environmental Department Hawaiian Electric Company, Inc.
EPA-HQ-OAR-2008-0708-1092 Kimberly A. Walker, CHMM, Manager, Environmental EQT Corporation
EPA-HQ-OAR-2008-0708-1093 Anna Kapetanakos AT&T Inc. EPA-HQ-OAR-2008-0708-1094 Laura Chappelle PJM Power Providers Group (P3) EPA-HQ-OAR-2008-0708-1095 Jeff Applekamp, Director, Government Affairs Gas Processors Association (GPA)
EPA-HQ-OAR-2008-0708-1096 Supports the comments of EPA-HQ-OAR-2008-0708-1069 Marcelle Fiedler, Senior Environmental Scientist New Mexico Gas Company (NMGC)

EPA-HQ-OAR-2008-0708-1097 Brian Rude, Vice President, External and Member Relations Dairyland Power Cooperative
EPA-HQ-OAR-2008-0708-1098 EPA-HQ-OAR-2008-0708-1120 (duplicate) Erin Badough, Environmental Committee Chairman Gas Compressor Association (GCA)

EPA-HQ-OAR-2008-0708-1099 Verne Shortell, Vice President, NRG Energy, Inc.12 Document ID 1,2,3,4 Commenter Affiliation Environmental and Cortney Madea, Senior Counsel, Regulatory EPA-HQ-OAR-2008-0708-1101 Shanna Cl eveland, Staff Attorney and Rachel Clark, Legal Intern Conservation Law Foundation (CLF)
EPA-HQ-OAR-2008-0708-1102 A li Mirzakhalili, Director Delaware Department of Natural Resources & Environmental Control EPA-HQ-OAR-2008-0708-1103 John C. Hendricks, Director-Air Quality Services, American Electric Power (AEP)
EPA-HQ-OAR-2008-0708-1104 Julia M. Blankenship, Manager, Energy Policy and Sustainability American Municipal Power, Inc. (AMP)
EPA-HQ-OAR-2008-0708-1105 Matthew Todd American Petroleum Institute (API) EPA-HQ-OAR-2008-0708-1106 Steve Donatiello, Senior Environmental Engineer Laclede Gas Company
EPA-HQ-OAR-2008-0708-1107 Supports the comments of EPA-HQ-OAR-2008-0708-0994 Raymond L. Evans, Vice President, Environmental, FirstEnergy

EPA-HQ-OAR-2008-0708-1110 Kenneth F. Alexander, President, Engineering Services Old Dominion Electric Cooperative (ODEC) EPA-HQ-OAR-2008-0708-1111 Gerald Loney, Energy Management Specialist North Itasca Electric Cooperative Inc.
EPA-HQ-OAR-2008-0708-1112 Gregory M. Adams, Assistant Departmental Engineer, Air Quality Engineering, Technical Services Department County Sanitation Districts of Los Angeles

EPA-HQ-OAR-2008-0708-1113 Supports the comments of EPA-HQ-OAR-2008-0708-1104 Dale A. Mathys, Village Administrator Village of Edgerton

EPA-HQ-OAR-2008-0708-1114 Greg McFarland Jackson Electric Cooperative EPA-HQ-OAR-2008-0708-1117 Pat Stanton, Senior Vice President of Policy and Advocacy Conservation Services Group (CSG)
EPA-HQ-OAR-2008-0708-1118 Ra ndy Allison, Vice President, Production Golden Spread Electric Cooperative, Inc.
EPA-HQ-OAR-2008-0708-1119 Wayne E. Penrod, Executive Manager, Environmental Policy Sunflower Electric Power Corporation and Mid-Kansas Electric Company, LLC EPA-HQ-OAR-2008-0708-1121 Julian M. Davis, Regulatory Compliance Specialist Generac Power Systems, Inc.
EPA-HQ-OAR-2008-0708-1122 Jackson D. Morris, Director, Strategic Engagement Pace Energy and Climate Center, Pace Law School et al EPA-HQ-OAR-2008-0708-1123 David G. Tewsbury, King & Spalding LLP at el. on Behalf of Nancy Bagot, Vice President of Regulatory Affairs, Electric Power Supply Association (EPSA) et al. EPA-HQ-OAR-2008-0708-1124 Suzette Krausen, Executive Assistant, Monitoring Analytics, LLC EPA-HQ-OAR-2008-0708-1125 Daniel C. Esty, Commissioner Connecticut Department of Energy and Environmental Protection (DEEP) EPA-HQ-OAR-2008-0708-1126 Commentsubmitted by Robert C. Jagusch, Director of Engineering and Policy Analysis Minnesota Municipal Utilities Association (MMUA)
EPA-HQ-OAR-2008-0708-1127 Comme nt submitted by James R. Hathaway, General Manager/Chief Dunn Energy Cooperative13 Document ID 1,2,3,4 Commenter Affiliation Executive Officer (CEO) EPA-HQ-OAR-2008-0708-1128 Co mment submitted by Mike Hutcheson, Senior Environmental Engineer Ameren Corporation

EPA-HQ-OAR-2008-0708-1129 Commentsubmitted by Chad Davis, Utility Director Trenton Municipal Utilities (TMU), City of Trenton, Missouri EPA-HQ-OAR-2008-0708-1130 Co mment submitted by Sandra Moller, Deputy Director, Rural Energy Alaska Energy Authority (AEA)

EPA-HQ-OAR-2008-0708-1131 Commentsubmitted by Charles M. Figueroa, Senior Project Manager, Almega Environmental
EPA-HQ-OAR-2008-0708-1132 Comme nt submitted by Patrick Grenter, Esq., Executive Director Center for Coalfield Justice et al.
EPA-HQ-OAR-2008-0708-1133 Co mment submitted by Mike Wasson, Director Fleet Services Exterran
EPA-HQ-OAR-2008-0708-1134 Comme nt submitted by Patrick Blanchard, Director, Environmental Services Calpine Corporation

EPA-HQ-OAR-2008-0708-1135 Keith Berggren, IPEC Generation Supervisor Inside Passage Electric Cooperative (IPEC)
EPA-HQ-OAR-2008-0708-1136 Co mment submitted by Phillip Schlagel, Director, EHS Services Anadarko Petroleum Corporation
EPA-HQ-OAR-2008-0708-1138 Late comment submitted by Greg Ransom, Facility Manager Harris Hardwoods, Inc.
EPA-HQ-OAR-2008-0708-1139 Co mment submitted by Alice Edwards, Director, Division of Air Quality Alaska Department of Fnvironmental Conservation (ADEC)
EPA-HQ-OAR-2008-0708-1140 Comme nt submitted by Janice E. Nolen, Assistant Vice President, National Policy and Advocacy and Lyndsay F. Moseley, Director of Advocacy, Healthy Air Campaign, American Lung Association (ALA) National Policy and Advocacy and American Lung Association (ALA)

EPA-HQ-OAR-2008-0708-1141 Commentsubmitted by Scott Newlun, General Manager, Yakutat Power EPA-HQ-OAR-2008-0708-1142 Richard H. Counihan, Vice President Government Affairs EnerNOC Inc. on behalf of Comverge, Inc. et al EPA-HQ-OAR-2008-0708-1143 Megan H. Berge Ba ker Botts LLP on behalf of Class of '85 Regulatory Response Group EPA-HQ-OAR-2008-0708-1144 Jeff Zimmerman, for Damascus Citizens for Sustainability, Inc. and NYH2O, Inc. EPA-HQ-OAR-2008-0708-1145 Supports the comments of EPA-HQ-OAR-2008-0708-1105 Kate Williams, Regulatory and Legal Affairs Manager Alaska Oil and Gas Association (AOGA)

EPA-HQ-OAR-2008-0708-1146 Larry S. LLoyd, P.E., Chief Operating Officer Beaver Water District (BWD), Lowell, Arkansas EPA-HQ-OAR-2008-0708-1148 Cindy Holman, General Manager Oklahoma Municipal Power Authority (OMPA)14 Document ID 1,2,3,4 Commenter Affiliation EPA-HQ-OAR-2008-0708-1149 Cathy S. Woolums, Sr. Vice President, Environmental and Chief Environmental Counsel Mid-American Energy Holdings Company (MEHC)
EPA-HQ-OAR-2008-0708-1150 Kim M. Huxford, Operations Division Manager Steele-Waseca Cooperative Electric (SWCE) EPA-HQ-OAR-2008-0708-1151 Supports the comments of EPA-HQ-OAR-2008-0708-1082 EPA-HQ-OAR-2008-0708-0968 Comment submitted by Frederick P. Remelius, Director of Operations Upper Merion Area School Distric

EPA-HQ-OAR-2008-0708-1152 Jose ph Gress, Packaging Products, Americas, Principal Engineer, Demandside Energy Ball Corporation

EPA-HQ-OAR-2008-0708-1169 Rob Nikula, VP of Power Supply Wright Hennnepin Generation EPA-HQ-OAR-2008-0708-1193 Charles E. Morgan, P.E., Inactive, Executive Director Citizens for Environmental Clean Up
EPA-HQ-OAR-2008-0708-1196 Timoth y J. Herndon, P.E., Utility Engineer City of Bartlett
EPA-HQ-OAR-2008-0708-1315 Jim Li ncoln, Facilities Vice President Grand Casino Hinckley EPA-HQ-OAR-2008-0708-1317 William F. Banke, General Manager St earns Electric Association EPA-HQ-OAR-2008-0708-1318 Brian Finch, Manager Customer Service Crow Wing Power
EPA-HQ-OAR-2008-0708-1319 Richard G. Burud, General Manager Nobles Cooperative Electric EPA-HQ-OAR-2008-0708-1323 Supports the comments of EPA-HQ-OAR-2008-0708-1069 EPA-HQ-OAR-2008-0708-1089 Greg F. Myers, Director, Environmental Services Consumers Energy

EPA-HQ-OAR-2008-0708-1326 Joanne Wojciechowski, CEO Rum River Eggs, Inc. EPA-HQ-OAR-2008-0708-1378 Rick McClanahan, City Engineer City of Bartlett, Texas EPA-HQ-OAR-2008-0708-1381 Will Conjur a, Purchasing Manager Revere Smelting & Refining Corporation EPA-HQ-OAR-2008-0708-1398 Camille George, R. Ted Harhai, and John R. Hornaman Pennsylvania House of Representatives
EPA-HQ-OAR-2008-0708-1444 Lisa Kurkowski, U.S. Senator, Alaska United States Senate EPA-HQ-OAR-2008-0708-1445 Robert Po rter, Director Electric and Water Utilities City of Winfield
EPA-HQ-OAR-2008-0708-1446 Herbert J. Mays, Executiv e Director Downingtown Area Regional Authority EPA-HQ-OAR-2008-0708-1447 Mark Glaess, Mana ger Minnesota Rural Electric Association EPA-HQ-OAR-2008-0708-1448 Scott Nally, Director Ohio Environmental Protection Agency EPA-HQ-OAR-2008-0708-0940 10 EPA-HQ-OAR-2008-0708-0973 EPA-HQ-OAR-2008-0708-1449 Zach Muepo, Senior Environmental Specialist Southern California Gas Company (SCG)

EPA-HQ-OAR-2008-0708-1457 Mayor Heather McTeer, Chair, LGAC and Supervisor Salud Carbajal, Chair, Air, Climate & Energy Workgroup Local Government Advisory Committee (LGAC)

10 Southern California Gas submitted several comment letters correcting previous letters. Southern California Gas is represented in this summary as commenter 1449, wh ich is the last and corrected comment submittal.15 Document ID 1,2,3,4 Commenter Affiliation EPA-HQ-OAR-2008-0708-1458 Late comment from Kenneth L. Vogt, Jr., Wastewater Treatment Superintendent Cape Fear Public Utility Authority (CFPUA)

EPA-HQ-OAR-2008-0708-1461 Susan Wilson, Senior Regulatory Specialist BHP Billiton Petroleum (Americas), Inc.

EPA-HQ-OAR-2008-0708-1462 Pamela F. Faggert, Vice President and CEO Dominion

EPA-HQ-OAR-2008-0708-1463 Ali Mirzakhalili, PE., Director State of Delaware, Department of Natural Resources and Environmental Control (DNREC), Divison of Air Quality (DAQ) EPA-HQ-OAR-2008-0708-1464 William W. (Bill) Grygar II, Director, EHS GOM Anadarko Petroleum Corporation

EPA-HQ-OAR-2008-0708-1465 Donald P. Evans, Chairman, Air Quality Subcommittee Offshore Operators Committee (OOC)
EPA-HQ-OAR-2008-0708-1466 EPA-HQ-OAR-2008-0708-1477 (Duplicate) Daniel E. Donohoue, Chief, Emission Assessment Branch, Stationary Source Division California Air Resources Board (CA ARB)

EPA-HQ-OAR-2008-0708-1467 John F. Pertgen, Director, Offshore Technical and Regulatory Affairs International Association of Drilling Contractors (IADC) EPA-HQ-OAR-2008-0708-1468 David C. Gill, Jr., Sr. Consultant, Regulatory Issues ConocoPhillips Company

EPA-HQ-OAR-2008-0708-1469 Joseph Kubsh, Executive Director Manufacturers of Emission Controls Association (MECA) EPA-HQ-OAR-2008-0708-1470 J. Wick Havens, Interim Executive Director Ozone Transport Commission (OTC)16 

### Table of Contents

1.0 Emergency DR Provisions of 100 hrs/yr ................................................................................ 18
1.1 Supportive of Proposed Emergency DR Provisions ....................................................................... 18
1.2 Opposed to Proposed Emer gency DR Provisions ........................................................................... 38
1.3 Recommendations on Specific Regulatory Language .................................................................... 90
1.4 Allow Local Balancing Authority to Determine Emergencies ....................................................... 97

1.5 Clarifications/Other ...................................................................................................... ................... 99 2.0 Peak Shaving Allowance of 50 hrs/yr ................................................................................... 105
2.1 General Support or Opposition to Pr oposed Peak Shaving Allowance ........................................ 105

2.2 Revisions Needed to Peak Sh aving Operational Period ................................................................ 111

2.3 Relation to MATS Rule...................................................................................................... ........... 114 2.4 April 2017 Expiration Date ................................................................................................ ........... 115 2.5 Requested Clarifications .................................................................................................. ............. 121 3.0 Impacts of Standards ...................................................................................................... ....... 123 3.1 Air Quality Impacts ....................................................................................................... ................ 123 3.2 Economic Impacts .......................................................................................................... ............... 141 3.3 Health and Overall Environmental Impacts .................................................................................. 156 3.4 Environmental Justice Impacts ............................................................................................. ......... 168

3.5 Executive Order 13211 ..................................................................................................... ............. 172 4.0 Existing Non-Emergency Stationary SI RI CE >500 HP Located at Area Sources .............. 174
4.1 Sparsely Populated/Rem ote Areas (Class 1) ................................................................................. 174 4.2 Populated Areas (Class 2-4) ............................................................................................... ........... 185

4.3 Definition of Remote ...................................................................................................... ............... 188 4.4 Management Practices ...................................................................................................... ............. 19417 4.5 Performance Testing/Catalyst Check ........................................................................................ .... 196

4.6 Test Methods .............................................................................................................. ................... 203 5.0 THC/CO Compliance Demonstration Option ....................................................................... 206

6.0 Provisions for Sources in Remote Areas .............................................................................. 212

6.1 Remote Areas of Alaska .................................................................................................... ............ 212 6.2 Expand Remote Category to Include CI Engines .......................................................................... 220

6.3 Offshore Sources .......................................................................................................... ................. 223 7.0 Stationary Agricultural RICE in San Joaquin Valley (Tier 1-3 Relief) ................................ 240
8.0 Compliance Date ........................................................................................................... ........ 242

9.0 Technical Corrections ..................................................................................................... ...... 250

10.0 Miscellaneous Comments ................................................................................................... 256 10.1 Uncertainty around Engines used for Emergency DR ................................................................ 256
10.2 Life Time Non-Emergency Provisions ....................................................................................... 257 10.3 Recordkeeping and Reporting .............................................................................................. ....... 261 10.4 Consistency with the NSPS ................................................................................................ ......... 267

10.5 Use of ULSD Fuel or Alternative Fuels .................................................................................... .. 268 10.6 Stationary CI Engines >30 l/cyl .......................................................................................... ........ 272

10.7 Other .................................................................................................................... ........................ 27218 

### 1.0 Emergency DR Provisions of 100 hrs/yr

1.1 Supportive of Proposed Emergency DR Provisions

1.1.1 Comment : A number of commenters (872, 873, 876, 879, 880, 881, 883, 884, 885, 887, 888, 889, 891, 892, 893, 895, 896, 897, 898, 899, 900, 902, 903, 904, 905, 906, 907, 908, 909, 910, 911, 912, 913, 914, 915, 918, 919, 920, 921, 923, 925, 926, 927, 928, 930, 931, 932, 934, 935, 937, 941, 942, 945, 949, 951, 952, 956, 957, 958, 959, 968, 969, 970, 972, 975, 976, 977, 978, 979, 980, 981, 984, 985, 986, 988, 989, 995, 996, 997, 999, 1000, 1001, 1002, 1003, 1007, 1008, 1014, 1015, 1016, 1017, 1018, 1019, 1021, 1022, 1023, 1024, 1027, 1028, 1029, 1032, 1034, 1035, 1036, 1038, 1039, 1040, 1041, 1043, 1044, 1049, 1051, 1052, 1054, 1055, 1056, 1059, 1061, 1064, 1072, 1073, 1074, 1078, 1079, 1082, 1085, 1088, 1091, 1093, 1097, 1104, 1110, 1111, 1113, 1117, 1119, 1126, 1128, 1138, 1142, 1143, 1315, 1326, 1378, 1398, 1445, 1446, 1448, 1457, and 1458) expressed support for the changes the EPA has proposed to the NESHAP and NSPS concerning emergency engine s participating in DR programs for up to 100 hrs/yr. Numerous commenters stated that EPA’s assessment that emergency engine operations under emergency DR will have no adverse health or environmental impacts and that the proposed allowance is necessary.

Emergency Use Not Limited Before This Rule One commenter (1142) stated that no national re strictions limiting the hourly use of emergency engines in emergency DR currently exist. The co mmenter (1142) argued that implementation of new hourly restrictions contained in the proposed rule represents a reduction in permissible hours compared to the status quo. Another commenter (1043) said that the EPA has al ways allowed up to 100 hrs/yr to be used for non-emergency purposes, which includes testing and maintenance, and that the EPA is not changing the limit, but adding flexibility to how the hours can be used. One comment er (909) added that the EPA has not changed the current 100-hour limit for non-lights out us e for engines; it has simply applied it in the
context for this use.

Maintain Reliability of the Electric Grid Several commenters (872, 873, 879, 880, 881, 883, 884, 885, 889, 891, 893, 895, 896, 898, 903, 904, 905, 910, and 913) stated that these engines play a vital role in k eeping the electric grid stable. Several of these commenters (872, 873, 879, 880, 881, and 883) recommended that emergency engines19 should be allowed to participate in emergency DR programs and maintain their status as emergency engines. The commenters (872, 873, 879, 880, and 896) explai ned that if the grid fails, every generator in the area will operate for many hours or days (whether or not the engi ne is properly permitted) until the electric grid is rest ored. Several commenters (873, 876, 881, 885, 888, 891, 893, 895, 896, 897, 899, 900, 903, 905, 906, 907, 908, 910, 911, 912, and 913) stated that DR is an essential part of their operations. Several of these commenters said that if they had to add controls and other upgrades and have to monitor and test, they woul d leave the emergency DR market. One commenter (1142) believes that the portion of the proposed rule that pertains to DR is a reasonable compromise based on the EPA’s diligent effort. The commenter (1142) fully supports the proposed rule regarding DR and recommends that the EPA issue a final rule as proposed. The commenter (1142) stated that the proposed rule pr omotes reliability and asserted that independent system operators (ISO), regional transmission oper ators (RTO), and utilities responsible for grid reliability support the proposed rule and have demonstr ated that the previously approved 15 hrs/yr limit
is not sufficient. The commenter (1142) further stated that while opponents of the increase in hours for emergency engines have argued that even with an allowance of 15 hrs/yr, emergency generators could still participate in emergency DR programs by aggregating their out put, they have cited practical problems in doing so. The commenter ( 1142) asserted that grid operators are unified in the view that emergency DR at levels significantly higher than 15 hrs/yr is necessary to support reliability, and the EPA should reject the claims that 15 hours is sufficient made by others who lack responsibility for grid reliability.

DR Rarely Used in Past and Not Expected to Increase in Future One commenter (1142) asserted that emergency DR has been rarely dispatched and references a comment letter submitted by PJM to the EPA in February 2011 (EPA-HQ-OAR-2008-0708-0813) (see Attachment 1). The commenter (1142) presented examples such as Te xas, with only two emergency DR events under the Emergency Interruptible Load Service (EILS) Progra m, now called 10-minute Emergency Response Service (“10 minute ERS”), si nce its inception in 2008; and New England, wherein the use of emergency engines in emer gency DR has only been called three times. The commenter (1142) added that as diesel-generator-based emergency DR has been rarely used in the past when there were no Federal limitations on hourly usage, there is no reason to assume that placing new restrictions on annual operations will lead to increased development or dispatch of emergency DR. The commenter (1142) also stated that implementing an upper limit of 100 hr s/yr as the maximum number of20 hours an emergency engine can run in an emergenc y DR program will enable them to continue to participate in important reliability programs and will not lead to an unrestrained increase in the number of hours these programs are dispat ched. The commenter (1142) asserted that only the entity responsible for maintaining system reliability can make that decision and that entity must go through a strict sequence of actions prior to declaring each emergenc y level and must report such actions to the North American Reliability Corporati on (NERC). The commenter (1142) be lieves that the notion that any balancing authority is going to a llow emergencies to become more frequent, in effect, abdicating its responsibility to maintain reliabi lity, is entirely inconsistent w ith their essential mandate. The commenter (1142) stated that the proposed rule w ould assure that system operators will have more resources to help correct the sy stem during emergencies thereby be tter protecting human health, the environment and the economy. Commenter 968 said that the marketplace will l imit the operation of the emergency units. The commenter (968) provided an example where their ci ties purchase power at prices under $65 dollars per megawatt (MW) hour (MW-hr) in a lmost all cases, but it costs over $250 per MW-hr, or more, to operate many of these units based on the cost of diesel fuel. The commenter (968) said that it is only during limited extreme periods of temperature a nd when conventional generating resources become
unavailable that these units would conceivably be economic to run in the Midwest. Other commenters (1017, 1045, 1051, 1074, and 1129) agreed that there is little or no financial incentive to operate other than when absolutely necessary to maintain the local distribution grid and described the higher costs of operating such units. In contrast, one commenter (1103) who supported flexibility in transitioning to a cleaner emission environment, believes that the EPA’s statement that “stati onary emergency engines typically operate well below 50 hrs/yr and more commonl y about 1 to 2 hours per month” significantly underestimates the likelihood of these operations in the future. The commenter (1103) acknowledged that 100 hours of operation may seem adequate to addr ess the future increase in usage, but believes that with the changing dynamics of oil, gas, and coal prices, and the shrinking reserve margins in the reliability regions across the country, these stationary units will see a significant increase in operation in
the future.

DR and Market Structure One commenter (1142) asserted that many argum ents from opponents of the proposed rule are
about market structure issues in P JM, and are thus in the jurisdicti on of PJM and FERC and believes the21 EPA should disregard them. The comme nter (1142) stated that various parties will make claims that by implementing this proposed rule, the EPA will distort both energy a nd capacity markets and thereby stifle the construction of new, cl eaner generation. However, accordi ng to the commenter (1142), most of these claims stem from policy disagreements with th e structure of those market s, policy determinations that are within the purview of the organized wholesale markets (i.e., th e ISO/RTO that c over a portion of the country) and the FERC which regulates the ISO/RTO. The commenter (1142) stated that the EPA should let the ISO/RTO and FERC make the
determinations as to what is need ed both for reliability and for economic efficiency in their markets and not let parties re-litigate those i ssues here. In addition, the proposed rule would affect emergency engines throughout the country, not just in the orga nized wholesale markets, so the commenter (1142) believes the EPA needs to consider the bigger picture, not just the views of certain market participants in the organized markets. The commenter (1142) added while emergency DR has contributed to lower prices in capacity markets, this is a benefit to consumers and shoul d not prevent the EPA from adopting the proposed rule. Claims that the proposed rule w ill distort the nation’s energy markets and allow behind-the-meter (BTM) generators to squeeze traditional generators out of the market, and result in suppressed prices, indicates, according to the commenter (1142), that gene rators and their trade associations are primarily interested in higher capacity prices at the expens e of consumers. The comme nter (1142) added that whether capacity prices resulting from emergency engines participating in capacity auctions are “suppressed” or simply “reasonabl e” is a matter of perspective. The commenter (1142) asserted that the PJM Ca pacity Market model and similar mechanisms were designed to encourage reliability from a numbe r of sources, including em ergency DR. Therefore, the commenter (1142) stated, it cannot be conclude d that DR participation, even through use of emergency engines, somehow “distorts the market” merely by participating. The FERC, according to the commenter (1142), has repeatedly supported greater par ticipation of DR in capacity markets in different proceedings precisely because of the benefit to consumers. Going forward in PJM, “Limited DR” will no lo nger compete with generation in capacity markets because, according to the commenter (1142), PJM has created three capacity products: Limited DR will only be able to bid into the Limited Capacity product while generation can bid into the Annual Capacity product. Therefore, the commenter (1142) stated, going forward, Limi ted DR will not compete against generation in the PJM capacity markets and will not be reducing the price for generation capacity. Furthermore, the comment er (1142) stated that PSEG (co mment 961 in this document) has22 noted that the saturation limit fo r Limited DR has already been hit, further undermining opponents’ claims that the proposed ru le will cause unconstrained gr owth of this resource. The commenter (1142) also stated that it is im portant to remember that the proposed rule represents a reduction in allowed hours of operati on in emergency operation from the status quo of unlimited hours to 100 hrs/yr or fa r less in most circumstances and, th erefore, by itself will not lead to an increase of DR in capacity markets. One commenter (1001) stated that it considers RI CE that participate in its DR programs largely as BTM generation. The commenter (1001) asserted that a BTM generator differs from a generator directly interconnected to the bulk el ectric system in that it does not directly receive dispatch signals. The commenter (1001) stated that although it does not ha ve the same level of op erational visibility or control of these BTM units, as with generation connected directly to the bulk power system, they can be a component of an overall DR capacity portfolio offered into the capacity market. The commenter (1001) stated that during emergency conditions, the curtailment service provider receives the dispatch instruction and determines what resources it deploys , or actions it takes to meet the DR performance obligation. A curtailment service provider, the comment er (1001) stated, retains the ability to aggregate
a number of such RICE units to m eet the requisite run hour limits, re gardless of the number of hours defined by the RICE rule under consideration, and their DR performance obligation. As a result, according to the commenter (1001), the environmenta l limitations on individua l RICE units, although an important input into how DR resources are deployed, ar e not necessarily disposit ive of the ability of DR resources to participate in markets or to maintain bulk power system reliability. One commenter (1082) refuted assertions that DR associated with BTM generation is less legitimate than other means of ach ieving DR. The commenter (1082) st ated this bifurcation between BTM and “legitimate efforts” stands in contrast to recent reports showing that DR is not always performing when called upon; for example, PJM reporte d that in two instances in which DR was called in May 2011, performance “was lower than expected (80 percent) and much lower than the committed amount of capacity (40 percent).” The commenter (1082) believes such uncertainty can compromise the key goal of DR, which is to ensure the reliability of power supply. The comme nter (1082) stated that ensuring reliability is not dependent upon whether th e DR is backed up by BTM generation or based on shifts in consumer demand. The commenter (1082) concluded that given the uncertainty of DR performance, the DR provided RICE units may provide a much needed and reliable source of capacity. One commenter (988) was concerned about the St ate of Delaware’s opposition to the use of emergency engines in emergency DR programs. (Commenter 988 represents a 2,000 member trade23 association for the chicken industry in Delaware, Maryland, and Virginia). According to commenter 988, the State of Delaware (Commenter 1102 in this doc ument) often confuses emergency DR with peak shaving or non-emergency DR programs. The commenter (988) expressed that it felt it was unfortunate
that the State of Delaware does not understand the im portance of using a small number of engines in order to prevent a blackout.

Relief for Small Utilities and Consumer Price Impacts One commenter (1082) believes th e EPA’s proposed changes to the NESHAP RICE rule are appropriate and necessary to provide the needed relief for small municipa lly-owned utilities. The commenter (1082) appreciates that the EPA has proposed changes and ad ded flexibility to protect the emergency operation of engines at many small communities across the United States while doing negligible harm to the environment. The comment er (1082) appreciated th e EPA for understanding and addressing the small business issues raised by the RICE rule and for proposing changes that would modestly alleviate the high cost of compliance asso ciated with this rule. The commenter (1082) added that the EPA’s proposed 100-hour language with a broa der definition of emergency is needed to lower the cost risk of RICE-related decision making as the ability of a utility to respond to condition- and situation-based emergencies resulti ng from forces or circumstances out side of a utility’s control is
essential. The commenter (1082) further agreed with the EPA’s proposed language adding needed flexibility to the operatio n of emergency RICE. The commenter ( 1082) stated that th e EPA’s proposed language on emergency DR is an appropriate way for the EPA to provide badly needed regulatory flexibility and relief for small utilities. The comment er (1082) explained that because a RICE unit might not run for 1, 2, or even 4 years, it is difficult fo r a small town to decide whether it should spend a significant portion of annual utility revenues to replace or retrofit its RICE unit. Utilities argued that if only 15 hr s/yr were permitted, engines woul d have to be retrofitted at a very high cost, especially for local electric utilities that do not have extensive budgets. For example, one commenter (978) said that if the EPA does not finali ze the 100 hrs/yr allowance, it would be forced to retrofit its engines at a cost of $615,000 for six engine s, which is 11 percent of the utility’s budget. Some commenters argued that without the suggested change s, many facilities will not be able to use their engines for emergency DR because the requirements for non-emergenc y engines under the NESHAP are
too burdensome. A number of commenters stated that f acilities may not afford to install add-on controls like oxidation catalyst and other engine upgrades, pl us stack testing and reporting. Revenue received24 from DR participating is often used to maintain the engines they have and to stay in operation and there
are often not additional funds to make the necessa ry changes to meet the non-emergency requirements
of the NESHAP. One commenter (995) is strongly against regulating generators that operate infrequently. In the commenter’s (995) case the generato rs operate only 50 to 60 hrs/yr wh en grid capacity is an issue and upgrading the engines would cost around $600,000. If th e rulemaking proceeds, the commenter (995) urged the EPA to at least provide a 100-hour limit. Some commenters (1045, 1074, and 1129) described the impact that failure to finalize this change would have on their utility budget duri ng difficult economic times. One commenter (1074) added that the EPA should make decisions to keep the system stable giving the extensive changes coming as baseload coal-fired generation retrofits or converts from coal to gas. Another commenter (1036) said that small communities rely on the cr edit or payment they reserve to provide reserve capacity enables them to afford the engines that k eep the lights on and emergency services operating in a storm. The commenter (1036) added that the cost of retrofitting engines with cat alytic converters is high, and many engines cannot be retrofitted, because of th eir age, design, or inadequate physical space for the conversion equipment. The commenter (1136) provide d an example of the cost that the RICE rule would impose on local residents (pages 5–6). Another commenter (937) noted that retrofitting engines to meet the non-emergency requirement s of the RICE NESHAP would involve costly controls and other engine upgrades and stack testing wher e facilities such as theirs would need to take the engines out of the emergency DR program, which would leave the electric grid dange rously vulnerable.
Commenter 1051 added that these amendments constitu te an important step toward ensuring that reliability needs are met for small, rural municipa lities in areas of the country like Kansas where transmission limitations, small population bases, and economic cons traints make large new power plants and transmission expansion infeasible. The commenter (1051) said that it must sometimes operate RICE units when, for example, severe weather causes a voltage event over a constrained transmission path, which is exactly what these RICE units are well- designed to do; backup generation that serves the community’s needs on rare occasions when emergencies strike and the local power grid threatens to shut down. Commenter 1445 made similar comments regard ing electric ut ility operating conditions in
Kansas. Commenter 968 noted that the proposal makes provisions for operati on of emergency-only engines in limited circumstances to avoid collapse of local distribution sy stems, and this is an essential step for local municipal power companies to sustain service at a level that does not damage expensive25 electric motors, industrial switch gear, home app liances, and sensitive consumer electronics. The commenter (968) added that the revision wisely authori zes cities to operate for a short period of time in a pro-active mode during unstable elec tric power conditions rather than allow conditions to escalate to a point where the engines will have to run a much longe r time and at higher loads in order to restart and re-stabilize the regional or local distribution grid. In the long run, this can reduce emissions, in the commenter’s (968) opinion. One commenter (1017) noted that at the July 10, 2012, public hearing in Washington, D.C., a significant portion of the oral testimony that wa s provided by various stakeholders focused on the utilization of DR engine s in the PJM marketplace. 11 As the commenter (1017) noted at that hearing, for public power systems in Kansas, the proposed RICE amendments are not about quarterly profits or integrated markets. Instead, the commenter (1017) sai d, the modest relief provided is about being able to sustain reliability in small, re mote Midwestern communities. The commenter’s (1017) members are not “corporate polluters,” but instead small, financially challenged communities striving to keep the lights on and electricity bills as low as possible.

Avoid Adverse Impacts of Power Outages Several local utilities, including commenters 981 and 984, expressed support for the proposed 100 hrs/yr because it is needed to prevent a bl ack out or rolling brownouts from happening. One commenter (1143) said that the initial allowance of 15 hrs/yr is insufficient and that 100 hrs/yr will allow emergency engines to participate in DR progr ams helping to prevent harmful blackouts. In the commenter’s (1143) opinion, the proposed increased allowance is particularly critical for isolated areas not covered by regional programs and th at have less generation resources to call upon in the event of an emergency. Also, the commenter (1143) said that the allowance will improve reliability, avoiding reliance on larger of peaking units, which according to the commenter (1143) w ould often run at idle, resulting in increased net emissions as compared to infrequent emergency use of stationary RICE. During electric grid failure, it can take days or weeks to fully restore the system, according to commenter (1043) who added that during blackouts, every backup generator, whether it is properly permitted or not will run around the clock until the lights are restored. Commenter 1043 said that during blackouts, public health and safety are harmed greatly. As an example, the commenter (1043) referred to the blackout of 2003 during which time millions of ga llons of untreated sewerage poured into New York

11 Transcript of Public Hearing. July 10, 2012. EPA-HQ-OAR-2008-0708-0944.26 City’s rivers. Two commenters (1028 and 1043) said that blackouts rarely occur and the last (and only) time emergency engines were used in the New England area under ISO Ne w England (ISO-NE) was on August 2, 2006, for a total of 3.75 hours. However, during that instance, if it had not been for emergency DR, there would have been a widespread blac kout, according to the commenter (1043), with the possibility of the entire electrical grid going down. Commenter 1028 said that could have been
detrimental to both the environmen t and public health and safety. Commenter 1043 stated that the EPA is doing the right thing and indicated that the Agency understands the importance of protecting the electrical grid and that grid failure would lead to more harm to the environment than by using a group of ge nerators for a short amount of time to prevent blackouts and brownouts. The commenter (1043) argued that it is infinitely better to allow a subset of generators to be used for a brief period of time in order to prevent a blackout as opposed to waiting for
the blackout to occur. The intense storms that cau sed the blackout lead to severe inconvenience to everyone who was affected especial ly because the blackout happened during an extreme heat wave, the commenter (1043) said. Thousands of gasoline generato rs were used at private residences and many generators were improperly ventilated leading to great potential harm to those in the vicinity and causing carbon monoxide (CO) poisoning, the commenter (1043) added. Further public safety and environmental harm was caused by the blackout itself, commenter 1043 said. One commenter (968) added that the EPA’s revi sed evaluation of the environmental impact did not include full analysis of one environmental st ressor, which this modification will reduce. The commenter (968) said that under the current rule cities are prohibited fr om acting proactively to stabilize their distribution grid in the event of voltage dr ops. The commenter (968) believes that brownouts or blackouts will encourage residential customers and in stitutions, both exempt entities from compliance under the current rule, to install smaller, less effi cient, less maintained and higher polluting SI and compression ignition (CI) generators. The commenter (968) said that this rule modification would discourage that investment because it allows cities to pro-actively use their generators to stabilize the system. Another commenter (1072) added that while emergency generator engines will generally emit more pollution on a pounds per kilowatt-hour (lbs/KW-hr ) basis than a traditional generator providing power to the grid, limited operation of emergency generators to avert a potential blackout is preferable to the possible operation of thousands of generators if a blackout actually occurs. One commenter (1088) believes that the air quality impacts from operating emergency engines to prevent a power outage are outweighed by the public h ealth impacts created if a power outage were to occur. The commenter (1088) described an epidemio logical study on the effects of the Northeastern27 Blackout of 2003 on the New York City area. The co mmenter (1088) added that the increased use of personal generators in blackouts also have health impacts. Commenter 1025 stressed the importance of avoiding blackouts. One commenter (919) noted the importance of backup generators to ensure continuous operations at its wastew ater treatment plant. Some commenters (881, 896, and 905) emphasized th e importance of consistent power and DR to data centers. The commenters (881 and 896) explained that DR is an opportunity for data centers to use backup generators to help the community by preventing rolling blackouts. The commenters (881 and 886) stated that through participation in DR programs, data centers get advanced notification of pending grid issues, and when dispatched, can safely and methodically switch their f acilities over to backup generators. In doing so, the commenters (881 and 886) st ated that they are protecting their customers’ data, and other area businesses and homes from the negative effects of a blackout.

Rule Should Not Increase Air Pollution Impacts Some commenters (941, 942, 945, 951, 952, 968, 970, 1017, 1023, 1025, 1036, 1065, and 1113)
concurred with the EPA that this modification to the rule can be made without an increase to air pollution levels in affected areas . One commenter (968) said that in Missouri’s case these units are
located in rural areas 75 or more miles from non-attainment areas for ozone, and in small communities. Two commenters (1017 and 1051) said that the vast majority of RICE units in Kansas are “dualfuel” engines operated primarily on cleaner burning natural gas. According to the commenters (1017 and 1051), dual-fuel engines may be run on diesel fuel if necessary, but far more commonly are only started up on diesel fuel and then operated using natural gas. The commenters (1017 and 1051) said that the result is that roughly 90 to 95 percent of the fuel used by dual fuel engines is cleaner burning natural gas. Commenter 1051 added that operators of dual fuel units prefer to run them on natural gas because
that is the most efficient a nd cost-effective way to do so. One commenter (873) claimed that emergency DR has a net positive impact on the environment. The commenter (873) explained that the proposed rule only applies to existing emergency backup generators; therefore, there is no pollution from construction, no land or water use issues, and no new
transmission needed becaus e nothing new is being built.28 DR Replaces Need for Periodic Testing One commenter (1043) noted that hours used du ring a DR event can and are used as substitutes for the routine testing and maintena nce that is conducted on the engine. Commenter 919 said that it uses its participation in PJM’s emergenc y DR program to fulfill its testing and mainte nance requirements and argued that this actually lowers the carbon footprint of its facility. Commenter 923 al so said that it tests its engines at the same time it is operating for the Pacific Gas & Electric’s Negawatt Network DR

program. Multiple commenters stated when a DR event is ca lled it typically replaces the need to test the generator during that time frame, and generates an additional s ource of funds that can be used for maintaining facilities, staff, etc. Seve ral commenters (883, 887, 888, 889, 895, 897, 904, 908 and 913) added that this is in addition to providing a va luable service to the grid at the same time. One commenter (1142) further stated that owners of emergency engi nes have a distinct financial incentive to skip testing when actual event hours have occurred because they can both avoid the diesel fuel expense and reduce the total number of run hours on the engine by doing so.
Commenter 1064 said that the EPA has taken th e appropriate action and with the 100 hrs/yr allowance it provides stakeholders flexibility to ba lance DR operation, maintenance and routine testing, as the need for participation in DR and local envi ronmental runtime restrictions and operational needs change. This commenter (1064) added that in some cases it is possible that the time spent for emergency DR may serve as the routine testing necessary to keep the engine in good operating condition. In addition, the commenter (873) explai ned because backup generators need periodic testing, in many cases operating these assets for emergency DR events does not increase runtime or emissions as testing during that period is no longer necessary. One commenter (1082) agreed that, as the EPA concluded in the 2010 final RICE rule, emergency engines should be subject to work practice standards because they typically run for periods
that are far shorter than needed to conduct the refe rence stack occur during an emergency because such periods cannot be predicted. The commenter (1082) ar gued that the same rationale applies to operation of engines for emer gency DR purposes. Several commenters (876, 903, 908 and 911) stated that as a health care facility that needs to meet the needs of patients 24/7, it needs to be able to ensure the reliability of the emergency generator system. One of these commenters ( 876) stated that the use of gene rators for non-emergency DR keeps generators in better condition, resulting in a system best equipped to meet true emergency needs.29 Consistency with Other Rules One commenter (1142) noted that the proposed rule would make the RI CE NESHAP and NSPS consistent with the EPA’s Mandatory Reporting of Greenhouse Ga ses; Final Rule that allows for the use of emergency engines in emergency DR programs. One commenter (1044) agreed that the EPA’s re gulations should be modified to be more consistent with the DR qualifica tion and operation provisions that have been developed by RTO/ISO (and that have been approved by the FERC) to ensure the continued reliability of the electric system. The commenter (1044) stated that the new propo sed settlements ensure the DR qualification and operation parameters will be unchange d for its current members. The commenter (1044) added that it supports the revised rules, in part, because they are consistent with the requirements found in the commenter’s own approved DR programs. The commenter (1044) asserted that the revised rules are also
consistent with the fact that its members permit aggregations of DR customers and do not track the individual unit specific operation of genera tors that are used in DR programs.

Support DR for Other Types of Units One commenter (1043) expressed su pport for the proposed change that revises the language to allow engines above 500 horsepower (HP) located at major sources of hazardous air pollutants (HAP) emissions to participate in emergency DR pr ograms for up to 100 hrs/yr. One commenter (1151) expressed support for allowing public schools the abili ty to run their emergency generators in DR programs. The commenter (1151) said that the emergency generators need to be exercised to help them run more reliably and efficiently. According to the commenter (1151), unlike generators designed for commercial power applications, most emergency generators in public schools have very few run time hours on them, which means their piston rings and othe r components have little wear on them so they likely to produce less po llution than commercial pow er generators. The comme nter (1151) added that the revenue from supporting the regiona l grid would be helpful and th at running the generators would help lower a school district’s peak load contri bution in the PJM region, which would provide cost savings.

Response : The information submitted by the commenters supports the proposed amendments to limit operation for emergency DR to 100 hrs/yr. The EPA agrees with the comment ers that the proposed amendments were appropriate. The EPA agrees with the co mmenters that it is appr opriate to include a provision for operation of emergency engines for a limited number of hr s/yr as part of emergency DR30 programs to help prevent grid fa ilure or blackouts. The EPA believe s that the emergency DR programs that exist across the country are important programs that protect the reliability and stability of the national electric service grid. The use of stationa ry emergency engines as part of emergency DR programs can help prevent grid failure or blackouts , by allowing these engines to be used for limited hours in specific circumstances of grid instabilit y prior to the occurrence of blackouts. The EPA acknowledges the comments indicating the greater environmental and other costs and hazards that would result from a blackout if the power management authority did not take action to stabilize the system, like calling for emergency DR. The EPA also notes that incr eases in blackouts that can come from increased instability on the grid could lead to greater purchases and use of emergency engines, particularly smaller engines th at may pollute more per kW/hr. The EPA acknowledges the comments stating that running emergency e ngines for emergency DR has not been shown to directly cause increases in exceedances of air quality standards, and it is questionable whether there is any correlation between ozone exceedances and emergency DR, or whether having other energy sources called during
near blackout conditions rather th an emergency engines is benefici al or detrimental to pollution concentrations, particularly for HAP , but the main question for the EPA in a technology-related standard setting is what is the proper standa rd for a particular source, not wh ether pollution concentrations would be reduced if the source were not op erating. A standard that requires ow ners and operators of stationary emergency engines that participate in emergency DR programs to apply aftertreatment, as well as testing and other resulting requirements, could make it ec onomically and/or practically infeasible for these engines to participate in these pr ograms, impairing the ability of RT O and ISO to use these relatively small, quick-starting and reliable sour ces of energy to protect the reliabil ity of their systems in times of critical need. The EPA also notes, as discussed elsewh ere, the very high cost pe r ton of HAP reduced for aftertreatment on these emergency e ngines that operate so infrequently. 12 The EPA agrees that some of
the comments adverse to this rule were related to the particular circumstances of the PJM area and are more relevant to review by FERC and PJM. The EPA also agrees that its re gulations need to be reasonable across the country and cannot be solely re lated to what happens in the PJM area. The EPA
notes that states retain their exis ting ability to regulate emissions and electricity use within their borders. The EPA agrees with commenters regarding small and municipal power authorities that rely on emergency generators to prevent blackouts. The EPA also agrees with the comment that some of the adverse comments confuse emergency DR, which is ve ry limited in use and availability, with economic

12 Memorandum from Bradley Nelson and Tanya Parise, EC/R, Inc. to Melanie King, EPA. Cost per Ton of HAP Reduced for Existing Stationary CI RICE. February 11, 2010. EPA-HQ-OAR-2008-0708-0290.31 DR and peak shaving. As discussed in Chapter 2, th e EPA does not consider peak shaving consistent
with reasonable use of an emer gency engine; whereas the limited use of emergency engines in emergency DR, which is a last resort to prevent bl ackouts, is consistent w ith reasonable use of an emergency engine. As the commenters noted, these emer gency DR events are rarely called. Prior to the 2013 compliance dates for existing engines, there ar e no limitations on the hours of operation for those engines, and the evidence indicates that even withno EPA restrictions, use of emergency DR (which
also refers to load reduction as well as use of BTM equipment like emergency engines), was very infrequent. The EPA also agrees with the commenters that EPA’s incorporation of emergency DR into the hours allowed for testing and maintenance is par ticularly appropriate sin ce the hours operated during emergency DR often take the place of otherwise n eeded maintenance and testing operation, thereby not resulting in any increased use of the engine. The sta ndards that go into effect in 2013 will for the first time establish requirements for these engines, includi ng limitations on their hours of operation in certain situations such as emergency DR.

Setting and Managing the Cap on DR Operation
1.1.2 Comment : Some commenters (909, 937, 1025 and 1448) not ed that although emergency DR is rarely called, under various tariffs, engines need to be av ailable for more than 15 hrs/yr to be treated as a valuable resource. Some commenters (1025 and 1038) added that under ISO tariffs, emergency DR must be available for up to 60 hrs/yr. One commenter (1063) from the State of Alaska asked the EPA to revise §63.6640(f) and the definition of emergency RICE to limit all emergency RICE to 100 hr s/yr of operation, for any reason. Several commenters (975, 977, 979, 1111, 1150, 1169, 1317, 1318, 1319 and 1447) stated that the EPA should allow the use of emerge ncy stationary RICE for up to 100 hrs/yr for any purpose. One commenter (1149) agrees w ith the EPA’s proposed changes to expand the allowable hours of operation for an emergency RICE unit during sp ecific energy emergency periods, but is concerned with the proposed limit on hours of operation for an emergency RICE unit under these circumstances. The commenter (1149) does not believe that there shoul d be any distinction between the operation of an emergency RICE by a facility to prov ide power to the facility due to the unavailability of the primary power source and the operation of an emergency RICE to maintain the reliability of the electric grid system during an energy emerge ncy described by Federal reliabili ty standards. A few commenters (1060, 1083, 1152, and 1381) expressed support of the pr oposal to allow emergency DR operation for up to 100 hrs/yr and stated that this is a significa nt improvement from the current rule. However, the32 commenters (1060, 1083, 1152 and 1381) requested that th e EPA not impose a rest riction on the amount of time stationary engines can operate for em ergency DR. One of the arguments presented by commenters was that by definition the operation of emergency engines for emergency DR entails the presence of an imminent emergency. One commenter (1091) generally supported the pr oposed increase in the annual allowance for operating stationary emergency RICE as part of an emergency DR progr am, but stated that the proposed 100-hour limit represents a significant reduction fro m their current emergency DR program annual requirement of 300 hours for participating emergency RICE, which was established to protect the reliability of its uniquely situated island systems. The commenter (1091) argued that preservation of its DR program, including its 300-hour par ticipation requirement, is especial ly critical because its isolated island systems are not covered by a regional program and have fewer generation resources available in the event of an emergency. The commenter (1091) stated that its only alternative to utilizing small, fastresponding emergency RICE in its DR program is to continuously run larg er peaking units at idle, which would result in far greater annual emissions th an the DR program. Accordingly, commenter 1091 respectfully requested that emergency stationary RICE be allowed to participate in its emergency DR program for up to 300 hours. The commenter (1091) further requested that the EPA clarify a statement the Agency made in the preamble to the proposed rule and wishes to conf irm that its current emergency DR program requires emergency engines to be able to operate for 300 hr s/yr. The basis for this clarification, commenter 1091 stated, is the following statement ma de in the preamble to the proposed rule regarding its emergency DR program. [See 77 Fed. Reg. 3381 (June 7, 2012): According to the commenter (1091), the emergency DR program operated by the Hawaiian Electric Compa ny requires that emergency engines be able to operate for 100 hrs/yr in the even t of an emergency in order to pa rticipate in the program.] In its comments to the EPA, dated February 14, 2011, on the Reconsideration of the Limitation on Operations of Emergency RICE as Part of an Emergency DR Program, the commenter (1091) pointed out that “the requested increased limit for emer gency engine operating hours [from 15 to 100] is a reduction from the
300 hours in Hawaiian Electric's curre nt load management programs.” Two commenters (914 and 920) said that althoug h they are supportive of the proposal, they requested that 300 hrs/yr be permitted for emergenc y DR, peak shaving, and maintenance and testing. These commenters (914 and 920) argued that due to extreme temperatures in their region and what history has shown the proposed 100 hrs/yr is not enough to meet demand needs. According to the commenter (914), the region served experiences very hot conditions and extreme cold and if facilities33 are unable to use their emergency generators duri ng these times, the results could be deadly. The commenters (914 and 920) offered a suggested solu tion to address these situations and recommended
that the EPA not count the 100 hrs/ yr and 50 hrs/yr during times wh en the ambient air temperature where the emergency engines in question are located is 95° Fahrenheit or above and -4° Fahrenheit or lower. The commenter (914) estimate s that without the using of gene rators the commenter (914) would need to build a minimum of a 50 MW peaking stati on at a cost of $50 million, a cost which would be passed down to the consumers. For these reasons, th e commenter (914) asked that the rule allow 300 hrs/yr for any emergency use. One commenter (909) said that the proposed changes are in line with the states, but noted that the proposed rule is still stricter than most states rega rding emergency DR use, a nd greater flexibility would be useful when extended use is required. According to the commenter (909), most states allow up to 300 to 500 hrs/yr for emergency engine use, which include emergency DR. One commenter (1128) is supportive of the proposa l, but said that the 100 hrs/yr is not enough
and that the EPA should allow an unlimited amount of emergency DR use because these periods constitute emergencies. Commenter 1051 added that the EPA should allow the use of RICE units for greater than 100 hours annually in in stances of dangerous voltage devi ation as well as in NERC Energy Emergency Alert (EEA) Level 2 events. The comment er (1051) finds that many years its members do not need to run their RICE units at all, but that when they do, it is sometimes because there is an unpredictable emergency of large sc ale. According to the commenter (1051), in such events the units may need to be run for over 100 hours, because RICE units serve as a lifeline for remotely located
Kansas communities.
Commenter 1036 said that there ar e other circumstances beyond the control of local communities that should be defined as emergencies and shoul d not be counted against the 100-hour limit. For example, the commenter (0136) sai d, many Iowa communities are connec ted to the regional grid at subtransmission voltage, often by a single, radial line. The commenter (1036) said that diesel generators must run when maintenance on those or other up-stream facilities isolates the town from the grid or when their support is critical to avoid voltage sag in an adjacent utility. According to the commenter (1036), such events on sub-transmission facilities would not likely constitute a Level 2 EEA under NERC standards, but the consequences are the same for customer in the affected area and the RICE operation should be outside the 100-hour limit. In additi on, the commenter (1036) said that it is not clear that storm damage to facilities of a neighboring ut ility would constitute an em ergency to the municipal utility that is called on to support the emergency re sponse. The commenter (1036) said that RICE units34 should also be allowed to run when damaged permanen t units are repaired or replaced and that, at a minimum, a state or regional enforc ement agency should be allowed to grant an exception to the 100- hour limit for such permanent repairs or replacements. Commenter 968 added that the proposed revision eliminates the artific ial operational barriers unnecessarily erected in the original rule. Accord ing to the commenter (968), 50 hours for maintenance and reliability testing, up to 15 hours for emergenc y DR, and the remaining time allocated to other activities was never a practical schedule. The comment er (968) understood the EPA’s desire to limit the non-essential operation of the units and their concern th at these units not be opera ted solely for financial gain without investing those proc eeds in the reduction of emissions. However, the commenter (968) added that dictating the current structure is an ineffective way to use these generation sources, especially when the Federal limits allotted for emergency DR are lower than what is required by many RTO. The commenter (968) said that allowing local municipalities to more effec tively manage the limited run-time theoretically could actually result in lower total r un-times since there would be no questions about dual use operation (reliability testing during emergency DR operation for instance). One commenter (1398) said that the EPA should base its final decision on the reliability of the electric grid and preventing unnecessa ry costs being passed to consumer s. The commenter (1398) stated that DR has been extremely effective at mitiga ting grid emergencies and managing exceptionally high Locational Marginal Pricing (LMP) mechanisms. To balance the competing interests between electric generation companies and DR providers, the comment er (1398) recommends that the EPA should limit
the total number of hours these units are allowe d to run without pollution controls to the minimum number of hours (60) required by the capac ity market for which they are located. Two commenters (872 and 879) stated that emerge ncy DR should be for periods in which the RTO or equivalent balancing authority has declared an EEA Level 2 as define d in the NERC Reliability
Standard EOP

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‐ 3, Capacity and Energy Emergency, since this is how emergency DR is called. The commenters (872 and 879) endorse d the EPA’s proposed changes to the emergency DR trigger. Two commenters (937 and 989) specifically supported the proposed revisions to allow emergency units to operate for DR purposes when the RTO or equi valent balancing authority has
declared an EEA Level 2. Other commenters (966, 989, 1045, 1074 and 1445) added that they support allowing local transmission and distribution operators to call upon and operate their emergency unit for voltage support as part of the allowed 100 hours of operation. One commenter (1017) added that this flexibility is critical to small municipal systems, pa rticularly those served by a lower-voltage or weaker
transmission line.35 Two commenters (1051 and 1113) agreed with the pr oposal to specify that a 5 percent voltage sag counts as a deviation event qualifying for th e 100 hours of permitted ope ration, without requiring that the unit be called upon by the RTO. One comment er’s (1051) RTO delegates to the individual
transmission owners that own the transmission lines serving Kansas Power Pool, and sometimes to the cities themselves, the job of monitoring local syst em conditions to determine when the specified reliability criteria violations are likely to occur. The commenter’s (1051) me mbers, therefore, are capable of monitoring and recording when there is a 5 percent voltage de viation on an incoming transmission line that triggers operation of a RICE unit for local voltage support. Several commenters (941, 942, 945, 951, 952, 970 and 1104) support the EPA proposing the use of voltage variance as an appropriate alternative to the EEA Level 2 trigge r for allowable emergency DR, but expressed concern that a 5 percent or greate r voltage variance would not be sufficient to avoid or isolate system problems, particul arly for very small systems, which they believe could cascade into neighboring systems. One commenter (1051) asked that the EPA clarif y that a local system operator (or utility) does
not need to wait until there is a full-blown outage before allowing the local utility to take action. The commenter (1051) said that prudent ut ility practice dictates that utilities react when they see emergency conditions developing and not to wait for the harm to occur. According to the commenter (1051), the transition from developing conditions to actual em ergency with outages can happen in seconds or fractions of a second such that an actual 5 per cent voltage drop on the local power system would constitute an emergency event tri ggering power outages and reliabili ty violations. Some commenters (1051, 1113) asked the EPA to clarify that a utility or relevant authority can identify the impending threat of such a reliability event by monitoring in coming lines for 5-percent voltage deviations. Then, the commenter (1051) said, operators can create reasonably contemporaneous records explaining the emergency that was pending.

Response : The EPA agrees with commenters who note th at while emergency engines are used very rarely in emergency DR, emergency engines are required to be available for more than 15 hrs/yr to qualify for emergency DR programs unde r ISO tariffs, and these engines are occasionally used for more than 15 hrs/yr. As discussed above, the EPA also agrees with commenters who state that most emergency engines will not sign up for such programs if they ar e required to meet all of the requirements for non-emergency engines under the RI CE NESHAP. Thus, requi ring emergency engines to be used for 15 hours or less in emergency DR progr ams would deprive such programs of being able to36 rely on such engines in near-blackout situations. The EPA also agrees with commenters that it was appropriate to propose that a 5 percent voltage sa g counts as a deviation event qualifying for the 100 hours of permitted operation, without requiring that the unit be called upon by an RTO. The EPA does not agree with the commenters who state that the e ngines should have a limit of 100 hours of operation per year for any purpose. The comme nters did not provide any informa tion about what the additional uses of the engines would be for those hours and whether they would appropriately be considered emergency use of the engine. The RICE NESHAP does not require emer gency engines to meet emission limits that would require the use of add-on controls based on consider ations including that the engine may not operate long enough for the catalyst to reach temperature to become effective, the need for these engines to be operated with little time for star tup, and the impracticability of operating the engine to test emissions when the engines operate so infr equently and at unpredictable times. The commenters
have not shown that these considerations would be th e same for engines that could operate 100 hrs/yr for any purpose. As discussed in section 2 below, the EPA does not believe that engines can properly be considered emergency engines when they can be used for any purpose, in par ticular purposes that are not emergency use and for which the owner or operat or receives financial compensation, for as long as 100 hrs/yr. The EPA has carefully circumscribed the us es of emergency engines such that their use is related to emergency situations or to the required tes ting and maintenance of the engines. If an operator wishes their engines to be generally available fo r non-emergency purposes, they can do so as long as they meet the requirements for non-emergency engines. The EPA has allowed emergency engines 50 hours of non-emergency use, but has limited such non-emergency use to operation that does not entail financial benefit, so as to avoid these engines be ing used more often than needed in non-emergency situations. This allowance was particularly intended for engines in isolated locations where rare and limited use of an emergency engine is preferable to requiring a mobile nonroad engine to be brought in for short usage. As discussed in sections 1.4 and 2 of this document, the EPA is in this final rule allowing new non-emergency use for such engines, which includes financial compensation, but the use is only for careful circumscribed si tuations where failure to have the engine available could lead to potential voltage collapse or line overloads that could lead to the interruption of power supply in a local area or region. The EPA also does not agree that there should be no limit on operation to maintain the reliability of the electric grid during energy emergencies or th at there should be a limit of 300 hours. The EPA agrees with these commenters that emergency DR re presents true emergency situations, but the EPA
believes that the limit of 100 annual hours is an im portant limitation on the program. The EPA believes37 that it is important to ensure that these engines, which have no aftert reatment, are not run in the future for longer hours than are necessary and appropriate. The EPA has not put limits on the amount of time engines can run when access to the grid has failed b ecause these engines in that case may be performing service that cannot be performed by other means and that may be necessary to protect against grave consequences. Blackouts can often last longer than 100 hours, and it is not appropr iate to put limits on engine use in such situations. By contrast, th e limit of 100 hours for emergency DR helps address concerns about the impacts of the emissions from these engines, as discussed in response to comment (RTC) 1.2.11. The EPA has justified its allowance for emergency DR based in part on the historical knowledge that ISO and others have not relied on emerge ncy engines for emergency DR purposes more than a few hrs/yr on average. The EPA believes that if situations arise where emergency DR is being called for greater than 100 hrs/yr, it is likely that an inordinate amount of relia nce is being placed on this program to ensure grid reliability, rather than ju st emergency backup. Emergenc y engines that have not been subject to aftertreatment controls should not be relied upon for such activities. The EPA believes that 100 hrs/yr is sufficient to provide enough availa bility for emergency DR situations. If engines are needed to operate for more than 100 hours, they can do so as long as they meet the requirements for a non-emergency engine. The EPA note s that putting controls on emer gency engines would reduce the need to have a peaking station as an alternative, bu t that this comment seems to belie the concern that such engines are being used not for true emergencie s, but as a substitute for peaking power. The related comment by the commenters (914 and 920) regarding use during periods of high and low temperature, which events are known and can be planned for, also s eems to be related to use th at is not intended to be covered by emergency DR. In response to the comment claiming that emer gency engines should be allowed to run when damaged permanent units are repaired or replaced, th e 50 hour allowance included in the final rule at §63.6640(f)(3) and (4) can be used in this situation. However, note that thes e provisions come with specific restrictions, as specified in §63.6640(f)(3) and (4) and that us e for more than 50 hours in such non-emergency conditions as the commenter talks about is not appropriate for engines that are intended solely for emergency use and that do not have aftert reatment. If the engines are needed to be run for more than 50 hrs/yr in non-emergency situations, th e owner or operator can a pply aftertreatment and comply with the non-emergency emission standa rds and operate without hour restrictions. Regarding comments questioning whether allo wing operation during a 5 percent or greater voltage variance would be sufficient to avoid or is olate system problems, par ticularly for very small systems, which could possibly cascade into neighbori ng systems, American P ublic Power Association38 (APPA) (commenter 10 82) indicated that a 5 percent variation is sufficient. Also, the American National
Standards Institute standard C84.1–1989 defines the maximum allowa ble voltage sag at below 5 percent. On the local distribution level local voltage levels ar e important and a 5 percent or more change in the normal voltage or frequency is an indication that additional resour ces are needed to ensure local distribution system reliabil ity. This situation would be indicative of severe instability on the system. However, commenters do not provide sufficient evidence to indicate that emergency engines should be used at levels below 5 percent. Utilities that wish to take extra precautions can use emergency engines at voltage variances below 5 percent as part of the 50 hour non-emergency allowance if they believe that in a particular situation even without voltage variances of 5 percent it is prudent to turn on emergency generators. Utilities can also ensure longer availabi lity of the engines by ensuring that these engines meet the requirements for non-emergency engines. Regarding the comment requesting clarification that a local system operator does not need to wait until a full-blown outage before taking action, the EPA has specified in the rule the situations when the engines can be operated to prevent an outage. Rega rding the request that EPA clarify that the utility can identify the impending threat of a reliability event by monitoring incoming lines for 5 percent voltage deviations, the rule specifies that an engine can run if there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency, and there is no prohibition on monitoring the incoming lines.



### 1.2 Opposed to Proposed Emergency DR Provisions

1.2.1 Comment : A number of commenters (954, 955, 961, 994, 998, 1011, 1047, 1076, 1088, 1067, 1077, 1090, 1094, 1101, 1102, 1107, 1122, 1123, 1124, 1134 and 1140) expressed opposition to the proposal to allow emergency engines to operate for DR purposes for up to 100 hrs/yr without emissionsreducing controls.

Response : As discussed in detail below, the EPA believes that it was ju stified to propose to extend the hours permitted for emergency engines to be used in emergency DR programs. The EPA is finalizing the proposed provisions.

1.2.2 Comment : One commenter (1103) asserted that peak shaving and emergency conditions occur at
the same time and the commenter believes that the EPA should clarify guidelines for emergency conditions that qualify RICE units for receiving ex tensions in operating hours. As the EPA does not39 clearly define what an “emergen cy condition” is on the power grid and does not define the correct measurement of the 100-hour cap for operating the RICE units, the commenter (1103) asserted that the RICE rule as proposed would allo w diesel generators to sell power to the grid under the guise of “emergency” conditions when no emergency exists. Commenter 1103 added that, in the long run, RICE
units used for DR should be held to the same cr iteria for capacity and re liability as supply-side generating units. One commenter (1094) said that although it believes the intent of the Agency is to limit the operation of BTM-related DR to tr ue emergencies in which trans mission system operations may be threatened, as the commenter said it explained in prior written comments, expanding the exemption for BTM resources to 100 hours can be expected to result in dispatch of BTM resources before or at the same time as other types of generators.

Response : The EPA does not agree that it has not defi ned the emergency condition under which engines may operate for emergency DR. The EPA specified th at the operation could only occur when an EEA
Level 2 had been called under the NERC Reliabili ty Standard EOP-002-3, Capacity and Energy Emergencies. The standard is available at http://www.nerc.co m/files/EOP-002-3.pdf and incorporated by reference into the stationary engine rules (40 CFR part 60, subparts IIII and JJJJ, and 40 CFR part 63, subpart ZZZZ). In the standard, EEA Le vel 2 is clearly defined and can only be called in near blackout situations and only transmission system operators su ch as PJM, ERCOT, ISO- NE and utilities that maintain the grid can dispatch emergency DR unde r EEA Level 2. In order to declare emergency DR, a strict sequence of events is required to be followe d and the entity must also report such actions to NERC. Because of stringent specific procedures de scribed in detail in NERC’ s Reliability Standard EOP-002-3, it would be extremely unlik ely that an engine owner or ope rator would atte mpt to operate and claim it was running for emer gency purposes if there was no EEA Level 2 called. So the EPA does not agree with the commenter that it is a real conc ern that owners and operators will try to operate and sell power to the grid under the guise of an emer gency. Also, emergency DR is only called when the entity managing the system determines that there is insufficient gene ration to meet the electric demand and prudent operating reserves in the case of vo ltage reductions and rotating blackouts. The power authority would be extremely hesitant to call these t ypes of emergencies because it is their responsibility to maintain reliability of the system and allowing more emergencies and risking system reliability is against their mandate. Further, as indicated by comme nter 1043, EEA Level 2 status is rarely declared, but in the rare case that EEA Level 2 is called, procedures are taken very seriously by RTO and40 transmission operators. Again, there are strict reporting requirements that must be followed in these
cases and information must be submitted to NERC about what happened, the cause, and steps taken to mitigate the situation. For these reasons, the EPA be lieves that concerns that EEA Level 2 emergencies will be exploited by transmission sy stem operators are not valid. Regarding the comment that the limitation of 100 hours for operation for emergency DR in EEA
Level 2 situations would re sult in the dispatch of BTM resources be fore or at the same time as other types of resources, the EPA notes th at decisions about the order of ge neration dispatch are the purview of the entities responsible for dispatching those un its and not the EPA. With that being said, the commenter did not provide any data to show that the other types of resources would have lower emissions than stationary engines.

1.2.3 Comment : Some commenters questioned whether emerge ncy DR operation is truly an emergency. One commenter (1076) believes that the original 15-hour limit is suffic ient and that emergency diesel engines should only be operated fo r true emergencies. Commenter 1140 argued that these engines are used for economic use rather than “emergency” us e because DR programs increase their incentives for participation and the backup units end up competing with other cleaner gene rating resources to earn money. According to one commenter (1134), neither a 5 percent voltage devia tion nor an EEA Level 2 event, is a true emergency (i.e., blackout). The comme nter (1134) said that the reference to “emergency DR” is actually a misnomer. In actuality, utilitie s will use generating resources and non-backup DR resources (i.e., true demand curtailment) prior to losing the electric grid in dependent of whether the proposed rule is finalized, commenter 1134 sai d. Commenter 1123 expressed similar opinions as
commenter 1134 in their letter.

Response : As discussed in preamble to the proposed rule and supported by a substantial amount of comments received on the proposed rule as summari zed in section 1.1 of this RTC document, the existing 15-hour limit for emergency DR operation is not sufficient to meet the needs of current emergency DR programs. For that reason, the EPA proposed to increase the allowance to 100 hrs/yr for emergency DR purposes. Various ISO and RTO acro ss the country operate emergency DR programs that assist in stabilizing the electric grid, preventing electrical blackouts and supporting local electric system reliability. Certain stationa ry engines are maintained in order to respond to emergency power needs under these programs and such operation is considered an emergency activity. The permitted allowance for emergency DR operation is solely fo r emergency purposes only and does not depart from41 and is not inconsistent with the previous meaning of emergency ope ration. It is the Agency’s opinion that emergency DR is emergency use and it does not c onsider engines that can only run in near blackout conditions to be part of normal capacity. The commenters who claim that engines used in emergency DR are being used for economic use rather than emergency use fundame ntally misunderstand the limited us e of these engines. Emergency DR operation is called only in response to grid emergenc ies. Economic DR is entirely different in that it is not for emergency purposes, but that operation is in response to high prices.
The commenters confuse the issue of whether EEA Level 2 or 5 percent voltage/frequency fluctuations is a true emergency compared to whet her there may be alternatives to using emergency engines in such a situation, but that is not the appr opriate question. The fact that something must be done to alleviate instability to prevent a blackout means that there is an emergency situation, as prevention of blackouts are in and of themselves sufficiently emer gency operation. The fact th at other types of power (or curtailment) might be implemented to prevent th e blackout does not mean th at the emergency is not occurring. Indeed, that argument could require the EPA to ban all sources of operation from activating in such situations, as it may always be possible to have limited curtailments rath er than new sources of power. It not the job of the EPA to decide what type of power should be used in emergency situations; that is the job of the power authorities. The EPA’s re sponsibility is to determin e what types of controls are appropriate for engines operating in such situa tions, and as discussed elsewhere, the EPA does not
believe aftertreatment is appropriate for emergency engines in such situations. As discussed in RTC 1.2.2, there are specific conditions under which a Level 2 alert can be called and strict procedures that must be followed for the power authority under such conditions. Therefore, grid operators regulated by NERC must follow very rigid requirements in emergency situations. During an EEA Level 2, there is a real potential for blackouts due to an inadequate energy supply, and under the RICE NESHAP, these are the onl y situations when the emergency engine can operate for emergency DR. These t ypes of situations, which are narrow in scope, are clearly justified uses for emergency engines. System operators do not like to be in these situations, again, whose main mission, as discussed in RTC 1.2.2, is to provide relia ble, safe, and continuous supply of electricity. System operators and other power authorities have no interest or incentive in letting the electric grid reach EEA Level 2 status or 5 perc ent voltage/frequency fluctuations as that already i ndicates a system in severe instability. It is clearly better and pr eferred to prevent a blac kout before it happens until waiting until a blackout has occurred and dealing with the consequences of the loss of power, which can be catastrophic. Also, maintaining reliability of the grid by using a small portion of available emergency42 generators during an EEA Level 2 or 5 percent fluctua tion in voltage or frequenc y is infinitely better than waiting until conditions have worsened beyond these levels and a greater number of emergency generators would have to be ca lled to operate because of the to tal loss of power. Emergency DR programs are rarely called upon and are only called on dur ing true emergencies. Therefore, given that emergency DR operation is intended to prevent blackouts, the provisions the EPA is finalizing to allow emergency DR operation for up to 100 hours per calendar ye ar is consistent with the type of usage that is within the realm of emergency operation.

Proposed Rule Displaces Clea ner Generating Alternatives
1.2.4 Comment : In one commenter’s (1140) opinion, if the pr oposal stands, it will encourage the use of backup generators, including uncontrolled generators, as routine suppliers of powe r to the electric grid, replacing the use of cleaner alternatives of en ergy and will according to commenter 1140 create a loophole for backup generation units that will di splace cleaner, low-, and non-emitting resources. Commenter 1122 agreed and asked that the EPA withdr aw the entire rule because the decision to allow for expanded use of diesel engines is ill-founded and deeply flawed. It is critical to maintain a reliable and more responsive electrical system that is powered by cleaner gene rating sources and adopting a rule that subsidizes dirty heavy-polluting diesel engines is contrary to this goal, the commenter (1122) said. Commenter 1123 also agreed and said that the rule will give diesel backup generators an unfair advantage and distort the nation’s electricity markets. Similar st atements were made by commenter 1107 who said that the rule will distort the market by e ssentially subsidizing one ge neration resource that will be able to continue to operate in an uncontrolle d manner and deter the market from focusing efforts on cleaner, controlled generating resources that are more efficient and lower emitting. One commenter (1101) believes that clean reliable DR programs are im portant to the power gri d, but that the rule as proposed threatens to lessen the benefits of DR by a llowing economic incentives for diesel generators to participate in such programs without appropriate c ontrols. Commenter 1101 said that the EPA should require diesel generators to meet the same emission standards as a ny other economic DR participant. Commenter 1134 asserted a similar opinion. Commenter 1076 said that the proposal to allow additional operating hours for diesel engines to run under DR programs is particularly damaging because diesel engines typically emit more harmful air pollution, proportionally, than large generating units. In other words, the commenter (1076) said that when diesel engines are called to operate, the cost of producing electricity is a higher rate of pollution43 per unit of electricity, and investi ng in dirty diesel engi nes (time and money) displaces DR programs that could pull backup energy from cl ean, renewable electricity generatio n such as solar or wind power. Commenter 1011 also agreed with other comme nters who are against uncontrolled engines participating in emergency DR ope ration that the proposed provision would lead to a greater use of diesel generators under DR programs for financial reasons and would deter investments in cleaner generation. The commenter (1011) said that the emissions from diesel generators are detrimental to air quality because they have substantially higher em ission rates than natural gas-fired peaking or combined-cycle power plants. One commenter (1123) said if the EPA needs to m ove forward with some type of exemption in the final rule, it should be narrowly tailored to min imize adverse impacts and to fulfill the Agency’s requirements under the statute. The commenter (1123) did not provide a specific alternative, but urged the EPA to consider the concerns raised by the commenter in reviewing re commendations from other commenters and arriving at a fina l decision. The commenter (1123) as ked that the EPA at a minimum prohibit backup generators from taking advantage of the exemption to obtain capacity payments since the sale of capacity occurs even in hours where no emergency has been declared. The commenter (1123) said that diesel backup generators should not be used for-profit under the guise of addressing electrical reliability. Commenter 1134 cited the report by Analysis Group 13 submitted with its comment letter that it claims demonstrates that participat ion of DR resources in the PJM cap acity market results in increased emissions of greenhouse gas (GHG), criteria pollutions and HAP. The report also indicates that stationary RICE resources for DR are not needed to ensure power gr id reliability, the emission impacts associated with RICE operation for DR reasons are not insignificant due to the limited operation of such units, as claimed by the proposed rule and DR providers , successful participation of RICE-backed DR in capacity markets increases generation from higher-emitt ing resources, resulting in increased systemwide emission of GHG, criteria pol lutants and HAP, and participati on of RICE-backed units in DR programs may reduce overall system reliability, as the deployment of more efficient, reliable resources offering enhanced reliability services is suppressed by the capacity markets. Commenter 1140 agreed that used properly, DR reduces energy use and may increase market efficiency and system reliability while reduci ng costs. In DR programs, customers can reduce

13 See report titled “Reliability and Emission Impacts of Sta tionary Engine-Backed DR in Regional Power Markets” included as an attachment to comments submitted August 9, 2012 by Ca lpine Corporation on the proposed rule (EPA-HQ-OAR-2008- 0708-1134).44 consumption or add sources to provide electricity th at would otherwise be obt ained from the grid, the commenter (1140) said. However, both methods of meeting insufficient electricity demand have
different health and environmental impacts and frequently the units us ed to create more power are dirty, diesel backup generators as opposed to cleaner resources such as solar panels, the commenter (1140) said. Commenter 1076 added that using diesel engines to serve the elect ric grid for certain times during high demand does nothing to reduce consumption or provide an incentive to consumers to reduce electricity use. All it does, the commenter (1076) sai d, is substitute the source of electricity from a larger, more efficient source of generation, to dirtie r diesel engines. The commenter (1140) added that because backup generators are often old and dirty diesel engines, the use of these units can lead to more emissions even if other grid sources are clean ing up. Commenter 1134 pointed out that uncontrolled BTM engines, which are often located in densely populated areas, have significantly higher emission rates than virtually all other generating resource s, especially natural gas-fired power plants. In the commenter’s (1140) opinion, as propose d, this regulation will increase the nation’s reliance on high-emitting, uncontrolled generators to power the larger grid. In contrast, the commenter (1140) said, the appropriate action to increase electric reliability a nd to minimize public health risk is to provide incentives to promote energy efficiency a nd decreased consumption during peak periods, as opposed to favoring highl y-polluting generation. Commenter 1077 agreed that increasing the a llowed amount of limited DR operation for small generators will lead to potentially displacing legi timate DR resources and new base-load, gas-fired combined cycle operations, which are more economi cal due to the current low natural gas prices resulting from shale gas development. The rule w ould displace cleaner generation and interfere with investments in clean energy the commenter (1122) said. One commenter (998) argued that the increased use of domestic na tural gas resources reduces the country’s dependency on foreign oil and benefits the nation’s national security. The proposal to exempt diesel generators from installi ng add-on controls is a hindrance to the adoption of cleaner burning domestic natural gas, the commenter (998) said. Th e proposal provides unfair advantage to small, inefficient diesel generators and the EPA should leve l the playing field for more efficient and cleaner natural gas fired facilities to be able to compete on an equivalent basis, the commenter (998) urged. The commenter (998) believes that the EPA should justify the exemption it has proposed or allow states to implement a viable emissions trading program that will benefit the environment while providing a fair market benefit for electric power providers.45 One commenter (954) noted that stationary dies el engines comprise the vast majority of emergency generators, and these engi nes are far more polluting than gas simple cycle turbines and other options for distributed generation as noted in the differences in nitrogen oxides (NO x ) emission factors (21.8 lbs/MW-hr for new diesel gene rators compared to the 0.6 lbs/MW-hr for medium simple cycle turbines), as referenced in Emission Rates for New DG Technologies , May 2001, Joel Bluestein. Commenter 1047 added that, while newer RICE m odels may be well-controlled, older uncontrolled
units can emit 200 to 400 times as much NO x per MW as a new combined-cycle power plant and 10 times more than a coal-fired power plant. One commenter (954) said that the rule should avoid disincentives for operating diesel generators preferentially while balancing their use to maintain the stability and reliability of the elect ric service grid. The commenter (954) suggested that there are various supplemental generators that can be used to prev ent blackouts and grid failure without having a major negative impact on air quality in urban areas. Commenter 1067 stated, as other commenters also expressed, that the proposed rule to allow stationary emergency engines to pa rticipate in emergency DR and p eak shaving programs without being controlled, in situations that are not true blackout emergencies, undermines the Agency’s previous
efforts to decrease air e missions through cross-state air polluti on rules and Mercury and Air Toxics Standards (MATS). The commenter (1067) said that it creates an unlevel playing field and will displace clean generation. Emergency engines should only be permitted to operate for true emergency situations
if not controlled. Commenter 1124 explained that, in the capacity market, RICE generators used to support Limited DR displace only conserva tion-based Limited DR. According to the commenter (1124), when a generation resource is offered in re liability pricing model (RPM) auc tions, there must be a specific, identified generating unit that is offered, but this is not true for DR offers in the capacity markets. In the case of DR, the commenter (1124) said that the actu al resources which will support the offer can be identified just prior to the actual delivery year. The commenter (1124) said that the result is that a change in incentives like that contemplated by th e Agency can have a very significant impact on the actual DR resources used to suppor t the Limited DR that has been sold through the 2015/2016 delivery year. If RICE resources are made more attractive, the commenter (1124) said, there will be a substantial incentive for curtailment service providers (CSP) to use RICE resources instead of conservation-based DR to meet their Limited DR obligations. The mo st important and harmful effect of the proposed increase in allowed RICE generator run hours would be the displacement of conservation-based DR in capacity markets.46 Commenter 1124 said that the effective cap on L imited DR has been hit in every RPM auction since it was imposed. The commenter (1124) said that this is because Limited DR is less expensive to provide than both Annual DR and conservation- based DR. According to the commenter (1124), conservation-based DR could provide the full amount of Limited DR, but this is displaced by RICE generator-based DR. The commenter said that 3-year auction results show th at DR, mostly offered by CSP, has claimed a significant and growing portion of the PJM’s capacity requirements for future years and proved data illustrating this growth (page 9). The commenter (1124) believes that allowing additional run time for RICE generators provide s a strong incentive for CSP to include a greater proportion of these environmentally uncontrolled and inefficient resource s, but leaving the exemption at the 15-hour level would provide an incentive to CSP to meet a greater proportion of their demand side response (DSR) obligations through conservation-base d DSR. The commenter (1124) said that RICE generators should participate in th e wholesale power markets based on th eir full costs without attributing any special status to them when they are used to support participation in DS R programs. The choice of DR technologies should remain an economic choice, one that reflects all of the associated costs and benefits. RICE generators should participate in the wholesale power markets based on their full costs without attributing any special status to them wh en they are used to s upport participation in DSR

programs. One commenter (961) expressed that it generally is in support of efforts to integrate DR
resources into the market if it occurs in a fair and equitable way. However, the commenter (961)
indicated that because of financial incentives curren tly available to DR resources and due to a broad interpretation of what classifies as DR, a substantial number of BT M generators that were meant to serve as true emergency resources are at this point operating under DR programs, consequently directly competing against traditional generation resources th at the EPA has required to install emission control technology, according to the commenter (961). Commenter 1134 concurred with the opinions of commenter 961 that such a proposal incentivizes the use of unregulated diesel backup generators in DR programs. The commenter (1134) cited to a February 2012 letter 14 it submitted to the EPA on the settlement agreement, where the commenter (1134) argued that such a proposal displ aces traditional supply resources that have much lower emission rates, plus, the procurement of dies el backup generation in the DR market lowers the
incentive to build new efficient na tural gas-fired combined cycle a nd renewable generating facilities.

14 Letter from Donald Neal, Vice Presiden t, Environmental Health & Safety, Calp ine Corporation to Docket ID No. EPAHQ-OGC-2011-1030. February 2, 2012. EPA-HQ-OGC-2011-1030-0015.47 Further, commenter 1134 believes the proposal magni fies the flaws of the settlement agreement, by proposing an additional 40 hrs/yr than what the DR aggregators requested in their original petition. In response to statements made by DR supplies, comment er 961 said that the EPA has no direct control over the electricity capacity market s, but that any waiver of envi ronmental requirements for backup generations would act as a direct subsidy to some types of generation, but not others, and the EPA is unintentionally creating a market preference. As argued by othe r commenters opposed to allowing engines to participate in DR programs with the necessary emissions controls, commenter 961 believes the rule by allowing reliance of additional di esel-based BTM generation will discourage the development of cleaner foss il and renewable resources. Due to the financial benefits available to partic ipants of these economic capacity markets, in the commenter’s (961) opinion, the only probable result of finalizing less stringent environmental standards for diesel generators is giving those resources and unwarranted competitive advantage over other capacity resources with superior en vironmental and operating characteris tics, and increase the presence of these uncontrolled resources. The commenter (961) urged the EPA to provide a level playing field for all generating resources. On the other hand, one commenter (1082) argued th at the RICE exemption would not necessarily lead to a displacement of cleaner generation as asserted by others.

Response : The EPA does not agree with the commenters th at the final rule will encourage the use of backup generators in lieu of cleaner alternatives of energy. Rather than providing incentives, the RICE NESHAP requirements that take effe ct in 2013 will for the first time limit the operation of these engines for emergency DR. The commenters assert that if dies el engines did not partic ipate in DR, the diesel generation would automatically be replaced by “cleaner ” generation, such as combined cycle natural gas turbines. However, there is no guarantee that th is would be the case, and as noted by other
commenters, 15 the generation could in fact come from coal fired spinning reserves. The decisions made by ISO are based on price, not emissions. There is no reason to believe that the absence of emergency generators would lead to the use of new natural gas turbines, as opposed to other types of generation like older coal plants. In addition, the commenters do not take into account the fact that emergency generators can be turned on fairly quickly and do not need to be in idle or standby mode, which can

15 Evaluation of the Calpine Report on the Reliability and Emission Impacts of RICE-Based DR in PJM. NERA Economic Consulting. Prepared for EnerNOC. October 10, 2012.48 cause emissions. Moreover, nothing in this rule will have any impact on the t ype of generation that would replace emergency engines if su ch engines were not available. The commenters also assume that one can extrapol ate results seen for PJM to the entire country, which is not the case. The commenters presume that ther e will always be a source of electricity that can be used in the place of emergency generators when near-blackout conditions are present. While this may or may not be the case in well organized areas like PJM, this is not the case in other areas of the country where emergency engines may be the only source of ge neration to stabilize electricity output in nearblackout situations. As discussed in summary of comments under se ction 1.1, there are substantial environmental consequences of actual blackouts, when all emergenc y generators, including the vast majority that would not have been called under EEA Level 2, will ope rate. Operation of some emergency engines to prevent such blackouts is preferable environmentally and will also prevent many of the other problems that people endure during blackouts. For instance, as talked about under the heading Avoid Adverse Impacts of Power Outages, thousands of smaller gasolin e generators were used at private residences and many generators were improperly ventilated during a power outage, leading not only to greater negative environmental impact, but jeopardized public health and safety.
The commenters also claim that the RICE NESH AP would give preferen ce to diesel engines over natural gas fired turbines, when, in fact, natural gas fired turbines are currently not subject to any requirements under NESHAP. Moreover, contrary to some commenters’ terminology, emergency engines are not exempt from nationa l standards. Those in the source category are not required to put on aftertreatment, but are subject to generally availa ble control technology (GACT) or other standards. Additionally, as discussed in RTC 1.2.8, the EPA is re quiring emergency engines th at are contracted to be available for greater than 15 hours for emergency DR to use ULSD fuel, which will reduce levels of particulate matter (PM) , sulfur dioxide (SO 2 ), hydrocarbons (HC) and HAP from such engines. It is worth noting that new emergency diesel engines are s ubject to Tier 2 or Tier 3 emission standards (see 40 CFR part 60, subpart IIII). Those commenters aski ng for all sources to be subject to the same
standards do not understand the tec hnology-based provisions in the statut e, which require EPA to look at the abilities of new and existing so urces based on the particular sour ce categories or subcategories in which they belong. Additionally, these commenters mista kenly believe that the EPA actually has more stringent NESHAP for natura l gas turbines, but this is incorrect. It is hard to argue that the EPA’s regulation of emergency engines distorts the market when the EPA also does not require natural gas
turbines to meet emission standards under NESHAP.49 Moreover, the commenters’ incorrectly assume th at EPA’s direction in promulgating regulations
under section 112 of the Clean Air Ac t (CAA) should be based on its effect on markets, rather than the particular technological considerati ons that are relevant under section 112 of the CAA. The market for energy is handled in other arenas and the EPA’ s source category by source category regulation of pollution sources is not an appropriate place to “level the playing field” with regard to an entire electric generation industry; nor is managi ng energy markets within the EPA’s general area of expertise. State energy and environmental agencies are capable of promulgating requireme nts that would subject stationary emergency engines to mo re stringent standards if they e ngage in emergency DR, and some agencies do so. Further, commenters can turn to thos e agencies and entities like ISO that actually engage in regulating or commanding the electricity markets with their concerns regarding the effect on the market of emergency generators, whether emergenc y generators should be included in DR programs equally with conservation, or the a llegedly favorable treatment of gene rators, or other types of DR, by the particular ISO or regulator in question. The commenters did not provide any information to show that the growth of renewable energy would be negatively impacted by th e RICE NESHAP. However, othe r commenters (1142) did submit information showing that emergency DR has not pr evented the growth of renewable energy in PJM where DR has grown faster than anywhere else; renewable energy resources are also growing at approximately the same rate. The commenter (1142) also cited inform ation from the Energy Information Administration (EIA) that renewable energy prod uction increased by 56 percent between 2001 and 2010 over the same time period that DR also increased significantly. It is also not clear that emergency engines used for emergency DR coul d be replaced by baseline units, as such units would not be built to operate solely for the short amount of time needed for emergency DR. Other than emergency engines, generation units are not built solely for emergency use, as the cost of such units could not be justified given the very limited use during near-blackout condi tions. The EPA’s decision, discussed in section 2 below, not to allow emergency engines to be used for peak shaving furthe r reduces competition from emergency engines by further restricting operatio n during non-emergency usage. This points to a mistake made in many of the comments opposin g the EPA’s proposal on emergency DR. The commenters mistake emergency DR with economic DR. In economic DR, sources compete against oneanother as sources of economic cap acity, without restrictions on the conditions in which they can be called by ISO. However, emergency DR can only be us ed in specific limited situations of near-blackout
conditions under the RICE NESHAP. These are situations, as discussed in section 1.1 that are clearly consistent with operation as emergency generators.50 Regarding the report submitted by the Analysis Group, the EPA notes that there is no guarantee that emergency DR would be would be replaced with new gas or wind generation, and that the rationale used in the report would treat even DR that is not based on diesel generation as undesirable. The results may be dependent upon fuel price assumptions, and ar e also only applicable for areas with capacity
markets. Engines (or other sources) that are so limited are not used as a method of increasing supply in peak-load situations, but as a method of preventing blackouts in emergency situ ations. Emergency DR is therefore much less likely to be subject to abuse or substantial increases on usage. Most commenters make no attempt to distinguish between these type s of DR and make argume nts more directed at economic DR, which the EPA is not permitting in its final rule. See section 2 for comments and response regarding peak shaving. The EPA believes that it has set appropriate standards for emergency engines based on the requirements of section 112 of the CAA, which requi res EPA to set standards for major sources based on the maximum achievable control technology (MACT) , and standards for ar ea sources based on generally available control technology. As discus sed in more detail in RTC 1.2.7 and 1.2.8, the EPA has taken measures to limit the impact of the emissi ons from these engines by limiting their hours of operation for emergency DR and requiring the use of u ltra low sulfur diesel (U LSD) fuel. As discussed in RTC 1.2.14, the EPA does not believe that requiring aftertreatment for emer gency engines based on their limited participation in emergency DR is appr opriate under the CAA. Further, section 112(d) of the CAA is focused on mandating the ap propriate technology for a particul ar category or subcategory of source. The EPA has not used section 112(d) of the CAA to prevent a source from operating because another wholly separate type of source might be available. The question for the EPA in promulgating this regulation was whether emergency DR was within the type of usage that should be permitted for the preexisting category of emergency engine. Given the connection betw een emergency DR and prevention of blackouts, the EPA found that such operation was consistent with use of emergency engines. The EPA has further reiterated its previo us finding that aftertreatment is not appropriate for such engines, although the EPA for the first time has required ULSD fuel for such engines. The issues related management of energy markets and competition betw een various forms of el ectric generation are far afield from EPA’s responsibilities fo r setting standards under the CAA.51 Market Capacity and Reliability of the Grid
1.2.5 Comment : A few commenters, including comme nters 1011, 1077, 1099, 1107 and 1122 disagreed with the proposed rule’s claim that increasing the availability of small diesel generators to operate for emergency DR would contri bute to increased grid reliability, pr event grid failure or decrease the likeliness of blackouts. Instead, the commenter (1077) believes the rule may have the opposite effect. In fact, small diesel generators may not be as reliable compared to other generati on sources as they may not be available throughout the year, the commenter (1077) said. A number of commenters said that diesel generators are just another resource available in a mix of generating resources available to grid operators. Commenter 1134, who c ited the report by Analysis Group 16 said in its comment letter that the report also indicated that participation of RICE-b acked units in DR programs may reduce overall system reliability, as the deployment of more efficient, reliabl e resources offering enhanced reliability services is suppressed by the capacity markets. Two commenters (994 and 1123) believe that the EPA’s proposed rule changes may have been developed with the misunderstanding that the electric generation industry may have insufficient capacity to meet the energy demand on high el ectric demand days (HEDD), but ne ither the EPA nor those entities supporting the proposed amendments to the RICE NESHAP have provided s upport for this position. Commenter 994 described the current system of ho w competitive wholesale markets are managed and how market distortions, such as an out-of-market subsidy, has the effect of providing non-market revenues to a market participant. The commenter (994) said that the EPA’s proposal would subsidize uncontrolled RICE generators who participate as a capacity resource in PJM’s competitive markets. According to the commenter (994), the proposed rule is equivalent to an environmental pollution subsidy, which will result in the growth of uncontro lled RICE generation to th e detriment of cleaner, environmentally controlled generation units. The co mmenter (994) concluded that, over time, these
market forces will result in the deactivation or ear ly retirement of environmentally cleaner peak-load generation as well as preventing the entrance of cl eaner, higher capacity resources in the market to replace environmentally-controlled base and immediate- load generation that is ultimately retired. The commenter (994) stated that the last several year s of capacity auctions demonstrate that the DR, including limited DR that uses unc ontrolled RICE units, is the fast ed growing component of PJM’s capacity portfolio and provided several examples. A ccording to the commenter (994), while PJM cannot

16 See report titled “Reliability and Emission Impacts of Sta tionary Engine-Backed DR in Regional Power Markets” included as an attachment to comments submitted August 9, 2012 by Ca lpine Corporation on the proposed rule (EPA-HQ-OAR-2008- 0708-1134).52 definitely indicate how much of the limited DR is load-shifting to uncontrolled RICE units and how much is actual demand reduction, it is believed that between 25 percent and 35 percent of the total participation in the limited DR pr ogram meets its obligations to th e program through load shifting. The commenter (994) concluded that th e last Base Residual Auction (BRA ) results essentially procured a 2,300 to 3,240 MW virtual uncontrolled RICE power plant that would be allowed to operate uncontrolled for up to 100 hrs/yr for economic gain. Th e commenter (994) added that as the competitive scales are tipped in favor of uncontrolled RICE units , they will continue to underbid other generation sources, forcing the premature retirement of e nvironmentally controlled generation sources and preventing higher capacity, cleaner generation from clearing the capacity market. The commenter (994)
cited a Northeast States for Coordinated Air Us e Management (NESCAUM) report, “Air Quality, Electricity, and Back-up Stationary Diesel Engines in the Northeast” that reached similar conclusions. Commenter 1124 agreed that the proposed exemp tion for RICE generators participating in demand side programs means displ acing capacity and energy from clean er alternatives. The commenter (1124) explained that RICE genera tors would typically be called to operate as DR by the organized wholesale market during high load hours, generally during hot days. The commenter (1124) said that base load units, typically coal and nuclear, opera te year round, on and off peak. According to the commenter (1124), RICE generators are not competit ive with coal when economically dispatched, and RICE generators will not displace coal-fired ge nerating units in energy markets. However, the commenter (1124) said, RICE generators may disp lace other resources that generally operate only during peak hours such as natural gas-fired comb ustion turbines and cons ervation-based DR. The commenter (1124) said that these are the resources that would likely be displaced both in the energy market and in the capacity market by an increase in RICE generator-based DR. The commenter (1124) said that affording such uses a special benefit th rough an exception to pollution rules would simply mean an increase in pollution compared to the alternative, with no positive benefits on markets. The commenter (1124) said that a run hour exemption is not justified on market or reliability grounds for RICE generators that par ticipate in DR programs. Another commenter (994) said that arguments that environmental exemptions are needed to meet the reliability needs of the bulk power system de monstrate a lack of und erstanding regarding how generation capacity is procured within the PJM balancing area, are not supported by PJM’s publicly filed comments in a related docket to this proposed rulemaking, and does not acknowledge the inherent differences in reliability between a base-load ge neration source and an “emergency” stand-alone generation source. Two commenters (994 and 1124) said that PJM operates a competitive capacity53 market that obtains the capacity needed to ensure re source adequacy using the 3-year forward reliability
auction that ensures that PJM will always procure the necessary capacity to meet estimated demand, in addition to a reserve margin. According to the co mmenter (994), in the most recent BRA, PJM noted that the auction was, “...impacted by an unprecedente d amount of planned gene ration retirements (more than 14,000 MW) driven largely by environmental re gulations.” The commenter (994) added that despite this, “A record number of new generation re sources were procured comp ared to any single RPM auction.” The commenter (994) conc luded that if PJM can procure th e necessary capacity to overcome the “unprecedented” retirements of 14,000 MW due to environmental regulations, clearly it can procure capacity to replace uncontrolled RICE units due to environmental regulations. The commenter (994) said that in contrast to the impacts of the MATS rule on the bulk power system, as noted in comments provided by PJM on that rule, PJM has never commented that uncontrolled RICE units are necessary for reliable ope ration of the bulk power sy stem, only that to be useful to PJM in emergency conditions over a year th at a minimum number of 60 hours of availability is essential. The commenter (994) added that, while em ergency generators may pr ovide a valuable service
when the local electric distribution system fails, their value to the bul k electric system is necessarily minimized due to their limitations, rendering them less , not more valuable to the reliable production of electricity for wholesale power markets. The commenter (994) noted that PJM will become more reliant,

not less reliant on lower capacity, higher emitting “emer gency” generation sources, which invariably increases the probability of power supply emergencie s and the negative outcomes that accompany such emergencies, including power shortages. One commenter (1090) agreed the electric system reliability is maintained by ongoing, long-term planning processes aimed at securi ng enough electricity supply (or capacity - including DR as a category of supply) to meet future project ed demand, plus additional margins of excess supply in case unexpected
events arise like extreme weather or a power plant unexpectedly goi ng offline. The commenter (1090) added that even assuming that certain units could not meet the EPA’s standard s that require controls, and therefore could not offer emergenc y DR services, the data indicates that system reliability will not suffer. The commenter (1090) described an example in PJM, where 14,026 MW of capacity (including generation, energy efficiency and DR resources ) did not clear the 2015-2016 BRA. The commenter (1090) said that this means that there would be pl enty of resources available if the entire 9,247 MW of cleared limited DR product in the 2015-2016 auction had not been available. The commenter (1090) added that the 2015-2016 BRA cleared enough capacity resources (including DR) to create a 20.254 percent reserve margin, which is significantly greater than the 15.4 percent margin recommended through PJM’s analysis. The commenter (1090) said that the compliance ob ligations from the 2010 final rule that limited emergency RICE units to 15 hours of participation in DR programs will come into effect by the end of 2013. Therefore, according to the commenter (1090), th e increase in DR and the limited product in the PJM market should have impacted BRA results (which ar e bid in to the market 3-years in advance of the time they will operate) in all three of th e forward auctions in 2013-2014, 2014-2015 and 2015-2016. However, the commenter (1090) said that in spite of the 15-hour limits that so me claim will harm DR resources, there was significant growth of DR and limited DR in these full compliance years, which means either DR resources are plentiful in spite of the 15-hour limits or that CSP were prepared to economically comply with the final rule. The commenter (1090) believes the proposed exemp tions will result in greater penetration of uncontrolled RICE into DR programs, and this increase in availability of dirty engines will result in higher probability of their utilizati on and potential concerns with the r un-time limitations of these dirty resources (related to their uncontro lled, dangerous emissions). The commenter (1090) said that the EPA should not make special accommodations to facilitate participation of these resources in DR market,
because the EPA is otherwise crea ting or exacerbating market failure s by promoting the externalization
of costs associated with increasi ng operation of dirty RICE units. The commenter (1090) said that this “dirty energy subsidy” will resu lt in increased use of DR from uncontrolled RICE and foregone opportunities for actual curtailment, cleaner DR resources, and construc tion of new, cleaner generation builds of both distributed and utility scale genera tion. The commenter (1090) a dded that this subsidy eliminates the competitive adva ntage renewable energy generation and energy efficiency resources should receive since, as zero-pollution resources, theyare not required to invest in pollution controls. Another commenter (994) said that when any market participant receives out-of-market subsidization
and can use those subsidies to lower its bid into th e market, the effect on the capacity market is that capacity prices are artificially and negatively su ppressed. According to the commenter (994), the corresponding result is that the appropriate market pri ce signals are distorted, and the benefits of a fully functioning capacity market to deve lop and maintain a reliable supply of electricity are threatened, which unfairly harms both current non-subsidized ma rket participants as well as prospective market participants. One commenter (994) said that the proposed amendments to RICE NESHAP represent a significant economic opportunity for owners and operators of uncontrolled RICE units in the55 competitive wholesale electric mark ets. The commenter (994) said that the primary reasons that DR providers sued the EPA when it initially proposed a 15-hour limit was for th e purposes of preserving their ability to qualify for capacity payments from P JM, which requires that res ources must be available for a minimum of 60 hours per summer period in order to qualify as a capacity resource and be eligible for capacity payments. The commenter (994) cite d information from PJM’s July, 2012 Load Response Activity Report 17 that confirms that capacity payments are th e primary revenue source for DR products and that revenues derived from PJM’s other competit ive markets, including the energy and ancillary services markets, were de minimis by comparis on to revenues earned from the capacity market. According to the commenter (994), in the aggr egate, capacity payments represent on average approximately 81 percent of the total revenues for DR providers in 2008, 98 percent in 2009, 96 percent in 2010, 95 percent in 2011, and 98 percent through Ju ly 11, 2012. The commenter (994) stated that owners and operators of uncontrolle d RICE units have a clear and ve sted interest in materially preserving these revenues because they essentially are the entire revenue opportunity for these units. According to the commenter (994), the only method in which the full value of the revenues can be preserved is through the exemption that these mark et participants sought th rough litigati on with the EPA, which has now resulted in the proposed amendments to RICE NESHAP. The commenter (994) said that according to an analysis from NESCAUM of PJM capacity auction results and clearing price results, “...in the PJM auctions for MAAC [M id-Atlantic 19 region], from 2012-2016, a backup generator would earn over $250,000 per MW, in addition to energy payments if called to operate.” The commenter (994) stated that the profitability of participating as a capacity resource is not guaranteed and that all market participants are at times influenced by additional regulatory compliance costs which necessitate a capital outlay. The commenter (994) said that uncontrolled RICE units should be treated no differently, especially because the exem ption they seek from the EPA is to allow them to

earn additional revenue through the capacity market as a capac ity resource, not simply to be operated for self-supply emergency purposes only. The comment er (994) concluded that the EPA should reject the fallacy that uncontrolled RICE units should not have to meet environmental standards precisely because these units have been repurposed for eco nomic gain, and that the proposed amendments to RICE NESHAP are in support of th at economic gain. The commenter ( 994) said that the EPA has been misinformed by the petitioners and others about em ergency DR programs. The commenter (994) said that, per FERC, a DR program does not include the operation of BTM generators as this practice does

17 http://www.pjm.com/~/medi a/markets-ops/dsr/2012-dsr-a ctivity-report-20120712.ashx56 not “induce lower electricity use.” Instead, the commenter (994) said that a program that encourages the operation of BTM generators during “t imes of high wholesale market pr ices or when system reliability is jeopardized” is more appropria tely identified as a “load manage ment technique.” The commenter (994) concluded that because neither the EPA nor the DR petitioners have provided support that the electric generation industry may have insufficient capacity to meet the energy demand on HEDD, the commenter (994) asked the EPA to eliminate the emergency DR program exemption included in its definition of emergency sta tionary RICE except for emergency stati onary RICE units that provide power to the grid. Commenter 1124 added that because DSR programs are usually associated with conservation and efficiency, the nature of RICE generators’ participation in DS R programs can be misunderstood. In fact, the commenter (1124) said, customers participat ing in DR programs based on RICE generators use these BTM generators to offset the demand at their location during peak hours, so that the metered demand (load) appears to be reduced. The commenter (1124) said that customer s do not actually use less power when they rely on these engines, rather, th ey substitute BTM diesel engines for the MW they would otherwise need to buy from the wholesale pow er grid. The commenter (1124) said that when customers use energy from diesel engines with no environmenta l controls, those customers use less efficient and more polluting sources of energy than they would if they purchased from the wholesale power grid. Comment 961 does not believe that placing operati onal restrictions on uncontrolled engines will negatively impact grid reliability, pa rticularly in competitive wholesal e electricity market regions with functioning capacity markets. The commenter (961) is strongly against the proposal and the allowance currently in the rule (15 hrs/yr) should be remove d. Many commenters stated th at the claims made by different interest groups, including companies offering electricity DR services are questionable and that diesel emergency generators are not necessary to ensure electric reliability. There are no reliability concerns, commenter 1123 said, and th e concerns the EPA has stated in the proposed rule do not justify the exemptions proposed. According to commenter 1123, diesel backup generators do not play a special role in preventing blackouts or in otherwise mainta ining the reliability of the grid. The commenter (1123) emphasized that it has no issues with backup gene rators being used for true emergencies, in the case of hospital or blood bank that rely on their ow n backup unit during a power outage. However, when it comes to the electrical grid, P JM for instance may in the case of an emergency 1) call upon generation
that is restricted for reasons othe r than cost, 2) recall sales to other systems, 3) purchase emergency engine from the region or from surrounding areas, or 4) implement load relief measures, and according57 to the commenter (1123), other ISO and RTO have simi lar procedures in the event of an emergency. For these reasons the commenter (1123) argued, backup gene rators are not needed for reliability purposes. One commenter (961) reiterated th e EPA’s rationale stated in the proposed rule, which was as follows: (1) the current allotment for runtime was in sufficient to meet tari ff requirements imposed by ISO/RTO DR programs, and therefore needs to be e xpanded to ensure reliability; and (2) the temporary limited allowance for peak shaving and other type s of non-emergency use as part of a financial arrangement for existing stationary emergency engines at area sources of HAP would give sources an additional resource for maintaining reliability while facilities are coming into compliance with EPA’s MATS. The commenter (961) stated that it disagr ees that this rationale justifies the proposed amendments. In the commenter’s (961) opinion, the pr oposed action is not sound for reliability reasons and the commenter (961) further find s fault with the policy implications associated with this proposal.
Commenter 1134 concurred with this assessment indicati ng in its comments that the Agency’s reliability concern regarding emergency DR is misplaced. In the commenter 961’s opinion, the claim that uncontrolled BTM dies el generation as a type of DR capacity resource is required as a last safeguar d prior to a brownout or load shedding is a gross mischaracterization. Two commenters (961 and 1134) a sserted that the ability of uncontrolled diesel backup generators to participate in competitive ener gy markets is not necessary for electric reliability. One commenter (961) referenced co mments from the Independent Market Monitor for PJM made on the settlement agreement and in testimony on this proposed rule that demand side resources are not required for reliability. The commenter (961) said that it is not correct of the EPA to arrive at the decision to less environmental standards for BTM generation in order to ensure that regional reliability standards are maintained, especially in those areas of the country that have establis hed organized wholesale electricity markets with distinct, market-based capacity markets. According to th e commenter (961), there is data that indicate that with sufficient advance notice, ma rket structures for capac ity procurement are capable of and will respond to ensure adequate capacity while satisfying environmental requirements. Commenter 961 included a table of generation, DR and energy efficiency resources offered and cleared from 2008/2009 to 2015/2016 for PJM, which shows a surplus, or uncleared, capacity resources in all those years since the beginning of the RPM constr uct. Commenter 1134 specifically stated in its
comments that in PJM’s 2012 base residual auct ion for 2015-2016 close to 20,000 MW of DR was bid into auction and approximately 14,800 MW of DR cleared. The comme nter (1134) noted that it is
unclear how much of the cleared DR amount consiste d of stationary engines and how much of it would qualify as emergency engines.58 The commenter (961) also pointed to the ISO-NE market and illustrated in their comments (961) that capacity auctions have also consistently yi elded surplus capacity offers. Also, the New York Independent System Operator (NYISO) projects re serve margins between 31.2 and 21.9 percent between the years 2012 and 2022, well above the target reserve margin of 16 percent, according to commenter 961. Based on the data presented by the commenter (961), economically-based capacity markets will ensure regional capacity resource adequacy in response to changing market conditions and environmental rules. Likewise, commenter 1134 stat ed that NERC forecasts that overall anticipated reserve margins will remain above NERC’s 15 per cent reference level through 2012, with only Electric Reliability Council of Texas (ERCOT) presenting a si gnificant reserve margin deficiency during the forecasting period. One commenter (1090) said that uncontrolled RICE units are not the only resources available to address reliability concerns; ther e are many cleaner, cost effective DR resources available and many markets regularly rely on these services without in cident. For example, the commenter (1090) said, in the 2015-2016 BRA, PJM had plenty of excess reserv e margin (20.2 percent total reserve margin) capacity above the minimum (15.4 per cent) required to ensure reliab ility. The commenter (1090) added that PJM has enough capacity resources bid into the market that if uncontrolled RICE units (assumed to be offered through the limited DR product) were not available, the system could still clear enough resources and maintain excess reserve capacity marg in. The argument to overlook the emissions caused by the increased use of dirty uncontrolled RICE units as a way to avoid even greater emissions in blackout situations is fundamentally flawed because it assumes use of dirty RICE is the only option to avoid blackouts, commenter 1090 said. The commente r (1090) said that uncontrolled RICE units are actually inferior resources to the grid because of th eir associated operation limitations, which are related to unit emissions. In contrast, the commenter (1090) said, with proper emission controls, they would become more valuable to operation of the grid because the limitations on run time s would be eliminated. Commenter 1094 stated that allowing a new, significant exemption for BTM units, which allegedly operate as traditional DR resources, but in actuality, direc tly compete with other generation resources, both existing and proposed, in the same capacity market, amounts to a preferential treatment not otherwise recognized by Federal or state rules or law. Comment er 1094 strongly disagrees with recent assertions put forward by commenter 1142 that “DR will not compete against generation in the PJM capacity markets and therefore will not be reducing the price for generation capacity.” The commenter (1094) stated that to allege that DR will not compete with other generation in the PJM capacity markets shows a clear misunderstanding of ho w markets operate within PJM. According to59 commenter (1094), although PJM curren tly allows limited call (60 hours per summer) resources to meet up to 4.8 percent of PJM's minimum re liability obligation for capacity resources, this amount is not a carve out as commenter 1142 implies. Rather, commenter 1094 asserte d, PJM strives to meet its RPM capacity requirements at the lowest possible cost from offers by suppliers of all acceptable resource types, generating plants availabl e all year, unlimited DR available all year, summer-only DR available any time during the months of June through Septem ber and limited (60 hours per summer) DR. Finally, according to commenter (1094), not only are these BTM resources directly competing with traditional generation resources in the organized markets, they are doing so at a distinct advantage, one created solely by the lax requirements of the proposed rule . Commenter 1094 stated that the 100-hr exemption carries with it significant policy, e nvironmental and practical implicati ons, including the fact that such an exemption amounts to an unjustifie d preference for BTM generators th at is not equally available for generating units located “in front of the meter,” whic h are obligated to meet all Federal and state air regulations. The commenter (1094) stated that BTM-related DR is not (or should not be) an “emergency” resource in the PJM markets. The commenter ( 1094) stated that by loos ely defining “emergency conditions,” as well as exempting diesel-fired BTM units from up to 100-hours of operations, the Agency, in effect, will be encouraging diesel-fired units to more actively participate in the PJM wholesale capacity market in a discriminatory ma nner, under the auspices of “emergency” providers. The commenter (1094) believes that the exemption for BTM resources should be eliminated in its entirety, and that uncontrolled BTM res ources could participate in this program without the need for an expanded exemption. According to the commenter, th e Independent Market M onitor for PJM does not
believe that these units are n eeded for reliability purposes. Similar opinions were provided by commenter 1134 who indicated that in organized capacity markets, the market will just acqui re other resources instead of BTM stationary engines that have not
had to internalize the cost of emission controls. It is possible that this may l ead to the need to obtain somewhat higher cost resources commenter 1134 said, but that is due only to the fact that the more expensive resources have not been given a free pass on emissions control requirements, in the commenter’s (1134) opinion. Actually, increasing relia nce upon DR resources to meet regional capacity needs, in lieu of the other electric ity supply resources that would likelyclear in the competitive capacity market, may, according to commenter 1134, in fact impair system reliability, as those other supply resources will operate more reliably than the exis ting marginal resources they would displace and provide many reliability-related services that limit ed DR resources do not. So again the commenter60 (1134) stressed, there is no reliability-related rationale for the EPA to place such heavy thumb of the scale in favor of diesel engine DR and exempt emergency engine s from meeting emission standards necessitating the use of emissions controls when othe r sources of electricity supply against which they are competing must install emi ssion controls and price the asso ciated costs into their bids.

Response : Decisions about what units to allow to be bid into the capacity market and relied on for reliability are not under the EPA’s pu rview and should be left to the entities that are responsible for maintaining the reliability of the electric grid. The commenter compla ins that use of emergency DR is undercutting other types of energy appears to sugges t that the EPA should in effect mandate higher prices for this electricity and re gulate based on management of comp etition, rather than the technologybased criteria in the statute. The EPA is not maki ng decisions about which units should be allowed to run for emergency DR or promoting or subsidizing the use of one type of generation versus another. Nor is the EPA justifying its regulation primarily on the reliability needs of the bulk power system. The EPA is simply specifying that use for emergency DR operation is a legitim ate function for the subcategory of stationary emergency engines. As discussed in comme nt 1.2.3, the EPA believes th at it has appropriately set standards for stationary emergency engines ba sed on the requirements and legal authorities under
section 112 of the CAA. The commenters have no t provided convincing evidence to support the conclusion that the use of stationary RICE would supplant cleaner generation and there is evidence to the contrary in the record. As discussed above, there are several types of electricity generation that the EPA does not regulate. The commenter s also did not provide any evidence that owners and operators engaged in emergency DR are not also taking other meas ures to curtail load, such as dimming lights, in addition to operation of their engine(s). The comment ers have also provided no evidence that the final rule will lead to greater penetra tion of stationary RICE in DR pr ograms. In fact, the RICE NESHAP requirements that take effect in 2013 will, for the fi rst time, limit the operation of these engines for DR.
The final rule does take measures to control emissions from these engines through the use of ULSD. Commenters point to data re garding previous capacity auctions that occurred prior to the implementation of these regulations. To the extent emergency engines participated in economic DR, or in unlimited hours of emergency DR, th ey will in the future be limited, or will have to put on controls. This may have been factored into forward auc tions. The commenters have not shown that use of emergency engines for the limited purpose of emerge ncy DR for limited hours w ill or can supplant base load generators that are available for general use. The EPA agrees that emergency generators are quite different in use and function from base load ge neration and commenters do not provide any convincing61 argument that this rule will displ ace base load, or even peak load, generation. This type of generation simply is not built to operate onl y when EEA Level 2 emergencies ar e called or voltage fluctuates 5 percent or more. While generators may only be “jus t another resource,” it does create an additional choice for grid operators and one that may be well suited for quick low power operation during emergency conditions. In a letter to the Agency 18 , EnerNOC (commenter 1142) cited to a study that showed benefits associated with having quick-sta rt capacity such as emergency backup generators available to respond to emergency situations and that such units being readily available on quick notice is preferred. The argument that sour ces that emit pollution and are paid for their performance should not be allowed to operate can be applied to many types of activities, including the use of other types of power plants that are competing with emergency engines and would stand to gain financially if emergency engines were prevented from competing with them. It is not coincidental, the EPA believes, that many of the commenters are indeed market co mpetitors of the companies that are promoting emergency DR. The fact that the IS O can use another source of power, or that a source is paid to operate, is no reason to prevent one t ype of power from being used in a particular situati on; nor does the availability of other sources of po wer mean that the limited situati ons for which emergency engines are being permitted are not emergency situations. As discussed in RTC 1.2.2, these types of situations are emergency situations, and the fact th at there may be more than one method of dealing with the situation does not make it less of an emergency. Again, that t ype of argument can be used against any type of generation, as long as another type of generation, or de mand curtailment, is availabl e. It is this type of comment, rather than EPA’s actions , that seeks to pick winners and losers in energy markets. The commenters’ argument are particularly suspect when they discuss the possibility of newer, cleaner generation, as, again, this type of argument, taken to its extreme, would require the EPA to ban the use of all types of energy generation fo r a particular purpose as long as th e EPA can think of one type of source, even one that is not even in construction, or one type of demand curtailment, even one not currently in use, that could possibly be used instead of the source being regulated. This is not what the CAA requires of the EPA. The question for the EPA is what type of controls are appropriate under the statute for emergency engines in thes e restricted situations, and the availability of other options is not sufficient to require further emission controls. As discussed in RTC 1.2.14, EPA does not believe requiring aftertreatment controls is appropriate for that use.

18 Letter from Richard Counihan, EnerNOC to Michael Horowitz, EPA. EnerNOC et al Review of Comments Filed on Proposed Settlement Agreement. Februa ry 29, 2012. EPA-HQ-OAR-2008-0708-0839.62 Moreover, in areas that do not have as many c hoices regarding generation, particularly in more rural areas, the choice of an emergency generator may be the only choice. As discussed in section 1.1,
numerous commenters in areas outside of the PJM area have commented that allowing emergency generators to operate during near-emergency conditi ons may be the most reliable, or possibly the only, way to prevent blackouts in these areas. In response to commenter 1134’s comment rega rding the point made in the Analysis Group report, 19 that participation of RICE-backed units in DR programs may reduce overall system reliability, as the deployment of more efficient, reliable res ources offering enhanced reliability services is suppressed by the capacity markets, the questions re garding whether emergency DR are used for short periods of time in emergency situations are likely not the most significant questions relevant to whether
new resources are constructed. The EPA’s understanding is th at these “more efficient resources” are not being called for in capacity markets because they are marginally more expensive to run, and eliminating emergency engines will tend to incr ease electricity costs. The EPA be lieves that other government and private entities are best able to determine the extent to which these “more efficient resources” are needed for the purposes of reliability. Regarding the comment that emergency engines do not need to contract to operate for any certain amount of hours to participate in emergency DR programs, the EPA notes that other comments indicate that there is a strong preference by ISO to have a cert ain amount of guaranteed hours of availability to ensure that the source can be relie d upon in the requisite circumstances. In any case, the EPA has allowed emergency engines up to 100 hours of possible usage for em ergency DR (combined with other permitted usage like test ing and maintenance) not because th e EPA believes that it is required from ISO, but because the EPA believes that emerge ncy DR is appropriate use for emergency engines and that GACT for these emergency engines involved in emergency DR, given limitations on use that the EPA has required and the other relevant factor s for GACT, should not re quire aftertreatment.

1.2.6 Comment : One commenter (1011) said that the Agency should work with FERC, the RTO and ISO to ensure grid reliability does not depend on st ationary RICE as opposed to finalizing the proposed rule. The commenter (1011) said that the Agency s hould work with these groups to develop long-term alternatives of energy efficiency, renewabl e generation and cleaner energy production.

19 See report titled “Reliability and Emission Impacts of Sta tionary Engine-Backed DR in Regional Power Markets” included as an attachment to comments submitted August 9, 2012 by Ca lpine Corporation on the proposed rule (EPA-HQ-OAR-2008- 0708-1134).63 Response : The purpose of this rulemaking is to address HAP emissions from stat ionary engines and to minimize such pollutants within the Ag ency’s authority under the CAA. It is not within the scope of this rulemaking to determine which resources are used for gr id reliability, nor is it the responsibility of the EPA to decide what type of power is used to a ddress emergency situations. Deciding on what type of power should be used for grid relia bility is within the hands of the power authorities and not the Agency’s mission under the CAA.

Basis for Setting the 100-hour Cap
1.2.7 Comment : One commenter (1123) made the point that ev en in the event that the EPA was correct that the 15 hrs/yr allowance that is currently allowe d is not sufficient, the Agency has failed to provide adequate justification as to why 100 hrs/yr would be appropriate on a nationwide basis. For example, the commenter (1123) said, the EPA refers to ERCOT’ s program supposedly requiring 24 hrs/yr for backup generator participation, but does not explain why a limit of almost five times that amount is needed in that region. One commenter (955) said that the proposal appear s to artificially set a level of allowable DR run hours for the sole purpose of allowing such engine s to participate in the financial rewards of the capacity and peak shaving markets. According to the commenter (955), if the goal is to allow a certain leeway of run time to provide fo r true emergency, grid-threateni ng conditions, the allowable run hours should be set at that level. The commenter (955) cited comments by the PJM Market Monitor that conclude that the key element of DR is that the e nd-use customer reduces its use of electricity and does not simply transfer the same demand by going off the grid by turning on another generator, resulting in less efficiency and a less clean source of energy gene ration than is available in the wholesale generation market. The commenter (955) described the inverse re lationship between allowable run times for on-site engines and grid reliability, because the use of on -site generators artificially suppresses wholesale capacity market prices as well as true DR from the market. The commenter (955) concluded that undermining the RPM capacity mark et undermines the reliability of the grid and results in the generation of air emissions due to the lack of emissions controls on the on-site generators. The commenter (955) did not support eith er the original 15-hour run time or the proposed 100-hour run time and stated that backup generators should be treated as generating resources instead of demand resources. The commenter (955) suggested that the EPA consult with the RTO regarding the appropriate base level of hours necessary to accommodate real emergency DR needs.64 Another commenter (1124) pointed out that the assumption that an additional allowance of run time is necessary to permit par ticipation in RTO DR programs is in correct. The commenter (1123) said that this statement applies only to a resource atte mpting to participate in the market on a standalone basis and that standalone participation is not the only way to participate or even the typical way to participate. Instead, the commenter (1124) said, DR participation in RTO capacity markets usually occurs through a portfolio of assets aggregated and managed by a CSP. The commenter (1124) added that the run time specified by the EPA would affect the number of resources needed by CSP to create each unit of Limited DR, and a shor ter run time would appropriately af fect the cost of providing DR
from RICE resources. Commenter 1123 pointed to DR programs of seve ral ISO and RTO, including PJM, ISO-NE, ERCOT, Hawaii, and said that the EPA has provided erroneous assumptions justifying the need for 100 hrs/yr and the participation rule s for these emergency DR programs . The commenter (1123) believes the EPA has confused the requirements for backup generators to participate in emergency DR programs with the requirements related to the sale of othe r, non-emergency services and products. For example, the 60-hour requirement that the EPA refers to is for PJM’s capacity markets, but there is no such requirement for PJM’s emergency DR program. Therefore, the commenter (1123) said that there is no need to provide the 100 hrs/yr for emergency engi nes to provide emergency DR to PJM. Commenter 1123 said that it appears the EPA has incorrectly in terpreted the emergency DR programs of other ISO
and RTO also.

Response : The EPA determined that a limit of 100 hour s for maintenance and te sting and operation for emergency DR and voltage deviatio ns was appropriate. In setting the limit, the EPA had to consider operation in all areas of the country, not just PJM. The EPA considered the needs of emergency DR programs, as well as other engines used to provide power to maintain reliability of the grid in emergency situations, such as those owned by municipal powe r systems and rural elect ric cooperatives. Comments from APPA concurred with the Agency proposal to increase the allowance to 100 hrs/yr, who indicated that this amount will satisfy the needs of RTO, ISO, plus time needed to respond to emergencies affecting public power utilities. AP PA states that “[b]ecause these RI CE units are run for local voltage support, and in response to severe weather emergencie s, it is extremely challe nging to accurately predict how long or when a RICE unit will be run... Not knowi ng whether cost recovery could ever happen will lead many small governmental agencies to decide to s hut down these units—the very same units that are needed for local distribution syst em reliability.” The National Rura l Electric Cooperative Association65 (NRECA) (commenter 1056 in th is document) and a number of individual NRECA members who commented on the proposed amendments also indicated that 100 hrs/yr was appropriate to maximize the ability of emergency engines to support DR. So me commenters representing smaller utilities who participate in emergency load response program s, including commenters 898 and 927, also indicated that without a 100 hrs/yr a llowance under the rule to be allowed to be used for emergency DR, the city
would have to withdraw from the program. Therefore, the EPA believe s 100 hrs/yr is an appropriate amount, backed by numerous commenter s. The EPA notes that the usag e allowance for emergency DR and voltage fluctuations does not increase the total number of hours previously permitted for use outside of blackout or flood conditions, but merely allows the use of engine s for emergency DR and voltage protection to the pre-existing 100 hou r allowance for testing and maintenance. The EPA continues to believe that the decisions made regarding GACT for emergency engines subject to such limitations are appropriate. Local regulators can have reduced requi rements, but the EPA needs to regulate for the whole country under this rulemaking.

Alternative Rule Suggestions 1.2.8 Comment : Commenter (1140) urged the EPA to require the use of UL SD in emergency generators.

Response : The EPA contacted the comment er and asked for information regarding the reduction in HAP emissions from the engines that could occur from switching to ULSD. The commenter provided additional data to the EPA, which can be found in the rulemaking docket at EPA-HQ-OAR-2008-0708- 1459. The data provided by the commenter showed th at the use of ULSD will significantly reduce emissions of air toxics, including me tallic HAP (e.g., nickel, zinc, lead ) and benzene. The use of ULSD
will also reduce emissions of PM and SO 2 . As discussed in the memo titled “RICE NESHAP
Reconsideration Final Amendments - Cost and Environmental Impacts, ” the EPA determined that the
use of ULSD is cost effective sin ce the minimal increased cost for UL SD is balanced out by the reduced engine maintenance that is expected from using this fuel. As a result, the final RICE NESHAP amendments include a requirement th at stationary emergency engines that are used or contractually obligated to be available for more than 15 hrs/yr for emergency DR, or res ponding to voltage/frequency deviations, or used for local reliabi lity needs, use ULSD if the engine is larger than 100 HP. Owners and operators must begin meeting this ULSD fuel re quirement on January 1, 2015, except that any existing diesel fuel purchased (or otherwis e obtained) prior to January 1, 2015, may be used until depleted. The fuel requirement begins on January 1, 2015, in order to give affected sources a ppropriate lead time to institute these new requirements and make any physical adjustments to engines and other facilities like66 tanks or containment structures, as well as any needed adjustment s to contracts and other business activities, that may be necessitate d by these new requirements. The EPA finds it appropriate to limit the ULSD fuel requirement to engine s above 100 HP. In previous rules, the EPA has exempted engines below 100 HP from more stringent requirements than th eir large engine counterparts. Therefore, it is inappropriate to promulgate more stringent requirements at this time for smaller engines, and the EPA also does not believe that engines less than 100 HP would be part of emer gency DR programs. Seeing that the EPA has not promulgated emission reductions for these small engines in the past, the Agency
believes it would be unwarranted to do so here without notice and co mment. Furthermore, regarding the cutoff at 15 hrs/yr, engines that operated for less than this amount per year, we re similarly not part of
this rule and the EPA does not believe an increased regulation for these engines is within the scope of
this rule. See also RTC 10.5.1.

1.2.9 Comment : One commenter (1012) opposed the proposal to allow 100 hrs/yr for emergency DR operation and urged the EPA to instead allow emer gency engines to participate in emergency DR programs for up to 200 hrs/yr (150 hrs/yr for DR and 50 hrs/yr for maintenance) under the following
conditions:
1. The stationary emergency engines is equipped w ith a diesel particulate filter (DPF), and
2. The DR hours are only used during a Stage 2 or Stage 3 alert, or during a transmission

emergency. These conditions the commenter (1012) argued would en sure stability of California’s power grid and alignment with state and Federal programs. Comm enter 1012 suggested that if stationary engines participating in DR programs do not meet the above c onditions that the engines would be restricted to 100 hrs/yr. The commenter (1012) further suggested th at this provision could be contingent upon a state or local rule requiring the strict requirements listed in the above two conditions in a similar manner that is being proposed for Tier 1 and Tier 2 engines at area sources that must be replaced by June 1, 2018. The commenter (1012) talked about how the Ca lifornia Airborne Toxic Control Measure (ATCM) for stationary diesel e ngines first implemented in 2004 en sures continued protection of the environment and meets the goal of the ATCM while allowing emergency engines to be used in interruptible programs. According to the commenter (1012), the ATCM allows emergency engines to participate in interruptible service contracts (ISC) for up to 150 hrs/yr given that the engines meet stringent emission standards. Unde r the ATCM, the commenter (1012) said, an ISC is defined as a contractual agreement where a u tility distribution company provi des lower energy costs to a non-67 residential customer in exchange for the ability to reduce or interr upt the customer’s electric supply during Stage 2 and Stage 3 alerts, or during a tr ansmission emergency. The commenter (1012) pointed out that under the ATCM, emergency engines cannot be used for load shedding under non-emergency conditions for instance in response to price fluctua tions. Commenter 1012 concl uded by stating that in California, to address the health risk associated with emergency diesel engi nes participating in DR programs, the ATCM requires that emergency engi nes comply with a limit of 0.01 grams per brake HPhour (g/HP-hr) or 0.02 grams per kilowatt-hr (g/KW-h r), which is achieved by using a DPF. The use of DPF represents the best available control technology on these engines and minimizes the health risks, according commenter 1012.

Response : The commenter did not provide any inform ation to show that the requirements it recommended were appropriate as GACT for stationary emergency en gines. The commenter did not provide any information to show that a DPF that is not catalyzed would reduce emissions of HAP. The
EPA evaluated the cost of DPF on emergency diesel engines during th e rulemaking for new stationary diesel engines. The costs were determined to be ex cessive, for example, the co st per ton of PM reduced from engines between 300 and 600 HP was cl ose to $260,000 and more than $700,000 for engines
above 750 HP. 20 These estimates were based on applying contro ls at the time of manufacturing of new diesel engines and although as indicated large, woul d be much larger for existing engines that would need to be retrofitted. In fact, the EPA obtained in formation in 2009 and estimated the costs to retrofit catalyzed DPF (CDPF) would be about $5,000 annuall y, with a capital investment of close to $25,000 for a 300 HP engine. 21 Compared to the annual and capital costs associated with CDPF on a new CI engine, these costs are severa l orders of magnitude higher. 22 The cost per ton of using CDPF on existing emergency engines is further increased by the limited usage of emergency engines. In addition to the very high costs of CDPF on existing engines, the EPA is also concerned about technical issues with applying particulate filters to existing diesel engines. Several existing stationary diesel engines are not electronically controlled and PM e missions from older engines are ofte n too high for efficient operation
of the CDPF. Another issue is that in some cases engine exhaust temperatures are not high enough for

20 Memorandum from Tanya Parise, Alpha-Gamma Technologies to Jaime Pagán, EPA. Cost per Ton for NSPS for Stationary CI ICE. EPA-HQ-OAR-2005-0029-0276. May 12, 2006. 21 Memorandum from Bradley Nelson, EC/R to Melanie King, EPA. Control Costs for Existing Stationary CI RICE. January 29, 2010. EPA-HQ-OAR-2008-0708-0328. 22 Memorandum from Tanya Parise, Alpha-Gamma Technologies to Sims Roy, EPA. Control Costs for NOx Adsorbers and CDPF for CI Engines EPA-HQ-OAR-2005-0029-0008. May 31, 2005.68 filter substrate regeneration. Therefore, EPA does not agree with the commenter that the final rule should require the use of DPF.

1.2.10 Comment : One commenter (1011) urged the EPA to adopt emergency engine definition similar to that in the Ozone Transport Commission (OTC) M odel Rule and thought that the EPA should specify that testing of emergency engines for maintenance purpos es is restricted when air quality is predicted to be unhealthy. One commenter (1033) also said that the testing and maintenance of uncontrolled emergency diesel backup generators should be limited to days predicted to be good air quality days, and prohibited on bad air quality days.

Response : The EPA does not believe it would be appropriate to accep t the commenter’s suggestions, because the commenter did not provide information to show that the maintenance and testing of emergency engines contributes to bad air quality days. The EPA also believes that this type of localized measure is best implemented at the state leve l, rather than through national technology-based regulations, particularly given the HAP-cen tered purpose of section 112 of the CAA.

1.2.11 Comment : One commenter (1090) said that the EPA’s 2009 proposed rule for the RICE NESHAP did not provide for hours of operation of uncontrolled RICE in DR programs, and it was not
until the rule was released in final in 2010 did th e 15-hour waiver for emerge ncy stationary RICE to participate in DR programs appear. The commenter ( 1090) said that lack of advance notice about this specific provision prevented meaningful involvement of the public. The commenter (1090) added that the EPA is now being pressured to increase the number of hours these uncontrolled engines can participate in DR programs in order to allow th e units to meet the opera ble hours qualifying criteria required to participate in organized DR programs. The commenter (1090) said that PJM has already acknowledged that multiple RICE units with 15 hour limits could be grouped together by CSP in order to qualify for the 60 hour minimum needed to par ticipate in the DR progr ams. According to the commenter (1090), it appears that the EPA was able to establish the original 15-hour criterion without inclusive public debate and it now seeks to multiply the size of the exemption when it is not even required for its intended purpose.

Response : The EPA granted petitions for reconsider ation of the 15-hour limitation on operation for emergency DR that was finalized in the 2010 RI CE NESHAP rulemaking. Th e EPA published a notice69 on December 7, 2010, (75 FR 75937) announcing the rec onsideration and requesting public comment on the 15-hour limitation for emergency DR. The EPA s ubsequently held a pub lic meeting on January 24, 2011, following the reconsideration notice and reque st for public comment. The RICE NESHAP amendments proposed on June 7, 2012, (77 FR 33812) were based on the information provided in the public comments on the December 7, 2010, notice. The EPA also held a public hearing on this issue on July 10, 2012. Therefore, the EPA does not agree with the commenter that there was no opportunity for meaningful public involvement.

Revised Impact Analysis Needed 1.2.12 Comment : One commenter (1122) urged the Agency to perform an analysis looking at the true impacts of these engines and re-propose a rule that thoroughly considers the concerns of the environmental groups, state regul ators and other stakeholders. One commenter (1140) reemphasized the lack of da ta available on several aspects of stationary engines used for DR purposes, including the number and type of engines and the emissions from these units. Commenter 1134 agreed that there is a lack of information and transparency on the number of engines operating under DR programs, however, accord ing to the commenter (1134) based on available
information it is estimated that at least 15 percent and as much as 80 percent of the DR in PJM consists of BTM generation. 23 In the commenter’s (1134) opinion, it woul d not be surprising if the actual amount falls towards the higher end of the range. Accord ing to commenter 1134, in the current DR market, uncontrolled emergency RICE is the low-hanging fruit. These units can be bid into the capacity markets at a lower price than true DR, in the commenter’s (1134) opinion because there is no capital cost, as opposed to true DR that would include investment in technology and/or inconvenience to the customer in the form of curtailment of actual load, or other gene rating resources that have to internalize the cost of
controls and build that into the co st in their bids. The commenter (1134) also said that MISO (a regional transmission operator) estimates that up to 60 percent of its ca pability in 2010 was from BTM generation. Even though the commenter (1134) indicated that there is a lack of detailed information about DR operation, it is clear than a not-insignificant portion of the DR that is entering the PJM market consists of emergency RICE. Due to the substantial span of health risks re lated to diesel exhaust, commenter 1140 finds it particularly concerning that the EPA has not sufficien tly looked at the public h ealth impacts of softening

23 See pages 15-16 See report titled “Reliability and Emission Impacts of Stationary Engine-Backed DR in Regional Power Markets” included as an attachment to comments submitted August 9, 2012 by Calpine Corporation on the proposed rule (EPA-HQ-OAR-2008-0708-1134).70 HAP standards for stationary engi nes participating in DR program s. Commenter 1101 said that the Agency has acknowledged the serious risks of unregul ated diesel exhausts and underwent measures to
lower these risks when the RICE NESHAP was amended in 2010. The commenter (1140) strongly recommended that the EPA conduct a thorough analysis of all stationary engines to obtain basis data, including emissions and emission controls, to properly estimate the impacts of th is proposal. In addition to the unclear picture of how the proposal would impact emissions, th e commenter (1140) noted that the
EPA has not considered that addi tional uncontrolled generation woul d be built or drawn into DR programs in the future if the proposal goes final. Co mmenter 1101 said that the EPA does not even have a clear picture of how many engine s would be affected and the Agen cy claims that the amendments would have minimal impacts because emergency DR is rare. The commenter (1101) believes that it clear that the proposal would lead to an increase in em ergency DR participation a nd consequently also an increase in harmful diesel emissions. Also, the Agency has not properly demonstr ated that it is properly estimated the HAP emission impacts from the proposed emergency DR allowance, the commenter said (961), and again asserted that the Agency canno t simply exclude certain source categories or subcategories from regulations without evidence that such exclusion would still satisfy section 112 of
the CAA. Commenter 1134 agreed that exempt engines are more likely to clear in capacity auctions and be deployed in the future, and expressed that the EP A should be concerned about the impacts associated with increased use of diesel engines because of their significant harmful emissions. The commenter (1134) claimed that emission rates from diesel engi nes are many times higher than emission rates from gas-fired facilities, for instance, NO x per MW-hr of electricity generate d by pre-2006 diesel engines are up to 800 times higher than a natural gas-fired turbine operating as baseload. The commenter (1134)
cited to information from the St ate of Delaware, the State of Connecticut and NESCAUM in its comment letter. In the commenter’s (1134) opinion, th e Agency should be particularly worried by the increase of uncontrolled diesel engine use because of where these units are located. Diesel generators supply backup power for true emerge ncy situations in places like hos pitals, school and other larger institutions, and are frequently locate d in dense urban areas where there are more of these facilities, the commenter (1134) said. However, the commenter (1134) highlighted the fact that the EPA concluded
that: “it is not feasible to dete rmine whether there would be dispr oportionately high and adverse human
health or environmental effe cts on minority, low income or indigenous populations from the reconsideration of this final rule, as the EPA does not have specific information about the location of the stationary RICE affected by this rule.” It is th e commenter’s (1134) view that since the EPA does not71 have this information, the Agency should not expand on the DR provision and allow additional uncontrolled engines to participate in DR progr ams. Instead, the EPA should first conduct a comprehensive analysis to determine where these units are located and not finalize the proposed rule as
it stands until the conclusion of such an anal ysis. In commenter 1134’s opinion, unless it can be demonstrated that the cumulative impacts will not in terfere with maintenance or attainment of the National Ambient Air Quality Standards (NAAQS), the proposed rule should not be finalized. One commenter (1140) said that li ttle is known about the extent of use of backup generators in DR programs and this lack of knowledge makes it hard to assess the actual air quality and health impacts associated with the proposed rule. The lack of knowledge about emergency generators operating under DR programs was noted in a 2012 report by NESCAUM. 24 One commenter (955) noted that the participants in the DR program are not subject to any transport emissions allowance program requirements a nd stated that these “Vir tual Power Plants” should be required to play by the same rules as all othe r power plants. According to the commenter (955),
market-based solutions such as the Electric Power Generation Association (EPGA) proposed solution to address emissions accountability as pa rt of a HEDD program should be c onsidered if the EPA ultimately decides to allow these generating resources to operate for 100 hours annually. The commenter (955) enclosed a copy of the EPGA proposal in the comme nt letter. According to commenter (955), the EPA admitted to not assessing the costs and revenues associat ed with participation in emergency DR or peak shaving programs. Therefore, the commenter (955) concluded that the EPA has not adequately
considered the cost effectiveness of the installa tion of emission control e quipment, i.e., oxidation catalyst and selective catalytic re duction (SCR), on these distributed re venue generating resources. The commenter (955) said that this situation should be re-assessed using additional emissions costs and capacity market and peak shaving revenues informa tion. For instance, commenter 961 noted that the EPA did not try to accurately estimate the potentia l aggregate increase in emissions from allowing emergency DR operation for up to 100 hrs/yr. The commenter (961) also sa id that the potential emissions could be even higher because often multiple units at different facili ties could sever a single electricity grid and many of those units may simultan eously operate in an emergency DR situation. Even if the commenter (961) assumed that every single em ergency DR unit would likely only operate for a few number of hours, the collective emissions from the simultaneous operati on could be significant. Also, the commenter (961) added, mo st significant demand for electric ity generation happens during the

24 See report titled “Air Quality, Electricity, and Back-up Stationa ry Diesel Engines in the Northeast” starting on page 17 of comments submitted August 9, 2012 by NESCAUM on the proposed rule (EPA-HQ-OAR-2008-0708-1033).72 warmest months (i.e., ozone season), it is likely, according to commenter 961, that these units would operate disproportionately during the ozone season, when the adverse effect of such emissions is most severe. For these reason, the commenter (961) believes the proposal is inconsiste nt with section 112 of
the CAA.

Response : The commenters did not provide any information to show that the final rule would lead to an increase in participation in emergency DR. The EPA does not think the final rule will lead to an increase in the estimated use of emergency engines in the or iginal impacts analysis (where the Agency used 50 hrs/yr) given the low average annual need for thes e engines for emergency DR . For example, according to ISO-NE and PJM territories backup generation was dispatched for less than 30 hours during the summers of 2008, 2009 and 2010. 25 Also, there is no evidence that most emergency engines are even engaged in emergency DR, therefore there is no need to change the estimate. The commenters have not provided evidence that participation in emergency DR will increase average annual use of such engines above 50 hours. The RICE NESHAP requirements that ta ke effect in 2013 would for the first time limit operation of these engines for emerge ncy DR, so it is unclear to EPA how the RICE NESHAP will lead to an increase in participation. Commenters re commended that the EPA ga ther information on the impacts of the emissions from emer gency engines during emergency DR situations. The EPA agrees that a reporting requirement will increase the EPA’s ability to ensure that these engines are operating in compliance with the regulations and that it will pr ovide further information regarding the impacts of these engines on emissions. In response to these comments, the EPA is establishing a requirement to annually report to EPA the engine location and duration of operation for emergency DR. This information will be used by the EPA, as well as stat e and local air pollution control agencies, to assess the health impacts of the emissions from these engines and to aid the EPA in ensuring that these engines comply with the regulations. Th e final amendments require owne rs and operator s of emergency stationary RICE larger than 100 HP that operate or are contractually ob ligated to be available for more than 15 hrs/yr (up to a maximum of 100 hrs/yr) for em ergency DR to submit an annual report to the EPA documenting the dates and times that the emergenc y stationary RICE operated for emergency DR, beginning with the 2015 calendar year. The EPA is a dding this requirement beginning in January, 2015, rather than upon initial implementa tion of the NESHAP for existing en gines in May or October of 2013, to provide sources with appr opriate lead time to instit ute this new requirement.

25 Memorandum from Stacy Angel, Synapse Energy Economics, In c. to Doug Hurley, Synapse Energy Economics. Sample Revenue for a 1 MW Backup Generation Unit. June 27, 2011.73 Air Quality and Health Impacts
1.2.13 Comment : One commenter (1134) said that the Agency also failed to conduct any air quality modeling of the impacts associated with the proposed rule and believes again that the EPA does not meet the goals to protect public health in regulat ing HAP under the CAA. Th e commenter (1134) cited section 112(d)(2) of the CAA for RICE lo cated at major sources of HAP, EPA must ensure that its regulation “provide[s] an ample margin of safety to protect public health” and section 112(k)(3)(B) that
indicates that the EPA must ensure a 75 percent reduction in cancer incidence attributable to HAP emitted from specific categories of area sources, including area RICE. For these reasons, the Agency must ensure, at a minimum, that the air quality impacts will no exacerbate impacts on public health. Nonetheless, the commenter (1134) be lieves the rule as it currently reads would more than likely cause greater adverse air quality and public health impacts than the 2010 rule. Commenter 1101 believes the rule as proposed unde rmines the important public health benefits
of the whole RICE NESHAP. Comment er 1134 added that the environmental impacts of the rule are not limited to only those times during which the engine DR resource is being dispatched and use. The commenter (1134) included a report 26 in its comments that according to the commenter demonstrates the significant system-wide emissions imp acts due to participation of dies el engines emergency DR in the PJM market. Commenter 1134 argued that this further disproves the EPA’s conclusion that the proposed changes will not result in any greater emissions than previ ously estimated under the 2010 rule. One commenter (1140) believes that the increased use will likely increase ozone and PM levels and making it harder for communities to meet national air quality standards. In addition, the commenter (1140) said that the use of these generators thr eatens communities that are already disproportionately burdened by air pollution. Commenter 1076 added that the proposed rule will exacerbate air pollution on the worst days and that the EPA makes no mention of this. Commenters 1076, 1101 and 1140 discussed the health effects of diesel exhaust extensively, importantly stating that in June 2012 the International Agency for Re search on Cancer concluded that diesel exhaust causes lung cancer and was associated with an increased risk of bladder cancer. Exposure
to diesel exhaust has been associated with a number of health issues, including cardiovascular disease, ischemic heart disease and heart attack, as well as premature death, all from acute exposure. Worsened

26 See report titled “Reliability and Emission Impacts of Sta tionary Engine-Backed DR in Regional Power Markets” included as an attachment to comments submitted August 9, 2012 by Ca lpine Corporation on the proposed rule (EPA-HQ-OAR-2008- 0708-1134).74 asthma and chronic obstructive pulmonary disease, as well as increased risk for development of asthma, are all associated with acute and chronic exposure to diesel exhaust. According to the commenter (1140), there is also evidence that shows that damage to the lungs from diesel exhaust increases the risk of developing bacterial and viral bronchitis and pneum onia. According to other studies, diesel emissions have been linked to hypertension, neurotoxicity and perinatal health and in fertility, the commenter (1140) said. Further, commenter 1140 highlighted that ma ny population groups face higher risk from air pollution, especially children, seniors and people who su ffer from respiratory or cardiovascular diseases or diabetics, as well as low income populations and people who work or exercise outdoors. The commenter (1140) talked about the di fferences children face in terms of risks from air pollutants versus adults and pointed out that children are much more vulnerable and can therefore be at higher risk than adults from toxic substances. Commenter 1140 urged th e EPA to look at the latest research and use the findings from recent studies to prevent the increased use of backup generators.
The commenter 1140 stated that communities of co lor and poorer people also appear to face higher risks and studies show that mi norities live in greater concentrati ons both in areas that do not meet Federal air quality standards and in areas with above average numbers of air-polluting facilities. In the commenter’s (1140) letter, it pointed to several studi es showing that areas of minority populations face higher health risks. One commenter (1090) expressed c oncerns that emissions from di esel RICE are significant and harmful (citing the EPA’s 2009 Regulatory Impact Analys is (RIA)), and stated th at uncontrolled diesel RICE units are dirtier than other energy sources, citing information from a recent NESCAUM analysis that showed that only Tier 4 dies el engines have emissions rates co mparable to the electric generating units (EGU) operating in New Jersey . The commenter (1090) said that a Tier 3 diesel engine has NO x emissions 5 times dirtier than New Jersey’s coal plants, and many back-up diesel engines in the region are likely pre-Tier, making them 20 times dirtier than coal and more than twice as dirty as oil peaking plants in New Jersey. The commenter (1090) said that the NESCAUM study mentioned that a monitor near an emergency diesel generator in Boston meas ured 1-minute spike in bl ack carbon PM readings exceeding 100 micrograms per cubic meter (ug/m 3 ), which illustrates the potential public health threat of multiple diesel generation sets if called upon to meet demand within densely populated areas. One commenter (1090) said that th e use of stationary diesel engines can result in significantly higher exposures relative to larger, centrally located facilities because stationary diesel technologies generally emit pollutants closer to the ground, ofte n in more densely populated areas, resulting in75 exposures to higher concentrations compared to emissions from tall smoke stacks. The commenter (1090) cited the findings of one modeling study suggest that the use of stationa ry diesel engines for energy generation could result in an approximately 20 times increas e in the fraction of conserved primary emissions inhaled by the exposed population with in 100 kilometers (km) as compared to central station electricity generation, which translates to el evated health risks for people who spend more time outdoors, such as children, adult exercisers, and outdoor workers. The commenter (1090) said that diesel engines are often used in densely popul ated areas, putting public health at an increased risk if the use of emergency engines is allowed to rise. The co mmenter (1090) cited a 2002 Environmental Defense
Fund 27 assessment of emergency diesel backup generators in California that showed that people in close proximity to emergency or back- up generators (BUGs) are exposed to more harmful diesel emissions than those living and working further away. Acco rding to the commenter (1090), that assessment showed that even if BUGs are operated as little as 100 hrs/yr, the surrounding risk zone ranges from 63 to 118 acres or 10 to 20 average city blocks, and the more BUGs are used, the larger the risk zone. The commenter (1090) said that since many BUGs are c oncentrated in densely populated areas, expanding the risk zone means increasing the number of peop le exposed to unacceptably high levels of pollution. The commenter (1090) added that the report found the population within the BUG risk zone is more likely to be low income, elderly, a nd of a racial minority. The comment er (1090) was concerned that the emergency generators would result in emissions increases on the worst air quality days of the year, such as HEDD on hot summer days. The commenter ( 1090) cited a NESCAUM study that found a generally positive relationship between daily maximum temperatures and NO x emissions from EGUs, consistent with higher air conditioning use on the hottest days. The commenter (1090) said that the study also found that the days with the highest temperatures and the highest EGU NO x emissions were also days with the highest use of diesel EGUs. The co mmenter (1090) added that on July 22, when the temperature in Newark reached 108 degrees Fahrenheit (°F), the NO x emissions from diesel EGUs was 52.5 tons, more than the total NO x emissions from all EGUs on more th an half of the days the entire summer. The commenter (1090) said that the report showed that DR resources were dispatched by all three ISO in the NESCAUM region on July 21 and 22, 2011, which coincided with the highest ozone readings that month. The commenter (1090) added that the report stated that on July 22, it is estimated that emergency diesel generators contributed up to 109 tons of NO x and 3.2 tons of PM, much of it concentrated within metropolitan areas, so me of which are n on-attainment areas.

27 See, Environmental Defense Fund, Smaller, Closer, Dirtier: Diesel Backup Generators in California accessible at http://www.environmentaldefense.org/documents/2272_BUGsreport.pdf76 Commenter 1124 added that states in the PJM regi on have raised concerns about the effects of units that operate on HEDD, regardless of annual run ti me and noted that New Je rsey has enacted strict regulations for generators that operate on HEDD. One commenter (1102) objected to any use of uncont rolled engines in DR because of they have a significant impact on ozone non-attainment in Delawa re. The commenter (1102) provided an extensive analysis (see pages 8 through 13 of comment letter) including the growth in DR resources, which the commenter (1102) believes the EPA has underestimated. The commenter (1102) compared maps of nonattainment areas with DR and concluded that the EPA’s proposal would increase the participation of uncontrolled engines in DR in the entire PJM regi on, which would exacerbate the unhealthy levels of ground-level ozone already around these non-attaining monitors from both local and upwind areas of
DR.
Commenter 994 added that because there is not a complete accurate inventory of uncontrolled RICE units, it is contrary to the public interest to expand, rather than restrict, the hours these units can operate during non-emergency periods. The comment er (994) cited similar concerns voiced in NESCAUM’s most recent report on back-up stati onary diesel engines in the Northeast. One commenter (994) discussed the pollu tants emitted by thes e engines (HAP, NO x , CO, volatile organic compounds (VOC), diesel soot), which pose h ealth impacts. The commenter (994) said that if the proposed rule changes are promulgated, then the EPA will de facto promote the creation and development of a new class of HEDD generating un its, the emissions from which will displace the emissions from cleaner generating peaking units that are part of the electric generation industry. The commenter (994) provided a table that compares po llution emissions between a simple-cycle turbine with water or steam injection and an emergency sta tionary diesel-fired RICE unit and illustrates the significantly higher emissions of NO x , HC, CO and PM from the diesel-fired RICE unit. The commenter (994) described the concerns cited by NESCAUM a nd the State of Connectic ut about the pollution impacts on HEDD from operating thes e higher polluting units. Commenter 1107 similarly expressed that the proposed rule will lead to an increase in air po llution that will be magnif ied because of relatively short stacks on diesel generators and the likelihood th at diesel generators will be called upon to generate power on the hottest, most stagnant days of the year, during a time when the potential ozone and fine particulates impacts of their elevated NO x emissions are the worst. This commenter (1107) also pointed77 to NESCAUM’s report 28 that indicated that uncontrolled engi nes participating in DR programs will create a spike in air emissions. Commenter 1140 recomme nded that the EPA work with states to come up with a reasonable timeframe for phasing out the olde st and dirtiest diesel backup generators. This is an important step as the states have to meet new PM and NO x national air quality standards, the commenter (1140) said.
Commenter 994 stated that the EP A must distinguish societal be nefits of operating emergency generators during a true emergency (e.g., interruption in normal electrical servic e from the local utility, provide electrical service to power water pumps during fires or floods, et c.) and operating them as part of a DR program, given that these later units are compensated and other clea ner resources could have been procured. The commenter (994) went on to que stion the report submitted by the petitioners to the EPA called “Modeling DR and Air Emissions in New E ngland” (revised September 4, 2003) as prepared by Synapse Energy Economics, Inc. (“Synapse”). The commenter (994) said that the report itself admits that “While the net emissions impacts of DR operati on (assuming it is not used to meet reserves) are small compared to total system emissions, in speci fic locations these impacts could exacerbate nonattainment problems and pose significant health risk s. More work needs to be done to understand the health risks of operating generators in New Engla nd.” The commenter (994) described the results of a NESCAUM analysis of a 2-day HEDD event in 2011, wh ich definitively demonstrated the negative environmental consequences of using uncontroll ed RICE units as part of a DR program:

 Based on our (NESCAUM) analysis, backup diesel generator participation during the NYISO
events are estimated to have e mitted approximately 11 tons of NO x and one-third of a ton of PM over the duration of the 4-hour event on July 21 and over 15 tons of NO x and nearly half a ton of PM over the duration of the 5-hour event on July 22.

 Backup diesel generator participation in the PJM event is estimated to have emitted between 33
and 109 tons of NO x and between one and three tons of PM during the 7-hour event on July 22. The commenter (994) concluded that there is no basi s to the claim that “...in short, emergency DR provides significant environmental benefits.” Commenter 994 sent a formal request in February 2012 to PJM to begin to publicly report the types of DR compliance and, more specifically, the amount of DR based on BTM generation. The commenter (994) said that PJM acknowledged that while it knows that 14.2 percent of the participants in its emergency DR program are utilizing BTM ge neration, nearly two-thirds, or 59 percent are

28 Northeast States for Coordinated Air Use Management (NESCAUM) report. Air Quality, Electricity, and Back-up Stationary Diesel Engines in the Northeast. August 1, 2012.78 categorized as “other.” The commenter (994) said that it is not clear what is included in the “other” category; however, it is certain that this category also includes DR participants that use uncontrolled RICE units to meet their capacity obligations to P JM, which is why the total estimates range from 25 to 35 percent, or higher. The comment er (944) said all of the negativ e environmental and human health impacts of uncontrolled diesel RICE will be compounded not mitigated , by the proposed amendments to RICE NESHAP. The commenter (994) concluded that, given that uncontro lled RICE units emit at much higher levels than environmentally regulated generation units in front of the mete r, it strains reason to
believe that emissions would rema in unchanged or decrease, (i.e., not increase) if uncontrolled RICE units (i) displace existing and future cleaner gene ration sources from the competitive market; (ii) become a larger part of PJM’s generation portfolio ; and (iii) are given additional hours of uncontrolled run-time through this rulemaking. The commenter (994) said that the NESCAUM report noted this concern about higher potential emissions from older diesel generators. One commenter (1094) stated that DR program s, implemented through operation of BTM units, harm the environment and impact human health, yet the proposed rule significantly expands the exempted hours of operation without the requisite da ta or modeling to justify this exemption. The commenter (1094) noted concerns expressed by the Am erican Lung Association, which stated, in part, that “(b)ecause they are powered by diesel fuel, BTMs contribute to fi ne particle pollution levels and attendant health effects. The health impacts of sh ort-term exposure (over hours to days) of particulate matter have been found to include: death from resp iratory and cardiovascular causes, and strokes” (among other health issues) . . . (W)e believe that a quadrupling of the allowable hours that a BTM could operate is unacceptable, presenting a risk to those who live, work or play nearby.” The commenter (1094) stated that the World He alth Organization (WHO) has found that diesel fumes do in fact cause lung cancer and are even more carcinogenic than secondhand cigarette smoke. The commenter (1094) asserted that the EPA lacks da ta on the total number a nd location of affected RICE units, nor has the Agency performed any speci fic modeling or analytics to substantiate the
substantial increase in exem pted hours of operation. Commenter 1076 said that if the current proposed ru le goes final it will lead to further harmful emissions from diesel engines and worsen health ri sks. Commenter 1123 stated similar concerns and is strongly against adopting the proposed rule. In co mmenter 1123’s letter, the commenter included a comparison table that indicated th at diesel backup generators are comparatively dirtier than other available resources (see page 5 of EPA-HQ-OAR-2008- 0708-1123). For instance, the commenter (1123)79 showed PM emissions from a Tier 3 nonroad diesel engine of 0.22 g/KW-hr versus the PM emissions from a water or steam injected simple-cycle turb ine operating on No. 2 fuel oil of 0.08 g/KW-hr.
Commenter 1134 asserted that the EPA needs to make sure that any exemption that is provided for emergency engines does not come at the cost of air quality and public health, and in the commenter’s (1134) opinion, the proposed rule would worsen ai r quality and interfere with attainment and maintenance of the NAAQS. Commenter 1101 also said that increased e missions from diesel generators participating in emergency DR programs might make it difficult for states to comply with ozone NAAQS. For instance, the commenter (1101) said th at the New Jersey Department of Environmental
Protection has indicated to the EP A “to expand the allowable operati ng hours of uncontrolled emergency stationary RICE operating in a DR mode from 15 hours to 60 hours would result in significant NO x emissions from upwind stat es on high ozone days and would impair New Jersey’s efforts to attain and maintain the ozone [NAAQS]. 29 ” Also, commenter 1101 said that th e State of Delaware expressed
similar concerns about emissi ons impacts from upwind states. 30

Response : The EPA does not agree with the commenter that it should have conducted air quality modeling to determine the impacts on public health, or that it s hould base the standards on the health
risk from diesel exhaust. Since this is a MACT /GACT standard, the standards are based on technology, availability, and cost; the EPA does no t consider health risk in this phase, except for threshold pollutants as discussed in CAA section 112(d)(4), which are not a factor here. Commenter 1134 mistakes section 112(d) with section 112(f) of the CAA, which is not applicable to this rule. The 75 percent reduction number is a total for all stationary sources in a strategy document submitted to Congress, and the
commenter does not connect this action to that document. Regarding the report submitted by commenter 1101, the EPA notes that it assumes the DR capacity would be replaced with new gas and wind ge neration, which is not guaranteed to occur. Also, in the NESCAUM report cited by commenter 994 a nd in the report cited by commenter 1134, there was no distinction between emergency and non-emergency DR, and do not take into account the reduced hours of use, and thus reduced emissions, attributab le to emergency DR. To the extent the commenter

29 New Jersey Department of Environmental Protection, Co mments to U.S. EPA re: Proposed Settlement Agreement on RICE NESHAP, EPA Docket No. EPA-HQ-OGC-2011-1030 (Feb. 3, 2012). 30 See Petition of Reconsideration of Delaware Department of Natural Resources and Environmental Control, EPA Docket No. EPA-HQ-OAR-2008-0708-0400 (Apr. 30, 2010).80 claims that DR will grow, there app ears to be nothing in the record to indicate emergency DR, which is restricted to specific ci rcumstances, will have the same change in the market as economic DR. Another commenter (1142) in its comments on the proposed rule referred to the EPA’s Synapse study, which indicated that there would be a net bene fit in air quality in having quick start resources such as emergency generators fo r emergency DR available, reduc ing reliance on spinning reserves.
Information from commenter 1142 also indicates that increased use of emergency engines in emergency
DR could reduce emissions. In terms of the NESCAUM report that commenter 994 refers to that talks about the effects of backup generators on HEDD events , again, the EPA finds that analysis to be limited based on a very brief analysis period (2 days) and may not be representative and justified in supporting a conclusion that emergency generators clearly c ontribute to HEDD events and the EPA does not know what those estimates are based on from that study . The EPA does not believe NESCAUM can conclude without a doubt that emergency DR correlates with high ozone days. Again, the analysis was only over 2 days. Also, in the alternative, the EPA does not know what those backup engines would have been replaced with. The results of the analysis conducted for the report are only applicable for areas with capacity market and may be dependent upon fuel pri ce assumptions. Further, other studies spanning for a longer time looking at many events over many years in different areas of th e United States shows a different result (see attachment to EPA- HQ-OAR-2008-0708-1142.) This more robust and comprehensive study, concluded that there is no correlation between emergency DR and high ozone
concentration. Commenters were concerned that these engines would be called to operate for DR on high ozone days, further contributing to non-a ttainment with ozone standards. However, other commenters noted that emergency DR events do not predominantly occur on ozone exceedance days, as discussed in comment 1.1.1. For example, commenter 1142 provided an analysis that showed that the data do not show that the use of emergency engines during the DR events causes high ozone, particularly since in many instances the ozone concentrations are as hi gh or higher on the days preceding a DR event. The commenters who expressed concern about the impact of the emissions from these engines did not provide any information linking the emissions to exceedances of the ozone standard. Emergency conditions leading to blackouts or near-blackout in stability can be caused more by extreme weather events or malfunctions, and emergency DR is differe nt from economic DR in that there is less likelihood of a connection between peak load conditions and the need for emergency DR. Commenters who supported EPA’s proposal also noted that some of the commenters opposing use of emergency engines during emergency DR would benefit by such a limita tion because other emission sources may be used81 instead of the emergency engines, including sources that some of these commenters may operate, and that the effect on total emissions of using these alte rnative emission sources is not clear. Concerns about contribution to ozone non-attainment by stationary engines can be addressed through area-specific requirements such as state-based State Implementation Plan s that would be directed towards ozone nonattainment areas. The EPA notes that rather than lead ing to an increase in the operation of these engines for emergency DR, the RICE NESHAP requirements that take effect in 2013 will for the first time limit the operation of the engines for emergency DR. The EP A also notes that the a dd-on controls that would be installed on existing engines if they were treated as non-emergency engines would not reduce
emissions of NO x , so even if the EPA required such controls this rule would not reduce those emissions. However, in response to the concerns about th e air quality impact of emissions from emergency engines operating in emergency DR programs, the EPA is finalizing a requ irement for owners and operators of existing emergency CI stationary RICE with a site rati ng of more than 100 brake HP and a displacement of less than 30 liters pe r cylinder (l/cyl) that use diesel fu el and operate or are contractually obligated to be available for more than 15 hrs/yr (up to a maximum of 100 hrs/yr) for emergency DR to
use diesel fuel that m eets the requirements in 40 CFR 80.510(b) for nonroad diesel fuel. This fuel requirement also applies to owners and operators of new emergency CI stationary RICE with a site rating of more than 500 brake HP with a displacement of less than 30 l/cyl located at a major source of HAP that use diesel fuel and opera te or are contractually obligated to be available for more than 15 hrs/yr (up to a maximum of 100 hrs/yr) for emerge ncy DR. Owners and operators must begin meeting this ULSD fuel requirement on January 1, 2015, excep t that any existing diesel fuel purchased (or otherwise obtained) prior to January 1, 2015, may be used until depleted. As noted by commenters on the proposed amendments, requiring the use of di esel fuel meeting the requirements of 40 CFR 80.510(b) is expected to substantially reduce emissions of SO 2 and direct and indirect PM. In addition, use of ULSD will reduce HAP emissions significan tly from the engines compared to emissions resulting from use of unregulated diesel fuel. Although the EPA does not have information specifying the percentage of existing stationa ry emergency CI engines currently using residual fuel oil or nonULSD distillate fuel, the most recent EIA data availabl e for sales of distillate and residual fuel oil to end users show that significant amounts of non-ULSD are still being purchas ed by end users that typically operate stationary combustion sources, including stati onary emergency CI engines. For example, in the category of Commercial End Use, sales data for th e year 2010 show that only 45 percent of the total
distillate and residual fuel oil sold was ULSD. The data provided for Electric Power End Use show that 68 percent of total fuel sold was residual fuel oil. For Industrial End Use, the percentage of total fuel that82 was residual fuel oil was 20 percent. The fuel requ irement begins on January 1, 2015, in order to give affected sources appropriate lead time to inst itute these new requirements and make any physical adjustments to engines and other facilities like tanks or containment structures, as well as any needed adjustments to contracts and other business activ ities, that may be necessitated by these new requirements. The EPA does not agree that emissions of di esel exhaust are likely to go up significantly compared to the estimates used in the original ru le, given the very limited usage of such engines in emergency DR. It is also worth noting that the circumstances during which these engines will be permitted to run under the rule are in circumstan ces that would prevent blackouts, which, if not prevented, would mean the use of all emergency e ngines in the affected area, which would create substantially greater emissions fro m diesel emergency engines than if these limited emergency DR engines are used for a short period of time. Further, in the event of bl ackouts, people’s health and safety are jeopardized. During a blackout, th ere are human health effects that can result from extreme weather temperatures, hot or cold, that become uncontrolla ble during the loss of electricity. Commenter 1082 provided in their comments an analysis conducted by Bl ue Sky Environmental that looked at the health effects resulting from a blackout in 2012. The study indicated heat-related deaths were not above average because of the availability of emergency backup generators. Ho wever, the commenter noted that
there were several heat-related deaths during the extreme heat. Al so, commenter 1143 referred to the incident where during the 2003 blackout in New York City, where millions of gallons of untreated sewage ended up in the rivers of the city. Various states have acknowledged the health and safety damage that can be the result of losing the electric grid and have in their regulations permitted the use of emergency engines in emergency DR progr ams. Further, in a study published by NIH 31 , it was found that during the blackout of 2003 in Ne w York City put people in greater health peril. Specifically, the results and conclusion of the study were the following: “We found that mortality and respiratory hospita l admissions in NYC increased significantly (two- to eightfold) during the blac kout, but cardiovascular and renal hos pitalizations did not. The most striking increases occurr ed among elderly, female, and chronic bronchitis admissions. We identified stronger effects during the bl ackout than on comparably hot days. In contrast to the pattern observed for comparably hot days, higher socioeconomic status gr oups were more likely to be hospitalized during the
blackout.

31 “Health Impact in New York City During the Northeastern Blackout of 2003”, Public Health Rep. 2011 May-Jun; 126(3): 384–393; http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3072860/83 “This study suggests that power outages may have important health impacts, even stronger than the effects of heat alone. The findings provide some direction for future em ergency planning and public health preparedness.” 26 The final amendments also require owners and operators of emergency st ationary RICE larger than 100 HP that operate or are contractually obligated to be available for more than 15 hrs/yr (up to a maximum of 100 hrs/yr) for emergency DR to subm it an annual report to the EPA documenting the dates and times that the emergency stationary RI CE operated for emergency DR, beginning with the 2015 calendar year. Commenters on the proposed am endments recommended that the EPA gather information on the impacts of the emissions from emergency engines during emergency DR situations. The EPA agrees that a reporting requi rement will increase the EPA’s ability to ensure that these engines are operating in compliance with the regulations and th at it will provide furt her information regarding the impacts of these engines on emissions. In resp onse to these comments, the EPA is establishing a requirement to annually report to the EPA the engine location and duration of operation for emergency DR. This information will be used by the EPA, as we ll as state and local air pollution control agencies, to assess the health impacts of the emissions from these engines and to aid the EPA in ensuring that these engines comply with the regulations.

Cost Effective Controls are Available
1.2.14 Comment : One commenter (1140) stressed that many of the uncontrolled diesel engines that the proposal affects can be fitted with co ntrols to comply with the current standards or replaced with modern
and controlled units. Commenter 11 34 urged the EPA to require any engine participating as a DR resource in a competitive wholesale energy or capacity market administered by an ISO or RTO that is an economic, for-profit activity, to use the resulting re venue towards the cost of installing emissions controls and these engines should be provided no exemption. Commenter 1134 said that the engines could operate for more than 15 hrs/yr under a DR program by simply implementing the necessary
NESHAP controls to meet the non-em ergency standards under the rule a nd building the cost of controls into the price at which the DR resource is bid in the market. Similarly, comment er 994 said that it is evident that the revenues derived from participati ng in an economic activity for financial gain are sufficient to provide uncontrolled RICE units with th e necessary resources to i nvest in pollution control technology, which would enhance , not impede , Federal and state environmental goals. Similarly, commenter 961 expressed that it seems that uncontrolled diesel-fired BTM generators could be
retrofitted to meet the current emission standards if the EPA limits the r un hours. The commenter 96184 pointed to statements and information published by the Manufacturers of Emissi on Controls Association (MECA) that indicate that ther e are emission controls that can significantly reduce PM, NO x , CO, HC
and other toxic emissions emitted from diesel engines, and concu rred with MECA’s statement during the July 10, 2012, public hearing that any revenue gene rated from participation in a DR program should be put towards reinvestments in controls to redu ce emissions. Commenter 1123 al so similarly said that backup generators should not simply be allowed to pocket the money earned fr om capacity payments, but should put that extra income towards appropri ate controls. Commenter 982 (MECA) restated in written comments on the proposed rulemaking that any e ngine that is operating for financial gain should use a portion of the compensation towards pollution c ontrols. There are demonstrated ways to reduce
HAP emissions from stationa ry diesel engines and oxidation catalysts are the most cost effective way of doing so, according to commenter 982. Participation in emergency DR programs that provide financial benefits is a huge incentive for owne rs of stationary backup generators to invest in the proper controls for their engines, the commenter (982) said. Also, the commenter 961 pointed to a 2003 report 32 by NESCAUM stating that applicable c ontrol technologies such as partic ulate filters and oxidation catalysts may be relatively inexpensive to retrofit compared to NO x controls such as SCR. The commenter (961) cited to an additional report by Carnegie Mellon Univer sity that found that on a full cost basis: “properly controlled diesel generators are cost-effective fo r meeting peak electricity demand,” and therefore recommends implementation of NO x and PM 2.5 controls for such sources.” 33 One commenter (1122) said that emergency engines should only be used for emergency situations, unless they are properly controlled. Anot her commenter (1140) asserted that it opposed the proposal to allow more operating hour s for stationary emergency engine s to participate in DR programs and anything other than true emergencies. The comme nter (1140) clarified that it wants hospitals to operate their generators when the power goes out and industrial facilities to run water pumps when there is a fire. On the other hand, commenter 1140 stated th at high emitting diesel e ngines are not required to reach those goals and the commenter (1140) said that those engines should not be used when no real emergency exists. In particular, the commenter (1140) said, hospitals and other emergency sources can and should take advantage of technology to retrofit a nd install aftertreatment on their existing generators to reduce the well-documented acute impact s diesel exhaust emissions and PM.

32 http://www.nescaum.org/document s/rpt030612dieselg enerators.pdf/. 33 Elisabeth A. Gilmore, Peter J. Adams, Lester B. La ve, “Using Backup Generators for Meeting Peak Electricity Demand: A Sensitivity Analysis on Emission Controls, Location, and Health Endpoints,” J. Air & Waste Manage. Assoc. 60:523–531 (2010).85 One commenter (1090) said that requiring polluti on controls for RICE units as a condition of participating in DR programs will not jeopardize sy stem reliability because emissions controls are technically and economically feasible in all instances.

Response : The EPA does not agree with the commenters that add-on contro ls such as oxidation catalyst would be appropriate for stationary emergency engines. As disc ussed in the memorandum titled “MACT Floor Determination for Existing Stationary Non- Emergency CI RICE Less Than 100 HP and Existing Stationary Emergency CI RICE Located at Major Sources and GACT for Existi ng Stationary CI RICE Located at Area Sources” (Document number EPA-HQ-OAR-2008-0708-0327), the EPA determined that work practices were the MACT floor for ex isting stationary emergency engines because the application of measurement me thodology is not practicable due to technological and economic limitations. It is impracti cable to test emissions from stationa ry emergency engines during periods of routine testing and maintenance using the test procedur es specified in the rule because it would increase the required number of hours of operation of the engine beyond the routinely scheduled reliability testing and maintenance operation, th ereby increasing emissions. It is also impracticable to apply the testing methodologies required in this rule to test the stationary engines during periods of emergency operation because emergencies are unplanned events a nd implementation of the pr ocedures specified in 40 CFR part 63, subpart ZZZZ require advance planni ng before tests are conducted. The EPA evaluated
the cost effectiveness of add-on c ontrols for emergency engines that are used a very limited number of hrs/yr for emergency situations and required maintenance and te sting. Because these engines are typically used only a few hrs/yr, the costs of add- on emission control are not warranted when compared
to the emission reductions that would be achieved. The few hrs/yr historically required for emergency DR does not change this analysis, which indicate ve ry high costs per ton of e missions reduced. The cost per ton estimates for stationary emergency CI engi nes can be found in the memorandum entitled “Cost per Ton of HAP Reduced for Existing Stationary CI RICE” in the rulemaking docket (EPA-HQ-OAR2008-0708-0290). The cost per ton of HAP reduced would be even higher if CDPF were to be used. The
EPA estimated the cost of CDPF in a memorandum 34 and based on those costs the cost per ton of HAP removed with CDPF, would be even higher than w ith oxidation catalyst. The EPA also estimated the

34 Memorandum from Bradley Nelson, EC/R to Melanie King, EPA. Control Costs for Existing Stationary CI RICE. January 29, 2010. EPA-HQ-OAR-2008-0708-0328.86 cost of CDPF on new emergency engines for the CI NS PS and those cost were excessive as well, even with the lower cost of CDPF that is expected with new engines. 35 The EPA does not agree that the revenue gene rated from the operation of the source should be
subtracted from the cost of a dd-on controls and other compliance requirements when evaluating the
cost-effectiveness of the control. The EPA determin ed that it was appropriate to set GACT to be the same requirements as those required for emergency e ngines at major sources because the same issues
that were discussed above for st ationary emergency engines at major sources apply to emergency engines at area sources. Moreover, the payments that units get for being available for emergency DR are separate from the question of the cost of the contro ls per ton of pollutant reduced. The EPA does not subtract the money an owner or opera tor may make from the use of a sour ce, either directly or indirectly, from its calculation of costs per ton of pollution reduce d, as both the regulated and unregulated scenarios presume that the source does operate and earns th e funds resulting from su ch operation. (Obviously, no pollution source would ever operate were there not some benefit to such operation for the owner or operator.) Inclusion of such funds in this calcula tion, aside from introducing an element that is not directly relevant to the question of cost-effectiv eness of the emission control, would subject these owners and operators to cost eff ectiveness tests never required for ot her sources, including those sources that are competitors with these sources. The comment ers did not provide inform ation to show that addon controls are generally available and widely used fo r stationary emergency engi nes, or that they would be effective given the limited operation of the engines.

EPA’s Authority/Obligation to Regulate
1.2.15 Comment : One commenter (1123) also discussed how th e EPA has failed to comply with specific section of the CAA. Specifically, section 112(d) of the CAA requires the Agency to promulgate
emissions standards for sources in listed source categories. The comment er (1123) referred to the EPA’s flexibility to use GACT or manage ment practices for area sources, but that the Agency has not evaluated the scope of control technologies or management practices that would be “generally available” for the engines in question. On the contrary, the EPA has simply assumed that it w ould not be economically feasible for backup generators to put on controls , the commenter (1123) sa id, without considering additional revenues earned through capacity markets.

35 Memorandum from Tanya Parise, Alpha-Gamma Technologies to Jaime Pagán, EPA. Cost per Ton for NSPS for Stationary CI ICE. EPA-HQ-OAR-2005-0029-0276. May 12, 2006.87 Commenter 1134 said that it found the EPA’s settle ment agreement with DR aggregators, which committed the EPA to propose under the rule to allo w emergency engines to operate for 60 hrs/yr for DR purposes without emissions control, very troublesome. Commenter 961 emphasized that the proposal is not in the public intere st and is inconsistent with the policy and legal requirements of the CAA. Commenter 1076 similarly said that the EPA s hould substantially revise the proposed rule in order to uphold its duty to protect the environment and public health. In commenter 961’s opinion, the EPA has no justifi cation to avoid the statute to reduce harmful emissions and protect the environment in order to address, according to the commenter (961), a perceived problem that in the commenter’s (961) opini on is entirely within the jurisdiction of the FERC. The commenter (961) also argued that the proposed ru le does not meet the requi rements of the CAA and is not in compliance with other Federal regulations . Likewise, commenter 1134 said that the EPA runs afoul of its duty to protect public health. Commenter 1123 asserted simi lar statements and added that the contemplated exemptions under the proposed rule ar e unwarranted and repres ent a departure from the Agency’s historical treatment of backup generato rs. Commenter 1076 also said that the EPA is not meeting the requirements under the CAA with this rule and has not provided justification for proposing a rule that would increase air pollution and health risks. Commenter 1076 asserted that if the settlement adopts the proposed rule, it would be a violation of the CAA because the CAA requires the EPA to consider the public interest before adopting a settl ement agreement (commenter 1076 cited to 42 U.S.C. 7413(g) (stating the Administrator may withhold support of a settle ment that is “inappropriate, improper, inadequate, or inc onsistent with the requirements of this chapter.”)). In commenter 1076’s opinion, the proposed rule also violates the Administrative Procedure Act
because it lacks sufficient informa tion to make a reasoned decision. Since the proposed rule is based on erroneous as sumptions that the provisions proposed will not lead to additional emissions impacts, the commenter (1134) stated that it would be arbitrary and capricious for the EPA to finalize the proposed rule as it currently reads. Commenter 1123 said the proposed rule is arbitrary and capricious and does not comply with the CAA. Commenter 961 also stated that the EPA has not proposed a rule that is consiste nt with the requirements of section 112 of the CAA, which directs the EPA to regulate HAP emissions from each category or subcategory that emits HAP. The United States Court of Appeals for the D.C. Circuit has further di rected that the Agency cannot deviate from this statutory requirement and choose to exempt certain categor ies or subcategories of sources from regulation, in the absence of demonstr ating that such exemption nevertheless comports
with section 112 of the CAA. Two commenters (961 and 1123) do not believe that the EPA has88 provided adequate cause for exempting emergency engines participating in DR programs to meet emission standards necessitating af tertreatment. Commenter 1076 disagr ees that the rule has to be adjusted to accommodate requirements of various ISO and said that such a move has no basis in law and is an unnecessary capitulation to private interests. The commenter (1076) cited to the proposal where the Agency said that many commenters were concerned than 15 hrs/yr would be inadequate for participation in certain DR programs. The commenter (1076) said th at the EPA’s reasoning is inadequate and that the Agency’s regulatory power is not limited by the re quirements of ISO. Acco rding to commenter 1076, ISO minimum hour requirements were not developed unde r any obligation to meet the CAA and are not related to protecting the environmen t. The EPA should focus on its obliga tion to project the public and if a rule conflicts with ISO requirements, ISO shoul d change their requirements, not the EPA, the commenter (1076) said. The commenter (1076) further said that the settle ment clearly indi cates that the ISO tariff compliance is not a requi rement of the settlement and said that the settlement states that Petitioners will withdraw their lawsuit against the EPA is the Agency adopts a rule that is “substantially the same” as a rule that allows emergency DR fo r 60 hrs/yr of the minimum required by ISO tariff, whichever is less. The commenter (1076) argued that th e EPA left out the key phrase “whichever is less” from the proposal, which actually indicates that the Petitioners were not primarily concerned with a particular ISO tariff. The commenter (1076) indi cated that it does not understand why the EPA has imposed a prerequisite in the rule when the Petiti oners made it clear that m eeting ISO requirements is not a prerequisite for signing the settlement agreement. The commenter (1076) added that the original rule did not prohibit emergency diesel engines from participating in DR programs, only that these engines would have to install controls if they ex ceed 15 hrs/yr of operati on. So, the commenter (1076) said, the only thing commenters can argue is that it ma kes it less lucrative to run dirty diesel engines. As a policy matter, commenter 1134 viewed the settlement to be flaw ed, and commenter 961 asserted that the settlement agreement basically precludes the EPA from satisfy ing its obligations under the Administrative Procedures Act (APA) to pr ovide full and complete opportunity for public participation in the regulatory process because the EPA has already essentiall y indicated that it has reached a decision prior to taking public comment by agreeing to specific terms in the settlement agreement. In the commenter’s (961) opinion, the EP A has violated the obligations of the APA. The commenter (961) acknowledged that it understands th at the EPA commonly will enter into settlement agreements to resolve various issues, however, hist orically these settlement agreements require the Agency to issue requirements consistent with gene ral goals and the Agency has flexibility to propose language that meets the general goa l; settlement agreements typically do not contain specific terms.89 Therefore, the proposal departs from the precedent a nd the fundamental distinc tion in approach cannot be sanctioned under the public policy objectives embodi ed in the APA, the commenter (961) stated. Commenter 1090 said that the EPA, unlike PJM and other RTO/ISO and FERC, has the authority and the responsibility to establish rigorous cl ean air rules to protect the public from harmful air pollution. The commenter (1090) said that it is the EPA’s duty to de velop a rule that can be feasibly implemented, is effective in pr otecting public health and avoids making arbitrary and capricious decisions. The commenter (1090) belie ves that the proposed rule fails to achieve these basic goals and requirements.

Response : The EPA does not agree that it has failed to comply with the requirements of the CAA. The EPA conducted a GACT analysis for emergency engines as part of th e 2010 rulemaking and determined that add-on controls were not appropr iate or cost effective for emerge ncy engines. As discussed in the RTC 1.2.12, the few additional hours of use that may result from the additional permissible hours for emergency DR availability will not change that analysis, and th e EPA does not generally consider the revenue generated from the operatio n of a source in determining wh ether an add-on control is cost
effective. The commenters did not provide information to support their contention that the EPA is not meeting the legal requirements of the CAA. On the contrary, the EP A has appropriately set MACT and GACT standards for these engines based on the requirements of the CAA, as discussed in the RTC 1.2.12. The EPA is not exempting any sources in the source category from regulation and has established work or management pr actice standards for emergency engi nes, and in addition, is requiring the use of ULSD for engines contracting to be available for emergency DR beyond the preexisting 15 hrs/yr. Regarding the comments that EPA should not base its rule on ISO tariff requirements, though the
EPA does believe that its rules shoul d not prevent the use of emergenc y engines as part of emergency DR programs run by ISO, those requirements were not the only consideration. This is a nationwide rule
that must account for the different scenarios under which these engines are operated, which includes emergency DR as well as local system issues such as when the voltage changes by 5 percent or more. As discussed in the RTC 1.2.4., the decision to allow 100 hrs/ yr for such use was as much or more related to
the needs of small and isolated local systems as it was to the requirements of any ISO tariffs. The EPA does not agree with the comment that EPA did not provide full and complete opportunity for public comment, or that it lacks suffic ient information to make a reasoned decision. As90 discussed in the RTC 1.2.9, the EPA published a Fede ral Register notice in December 2010 soliciting comment on the limitation for emergency DR, and al so held a public meeting in January 2011 to seek input on this issue. Moreover, the EPA published a pr oposed rule for this action containing the reasoning for the proposed revision (77 FR 33812) and had a public hearing on July 10, 2012. The EPA also has included numerous supporting documents for that propos al in the docket, and has added to the docket with comments and further supporting information as they have become available. The settlement agreement is consistent with numer ous other settlement agreements the EPA has entered into in the past that provided specific provisions for proposal, it does not oblige the EPA to take final action promulgating the regulatory revisi ons as proposed, and only allows the litigants to reinstitute their litigation if the EPA decides not to final those changes. The EPA provided its reasons for proposing these changes as they apply to meeting its legal authority, and the EPA remained fully able to not finalize those changes, or to finalize them in a ma nner different from the manner proposed, if the public
comments or other information led the EPA to th at result. The EPA would not sign a settlement agreement that did not allow us the full ability to ta ke final action different from that proposed. Indeed, the EPA has promulgated obligatio ns for use of ULSD and reporti ng on engines using emergency DR that were not included in the propos al. Additionally, as discussed in s ection 2, the EPA has not finalized the provisions applicable to the “peak shaving” provisions that were prop osed, based on the public
comments it received.



### 1.3 Recommendations on Specific Regulatory Language

1.3.1 Comment : Two commenters (1082 and 1126) supporte d the proposed inclusion of local distribution system voltage suppor t as a justification for running emergency RICE. The commenter (1082) noted that many industry standa rds compel utilities to maintain distribution syst em reliability, including providing a supply of elect ricity at a steady state, or nominal expected voltage. The commenter (1082) asserted that RICE units are one u tility solution that can be used to correct local system voltage disturbances during emergencies that occur outside of the local utility’s control. The commenter (1082) stated a utility can act by engaging its RICE unit(s) as needed to return distribution voltage to required levels and, thus, ensure essentia l public services are availa ble during severe weather

events. The commenter (1082) added that the EPA wa s correct to include voltage support as an acceptable definition and criteria fo r local distribution sy stem emergencies. The commenter (1082) asserted that low voltage levels can damage custom er equipment and violate rules and standards. The91 commenter (1082) believes that the EPA’s proposed ch anges will provide utili ties with the necessary ability to respond to emergencies by not limiting the use of all RICE units to periods when an EEA Level 2, as defined in the NERC Reliability Standa rd EOP-002-3, Capacity and Energy Emergency, has been declared by the ISO. The commenter (1082) further asserted that th ere are system conditions under which imports from remote generation sources may not be either ti mely or sufficient to address emergencies. The commenter (1082) added that where there is an inab ility of the local distribution system to import generation from external sources, operation should not be limited to a set number of hrs/yr. The commenter (1082) argued that these operating emergenc ies are most likely to occur under severe system
conditions that amount to for ce majeure or acts of God. The commenter (1082) stated that emergencies ma y arise due to the loss of equipment on local distribution circuits, creati ng highly localized voltage limits that can only be addressed in the short term through either local generation or the shedding of re tail customer load. The co mmenter (1082) suggested that these situations could be cited in a log kept as a record of emergency events. The commenter (1082) stated these circumstances are highl y infrequent, but extremely difficu lt to prevent altogether, making an extended RICE operating exception reasonable under th e circumstances. As a majority of its members are not NERC registered entities, according to the commenter (1082), under the EPA’s current regulations, they could not run thei r RICE units for distribution volta ge support when their third party transmission provider cannot provide an adequate voltage level. The commenter (1082) suggested that the EPA’s frequency related trigge r for emergencies should be made more applicable to real world situations. The commenter (1082) asserted that while the EPA’s establishment of emergency triggering conditions at 5 percent for system voltage is correct, rather than using 5 percent as the triggering event for frequency related emergencies it would be mo re appropriate to use the following language: “If a utility is required to respond to underfreque ncy or overfrequency conditions, or to shed load during an underfrequency load shedding event, the uti lity should be allowed to run their RICE units to bring back service to their customers while the interc onnection is being rebuilt, or as needed to maintain proper frequency.” The commenter (1082) concluded that underfre quency situations are extremely rare and situational and that more flexibility is required in triggering criteria. Regarding the 5 percent voltage or frequency de viation that the proposed rule specifies, one commenter (1073) is of the opinion that this criteria is not beneficial and the commenter (1073) believes that DR generation needs to be accessed prior to th e bulk electric systems bei ng jeopardized. According92 to the commenter (1073), current under-frequency load-shedding programs used by electric utilities being to shed loads at a frequency of 59.5 Hertz. The commenter (1073) recommended that the EPA change the criteria in the final rule to a devi ation of 5 percent to a deviation of 0.5 Hertz. Regarding the proposed language in §63.6640(f)(2 )(iii) concerning voltage or frequency changes, commenter 1043 deferred to and e ndorsed commenter 1082’s co mments. Commenters 976, 985, 986, 999, 1104, and 1018 indicated that they support the use of a voltage trigger in addition to the EEA level trigger, but are concerned that the 5 percent deviation would not always be sufficient in order to avoid or isolate system problem s, especially for very small syst ems. In such cases, the commenter (1104) asserted, a lower percentage of voltage variance (perhaps 2 perc ent, as determined by the local distribution system operato r or similar operational authority) might be needed to contain system disruptions and stop them from spre ading to neighboring systems. The commenter (1104) stated that the proposed amendments appear to ma ke no distinction between voltage and frequency and that frequency variations are extremely rare and s ituational, and therefore more flexibility is needed for any triggering criteria. If a utility is required to respond to unde rfrequency or overfrequency conditions, or to shed load during an underfrequency load-shedding event, commenter (1104) stated the utility should be allowed to
run its RICE units to bring back service to its customers while th e interconnection is being rebuilt, or as
needed to maintain proper frequency. One commenter (1091) supported the EPA’s propos ed revisions to the emergency condition language in §63.6640(f) that specifies the circumstan ce during which stationary emergency engines are allowed to operate for emergency DR purposes. The commenter (1091) stated that its activities are governed by a set of rules and rate schedules set fort h by the Public Utilities Commission of the State of Hawaii known as the Hawaiian Electric Tariff (“Tari ff”), which specifies that primary voltages will normally be no more than 5 percent above or below the nominal voltage. The commenter (1091) believes the proposed revisions related to voltage va riation are consistent with the Tariff and would allow them to dispatch emergency stationary engines participating in its emergency DR program during periods where there is a deviation of voltage or fre quency of 5 percent or more below standard voltage or frequency. One commenter (1102) supports the proposal to inco rporate periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency as a valid emergency
condition.93 Response : The EPA does not agree with the commenter that there shoul d be no limitation on operation if there is an inability of the local distribution syst em to import generation from external sources. The commenter did not provide sufficient information or detail to show that these should be considered emergency situations. The EPA believe s the allowance for deviations of voltage or frequency needs to be limited to verifiable emergency situations just ifying the use of emergency generators. Limiting the hours for these types of events, where power has no t been interrupted, to the preexisting 100 hours of use prevents these units from being used too frequ ently than their intended use and prevents power suppliers from relying too heavily on these engines intended for emergenc y use. Generators intended for extended use to supplement uninterrupted power can c ontinue operation with the required controls. This is also true of engines that operators desire to be operated prior to emergency conditions. The commenter’s suggested language related to the fre quency trigger is not sufficiently specific or
enforceable to be used as a standard in the rule. Similarly, the standard cannot be based on what each local distribution system operator determines is the appropriate trigger. The commenter who
recommended a deviation of 0.5 Hertz did not provide information showi ng that this criterion could be applied broadly in a nationwide rule. The EPA notes that the preexisting allowa nce of 50 hours of nonemergency use continues and has been expanded slightly in this rule , which may allow for limited use of these engines prior to full emergency conditions.

1.3.2 Comment : In order to prevent uncontrolled emergenc y engines to operate under DR programs and receive payment by the ISO or RTO, but allowing operation of legitimate, reliability-driven DR and peak shaving, one commenter (1134) suggested that the EPA include the following to the end of proposed paragraphs §63.6640(f)(2)( ii) and (iii) and §63.6640(f)(4)(i): “provided, however, that no operation shall be authorized pursuant to this paragraph (f)(_)(_) if any electricity ge nerated by, or the capacity a ssociated with, the emergency stationary RICE has been procured as a result of participation in an organized competitive market administered by an i ndependent system operator or regional transmission organization and the owner or operator of the stationary RICE receives any payment or revenue as a result of such procurement, either directly from the relevant independent system operator or regional trans mission organization or through a third party.” The commenter (1134) acknowledged that there could be unique situations associated with transmission constraints, load pockets and other conditions on the grid that would necessitate the94 operation of certain backup generators to operate so lely to address legitima te reliability concerns unrelated to the economic dynamics associated with competitive power markets. Therefore, the commenter (1132) said that the exemption provided by the rule should only be available for stationary emergency engines that serve exclusiv ely for reliability and do not par ticipate in ISO- or RTO-organized competitive wholesale market and re ceive revenue as a result of procurement of their resource in such market. The commenter (1134) does not believe that the above proposed recommendations are excessively burdensome because exempt engines woul d still have the 100 hour allowance for emergency DR participation if the DR program is not operated as a competitive market resource. Further, diesel engines could still participate in DR programs by m eeting the non-emergency emi ssion standards in the rule and the commenter (1134) disagrees with the EP A’s statement that preven ting stationary emergency engines from participating in these programs w ithout installing aftertreatment could force owners/operators to leave their engines out of thes e programs. The EPA estimates that to install and operate controls on a 500 HP engines to meet the requirements of the rule would cost $14,000 as a onetime cost and $3,000 per year, the commenter (1134) said, however, under PJM, the clearing price for limited DR was $304.62 per MW-day. This means th at a 500 HP (373 KW) e ngine could earn about $42,000 through participation in PJM’ s limited DR program for the 2015/2016 delivery year. According to the commenter (1134), this means that complying w ith the rule could involve a payback of less than 1 year, which in the commenter’s (1134) opinion is obvi ously feasible and affordable for most engine

owners. In addition to the above recommendation, the commenter (1134) also proposed that the EPA include a self-certification requirement in the rule in order to ensure that engine owners and operators comply with the commenter’s (1134) suggested limitation on the DR participation exemption. The commenter (1134) proposed specific rule la nguage changes in the comment letter. One commenter (994) that opposes the DR program said that proposed rule sections 40 CFR 63.6640(f)(2)(iii) and (f)(4), 40 CFR 60.4211(f) and 60.4243(d) should all be revised to limit emergency stationary RICE to those that are owned or operated by a cooperative electric utility or municipal electric utility. The commenter (994) added that previous comments submitted to the EPA by representatives of various cooperative electric utilities and municipal electric utilities defe nded the use of stationary RICE generators “as a choice of last resort ( emphasis added) before either buying power on the spot market at potentially exorbitant prices, or needing to build additional capacity” (i) to respond to localized grid stability issues that are not easily recognized by the grid operator or (ii) as part of DR program to help maintain electricity rates as affordable as po ssible for their cooperativ e customers. Although the95 commenter (994) believes that ambient air quality w ould ultimately benefit if cooperative and municipal
electric utilities (i) purchased as-needed power from generators who operate in the spot market or (ii) constructed new generating capacity within their cooperative, the commenter understands that these entities operate primarily in rural areas of the country for which new generation is difficult to justify to the local electric utility regulators. Consequen tly, the commenter (994) would agree to support the proposed 40 CFR 63.6640(f)(2) and (4) with the changes outlined above.

Response : The commenter did not provide any informati on to support its sugges tion that operation for DR or peak shaving was acceptable as long as the ope ration was not part of an organized competitive market administered by the ISO or RTO. The comment er did not show that engines participating in ISO/RTO emergency DR programs were not serving to maintain the reliab ility of the electric grid and that operation for that purpose could not fairly be considered an acceptable use for emergency engines.

1.3.3 Comment : One commenter (1001) stated that if the EP A finalizes the rule as proposed or with slight modifications, the EPA should clarify the definition of “emergenc y” in the rule to remove any uncertainty regarding the conditions under whic h RTO could call upon DR resources supported by RICE. The commenter (1001) supports the EPA’s us e of EEA Level 2 plus frequency or voltage
deviations to define wh at should be considered as emergency DR for purposes of allowing RICE to participate in emergency DR programs for up to 100 hrs/yr; however, the comme nter (1001) believes the following definition would provide greater clarity: “owners and operators of stationary emergenc y engines can operate fo r emergency DR during periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an EEA Level 2 as defined in the North American Electric Reliability Corporation Reliability Standard EOP–002–3, Capacity and Energy Emergency (and emergency DR is required) and during periods when the regional transmission aut hority or equivalent balancing authority and transmission operator have determin ed there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or freque ncy (and emergency DR is required).” The commenter (1001) believes the additional language will ensu re the appropriate entity responsible for maintaining reliability is determining when there is an emergency, as well as limiting the operation of stationary emergency engines during emergency DR to onl y those times the resource is called in response to emergency conditions. The co mmenter (1001) further belie ves that the additional language it proposes would ensure the conditions co incide with the manner in which emergency96 procedures are implemented in real-time operation, a nd provide certainty to RICE resources that they would be operating in compliance with the proposed rule if finalized.

Response : The EPA specified in the rule that emergenc y engines can operate for emergency DR when the Reliability Coordinator has decl ared an EEA Level 2 as defined in the NERC Reliability Standard
EOP-002-3. This addresses the comm ent that the conditions under which the RTO could call upon DR resources supported by RICE should be clarified. The EPA does not believe it is necessary to add the phrase “and emergency DR is required” because the first part of the referenced sentence already specifies that the engine must be operating for emergency DR.

1.3.4 Comment : Two commenters (1054 and 1073) said that th e EEA Level 2 alert that was proposed as one of the triggers for when emer gency engines can be used for DR is unnecessarily stringent and may lead to reliability problems in some areas. The comment er (1073) said that this threshold is too late and that load management measures have already be gun before EEA Level 2 has been reached and the system is still in Level 1 alert status. Waiting until Level 2 is decl ared jeopardizes system reliability, according to the commenter (1073) and can result in problems on the local level. The commenter (1073) asserted that “The occasional, temporary use of st andby generation capacity is a key reliability tool that
should not be restricted unnecessar ily.” The commenter (1073) strongly urged the Agency to not define a specific alert condition for the allowed use of em ergency generators for DR conditions. The local system operator is the best entity to determine wh ether or not standby emergency generation is needed during an emergency DR situation, the commenter (1073) said. If the EPA must set a level, then the commenter (1073) recommended that the Agency use EEA Level 1 and actions take during that alert level will help prevent EEA Level 2 from being tr iggered. Commenter 1054 sa id that it was supportive of the voltage/frequency trigger, but also requested that EEA Level 1 be used instead of EEA Level 2. Two commenters (918 and 1043) specifically endorse the language that allow emergency engines to operate for DR purposes when an EEA Level 2 ha s been called. According to the commenter (1043), EEA Level 2 status is rarely decl ared, however, in these rare instan ces that EEA Level 2 is called, procedures are taken very seriously by RTO and transmission operators. Th ere are strict reporting requirements that must be followed in these cases and information must be submitted to NERC about what happened, the cause and steps ta ken to mitigate the situation.97 Response : The EPA does not agree that EEA Level 1 is the appropriate trigger for operation of these engines for emergency DR. The intent of the rule is that the engine s should be operated for emergency
DR when a blackout is immi nent, and the commenters did not provide information to show that an EEA Level 1 alert corresponded with an imminent blackout. The EP A also does not agree that the rule should not define a specific alert conditi on; a lack of a specific conditi on would make the regulation very difficult to enforce and more susceptible to abuse.



### 1.4 Allow Local Balancing Authority to Determine Emergencies

1.4.1 Comment : Several commenters (975, 977, 979, 996, 997, 1003, 1007, 1008, 1015, 1019, 1022, 1024, 1029, 1034, 1035, 1049, 1052, 1056, 1060, 1061, 1078, 1079, 1083, 1097, 1110, and 1111, 1119, 1127, 1150, 1169, 1317, 1318 and 1319) requested that the EPA allow the local balancing authority to determine when stationary emergency engines s hould be operated. Commenters expressed that many systems do not operate under the ISO/ RTO governance and that jurisdiction rarely extends to local small
transmission lines and never extends to distri bution lines. Therefore, commenters made the recommendation that the local balancing authority, tran smission operator, or local distribution system in
these cases should determine when th e electric service is in jeopardy in order to prevent local system failures and maintaining system reliability. One commenter (1056) was concerned with some of the specific language in the proposed rule, and although the commenter (1056) was generally suppor tive of the proposed changes and rationale, the commenter (1056) nevertheless recomme nded that the EPA include situations where the local balancing authority or transmission operator within the electri c system determines that the electric reliability including power quality is in jeopardy. This is nece ssary to add the commenter (1056) said because many of its members do not operate under ISO/RT O governance and instead follow state or local regulatory requirements. In addition, ISO and RTO al erts are triggered based on regional problems with the grid and ISO and RTO jurisdiction rarely if ever covers smaller transmission lines and never extends to distribution lines, the commenter (1056) said. Regi onal grid reliability is e ssential, however, about 42 percent of the nation’s distribution lines are owned by electric cooperatives that serve rural consumers and is managed by the local authority, the commen ter (1056) said. Therefore, the commenter (1056) believes the changes recommended ar e appropriate. Also, the commenter (1056) is of the opinion that the proposed 5 percent voltage or fr equency deviation is not sufficie nt to address rural distribution system operation. Specifically, waiti ng until a 5 percent voltage drop has occurred is too late for many rural electric systems, in the comme nter’s (1056) opinion. For instance, at the point where there is a 598 percent drop at the substation, ther e could possibly be more significan t effects along other segments of long distribution lines, the commenter (1056) said. There is not one lo cation or even several locations where voltage readings are indi cative of overall line stability and in commenter 1056’s opinion, the local/regional balancing authority need s to be able to quickly address these situations in order to prevent the 5 percent voltage sag to occur as opposed to waiting for it to happen at a point on the line. Therefore, the commenter (1056) reemphasized the need to a llow the local balancing authority, transmission operator or local distribution systems to activate emer gency engines as necessary in order to maintain system reliability and power quality. In the comm enter’s (1056) opinion, any such activation should follow a developed emergency operating plan and be according to the expert judgment of the relevant balancing authority or local author ity. The commenter (1056) said that this is consistent with how NERC manages the actions of the local balancing author ities. The commenter (1056) agrees that it is appropriate to include EEA Level 2 alerts as one of th e criteria, but this only addresses half the problem.
The EPA must allow local balanc ing authorities reasonable discre tion to use engines to address emergency situations, DR and load mana gement issues at the local level.

Response : The EPA agrees with the commenters that it is appropriate to include additional situations
where the local transmission and di stribution system operator has determined that there are conditions
that could lead to a blackout for the local area. However, the conditions and language provided by the commenters are not sufficiently specific or narrow su ch that the EPA can be assured that these engines will only be used in emergency situations. For instan ce, some situations may be the result of known lack of capacity or transmission to the local system that can be planned for rather than using emergency engines. The EPA does, however, be lieve that emergency engines can be appropriately used in such situations, if limited to the pr e-existing 50 hour allowance for non-em ergency use and if operation is limited to specified conditions and reporting and recordkeeping requirements are included to prevent abuse. The EPA is also requiri ng that beginning on January 1, 2015, engines engaging in this newly promulgated flexibility only acquire ULSD for use in these engines, given the clear emission benefits
and cost-effectiveness of such fuel . Therefore, in recognition of the unique challenges faced by the local transmission and distribution system operators in rural areas, the EPA is specifying in the final rule that existing emergency stationary RICE at area sources can be used for 50 hrs/yr as part of a financial arrangement with another entity if a ll of the following conditions are met: • The engine is dispatched by the local ba lancing authority or local transmission and distribution system operator.99 • The dispatch is intended to mitigate local transmission and/or dist ribution limitations so as to avert potential voltage collapse or line overloa ds that could lead to the interruption of power supply in a local area or region. • The dispatch follows reliability, emergency operation or similar protocols that follow specific NERC, regional, state, public utility commission or local standards or guidelines. • The power is provided only to the facility itself or to support the local transmission and distribution system. • The owner or operator identifies and record s the specific NERC, regional, state, public utility commission or local sta ndards or guidelines that are be ing followed for dispatching the engine. The local balancing authority or local tr ansmission and distributio n system operator may keep these records on behalf of the engine owner or operator. Engines operating in systems that do not meet th ese conditions will not be considered emergency engines if they operate for these purposes as part of a financial arrangement w ith another entity. In order to mitigate the impacts of the emissions from these engines, the final rule specifies that stationary emergency CI RICE with a site rating of more than 100 brake HP and a displacement of less than 30 l/cyl located at area sources that operate for this pur pose are also required to us e diesel fuel meeting the specifications of 40 CFR 80.510(b) beginning January 1, 2015, except that any existing diesel fuel purchased (or otherwise obtained) prior to Janua ry 1, 2015, may be used until depleted. Owners and operators of these engines are also required to re port the dates and times the engines operated for this purpose annually to the EPA, be ginning with operation during the 2015 calendar year. The report must also identify the entity that dispatched the engine and the situation that necessitated the dispatch of the engine. This information will be used by the EPA, as well as state and local air pollution control agencies, to assess the health impacts of the emi ssions from these engines and to aid the EPA in ensuring that these engines comply with the regulations.



### 1.5 Clarifications/Other

1.5.1 Comment : One commenter (1104) stated the EPA shou ld increase the amount of non-emergency hours in consideration of system maintenance and improved reliability. The commenter (1104) is concerned that the rule does not adequately allow for the use of RICE units for system maintenance under the “emergency” designation. Under the new ru les, according to commenter (1104), they would not be able use “emergency” RICE units when radial lines and transformers periodically have to be taken out of service for routine maintenance, because those functions (i.e., main tenance actions taken to100 prevent a complete outage) do not meet the rule’s “emergency” definition. When such maintenance occurs, the commenter (1104) argued, the local gene ration is the only means of providing power to customers. The commenter (1104) stated that a util ity with a RICE unit can keep power flowing even when disconnected from the larger electric system, and also allow essential public services to continue to serve the community during planned outages and ma intenance conditions, and a sserted that this is another reason why the EPA should increase the num ber of hours allowed for non-emergency use of RICE units beyond the 50 hours currently allowable. Two commenters (1040 and 1041) said they are uns ure what situations would be considered emergency under the current definition and ask that the EPA clarify which situations would be considered emergency and non-emergency under th e rule. The commenters (1040 and 1041) asked for flexibility to use 100 hrs/yr for any re ason and this would resolve the issue.

Response : The commenter did not provide any information to show that an increase of the limit of operation for non-emergency situatio ns is justified. The requireme nts for emergency engines are generally less stringent than those for non-emerge ncy engines, based on the limited operation of emergency engines, and it would not be appropriate to include a provision for increased use of emergency engines in non-emergency situations in the final rule. Operation of these engines resulting
from routine maintenance of other units is not emer gency operation, but instead is operation that can be planned for ahead of schedule and that can and should be met using power sources that are not reserved for emergency use. While the EPA has allowed a ve ry limited allowance of 50 hrs/yr for non-emergency use, further use of these engines in non-emergency situations that can be planned for is not appropriate. Local utilities that wish to use such engines as backup in non-emergency situ ations should meet the requirements for non-emergency engines.

1.5.2 Comment : One commenter (1104) stated that while the proposed amendments would permit revenue generation in context of the allowance fo r peak shaving and other non-emergency use, the current rule’s underlying limitation on the operati on of emergency RICE units to 50 hours for nonemergency purposes that do not generate revenue is pr oblematic as it fails to make a distinction between
activities that are undertaken for re liability purposes, but which also ge nerate revenue, and activities that are undertaken for purely economic purposes. Additionally the comme nter (1104) believes that the current rule’s concept of “receiving revenue” is vague. The commenter (1104) asserted that if a municipal utility “sells” its BTM generation as ca pacity to the RTO under the emergency DR program,101 it receives credit for the capacity, but that credit simp ly offsets the capacity payment that the municipal utility is charged for its load. The commenter (1104) urged the EPA to permit such capacity payments to units that are participating in such RTO programs.

Response : The commenter did not provide any information about the type of use the engine is operated for when receiving the capacity payment, or any justification that it woul d fairly be considered appropriate emergency use of the engine.

1.5.3 Comment : One commenter (1104) stated that because of the relatively narrow definition of “emergency” under the rule, many RICE units that pe rform critical functions to local municipalities appear to be captured by the rule, perhaps inadve rtently. For example, commenter (1104) noted that RICE units are often used at local water plants and wastewater treatment plants , and as aids to start up larger EGUs following maintenance outages or to start intermediate or peak load combustion turbines,
and are essential to the continued sa fe operation of the facilities they s upport, which in turn are essential to the health, safety, and public welfare of local citizens. The co mmenter (1104) asked that the EPA consider the following options: (1) include such critical health and safety functions under the “emergency” definition of the rule, (2) create a new cl assification for these critical units to allow them to operate without modification, or (3) increase the hours of operation for units that are currently classified as “non-emergency” under the rule.

Response : The commenter did not provide any detail about the usage of th e engines at local water and wastewater treatment plants and whether or not the use was limited to emergency situations. The rule specifies that emergency engines can be used for up to 50 hrs/yr for non -emergency situations, so to the extent that the engines are needed for non-emergency purposes, there is already an allowance for that in the rule, as well as for engines used to start up com bustion turbines. The EPA needs to assure that it does not allow emergency engines (subject to less stri ngent requirements) to be used for general nonemergency purposes. General use engines need to meet the requirements fo r general use engines.

1.5.4 Comment : One commenter (1104) stated that th e EPA has not adequately understood the circumstances leading up to or following various el ectrical system emergencie s that tend to involve RICE units. For example, commenter (1104) stated that an “emergency” should not be limited to a network outage, but should also include actions take n by RTOs or local operators to prevent outages,102 even if local operators get compensated for this service. The commenter (1104) believes that an expansion of the conditions or circumstances of emergency would better enab le compliance with the new rule by allowing the municipal ut ilities (and other electric utilities) to run their units to address critical local and regional elect ric system stability issues.

Response : The commenter did not provide any detail regard ing the actions taken by system operators to prevent outages. The final rule provides for situations where the RTO has taken measures to prevent an outage through the use of emergency DR in EEA Level 2 situations.

1.5.5 Comment : One commenter (1002) asked the EPA to c onsider a provision for use during extreme temperature conditions because these are critical t imes when limitations on emergency generator use could endanger human health and welfare and should not be considered when counting hours against the 50/100 hours allowance. Two commenters (1023 and 1025) also requested flexibility in defining “nonemergency activities” such as weather-related emergenc ies, downed power poles or frayed transmission
lines. Commenter 1023 and 1025 said that it is unclear whether such situations would be considered emergency or non-emergency and said it was not clear on what type of non-emergency operation would fall under the permitted 50 hrs/yr.

Response : The EPA is unclear how the commenters’ concer ns are related to emergencies. Emergencies are based on the ability to access other power and wh ether the system is in severe distress. Extreme temperature conditions may or may not coincide with such power emerge ncies and the EPA cannot allow a catch-all provision for weather that has no specific relation with th e emergency conditions requiring emergency engine use. The commenters did not argue that they are unable to put on aftertreatment on their engines and unless there are feasibility issues related to the concerns the commenters bring up that were not mentioned, these e ngines could be equipped w ith aftertreatment and meet the non-emergency standards in the rule and ope rate without hour limitati ons. So regardless of the situation, again, use of these engines outside of clear emergency parameters can be accomplished by meeting the requirements fo r non-emergency engines. The EPA has fairly specific definitions for what is an emergency situation and what nonemergency situations meet the restrictions for th e 50 hour allowance. The final rule includes a clear definition of stationary emergency RICE in §63.6675 and the specific criteria emergency engines must meet in order to remain being considered an emergency engine are in §63.6640(f) of the RICE103 NESHAP, and in §§60.4211(f) and 60.4243(d) of the CI NSPS and SI NSPS, respectively. While the EPA cannot have provisions that specify every potentia l situation, it is possible for operators to contact permitting authoritie s in unclear cases.

1.5.6 Comment : One commenter (1102) said that the rule s hould ensure that the definition of emergency is precise and limited to true emergency events, such as power outages and voltage or frequency deviations. The commenter (1102) e xplained that in a true emergenc y, add-on controls using a catalyst take time for the engine exhaust to reach optimal temperatures for pollution abatement to occur, and emergency engines intended to be operated unexpectedly and rarely should not be forced to install addon controls. However, the commenter (1102) concl uded, the same considerations do not apply during times that are not true emergencies.

Response : The EPA agrees with the commenter and has made the definition as precise as possible and is limited to emergency events.

1.5.7 Comment : One commenter (1004) did not i ndicate that it was in favor of or against the proposal to allow 100 hrs/yr for emergency DR and is neutral on the specific number of hours emergency engines should be allowed to operate for DR or peak sh aving. However, the commenter (1004) is strongly against increasing the number of hours in the final rule allowed for non-emergency purposes.

Response : The final rule does not increase the number of hours allowed for non-emergency purposes.

1.5.8 Comment : One commenter (1043) indicated that it is very supportive of the language proposed by the EPA in §63.6640(f)(2)(i), specifically the language th at allows emergency stationary RICE to be operated for maintenance checks and readiness tes ting, provided that the tests are recommended by a number of different entities including the “regiona l transmission authority or equivalent balancing authority of transmission operator.” In the comm enter’s (1043) opinion, the latter quoted part of the language will make it clear that the audits required for DR programs ar e approved under this section of the rule (and in the NSPS) and ar e allowed under the 100 hrs/yr limit.

Response : No response necessary.104 1.5.9 Comment : One commenter (969) said that the states that assume primacy over the program be allowed, through rulemaking, to permit the use of emergency generators, at a minimum, a full 100 hours to include DR, peak shaving as well as testing and maintenance. The commenter (969) is concerned that the extreme air temperatures in their region can cause energy generators to be used more frequently. The commenter said that the proposed 50 -hour limit is not compat ible with past experience that has shown that more hours may be needed dur ing extreme weather conditions.

Response : The EPA does not agree with the commenter that it would be appropriate to delegate the authority to set the standards to entities besides th e EPA. It is the EPA’s authority to set emission standards under the CAA and all those who imple ment enforcement authority must be bound by the standards the EPA promulgates.105 

### 2.0 Peak Shaving Allowance of 50 hrs/yr

2.1 General Support or Opposition to Proposed Peak Shaving Allowance

2.1.1 Comment : Several commenters (872, 873, 876, 879, 902, 909, 914, 915, 916, 918, 941, 942, 945, 947, 950, 951, 952, 956, 960, 967, 969, 970, 971, 975, 976, 985, 986, 988, 989, 995, 997, 999, 1003, 1007, 1008, 1014, 1015, 1017, 1018, 1019, 1021, 1022, 1023, 1024, 1029, 1034, 1035, 1039, 1040, 1041, 1043, 1048, 1049, 1052, 1053, 1056, 1059, 1060, 1061, 1064, 1073, 1079, 1082, 1091, 1110, 1111, 1113, 1118, 1119, 1128, 1143, 1146, 1196, 1326, and 1457) indicated that they are supportive of the temporary allowance to permit emergency engines located at area sources to spend 50 hrs/yr towards non-emergency operation, including peak shaving. One commenter (1128) asked that the allowance be extended to major sources as well. With respect to work practices for peak shav ing at area sources, one commenter (1082) asserted that the EPA is authorized to prescribe GACT rather than MACT for such sources. Work practices, the commenter (1082) stated, clearly constitute GACT fo r area source engines used for a limited amount of peak shaving in any given year. One commenter (1082) supported the proposed new provisions authorizing affected engines to ope rate up to 100 hrs/yr for emergenc y DR purposes without triggering a requirement to install aftertreatme nt on the affected units; and author izing operation for up to 50 hrs/yr for peak shaving without triggering a requirement to install aftertrea tment on the affected units if done as part of a peak shaving or load management progr am with the local distribution system operator. The commenter (1082) stated it is appropr iate for the EPA, when setting MA CT standards, to anticipate the potential effects of the standards on grid reliability. The commenter (1082) agreed that a requirement to install aftertreatment likely would cause many affected sources to deci de to opt out of DR programs or even to shut down their affected engines given the high cost of installing and operating such systems and the relatively low utilization of the engines that would be covered by the proposed provisions. The commenter (1082) stated this could have a detrimental impact on grid reliability, especially in systems served by its members, where local generating assets tend to be much more limited as compared to the larger systems typically supported by investor owne d utilities. Also, according to the commenter (1082), the proposed allowances for emergency DR and peak shaving are narrowly tailored such that these engines will continue to be available to support grid reliability, ye t should not be expected to have any significant impact on health or the environment gi ven the very low operating hour caps. The commenter (1082) added that the EPA has ample authority to adopt the proposed provisions. The commenter (1082) stated that the language proposing to allow utilities to apply the 50 hrs/yr currently allowed under106 §63.6640(f) for non-emergency operation towards any type of non-emergency operation, including peak shaving and non-emergency DR, is nece ssary relief for certain situations that will inevitably occur as a result of the new EPA steam electric generating units rule set. The commenter (1082) asserted that due to their high cost of operation, many utilities have little financial incentive to run their RICE units unless absolutely necessary. The commenter (1082) believes that in the next 5 years peak shaving will be needed to alleviate the volatile pricing and energy s carcity situations that are likely going to occur in certain parts of the United States. The commenter ( 1082) further believes that the proposed runtimes allotted under the proposed rule will now meet th e minimum standards set forth by various RTO and the emergency needs faced on-the-grou nd by public power utilities. The commenter (1082) stated the EPA is justified in increasing non-emergency hours in cons ideration for distribution system maintenance and local system reliability. The comment er (1082) asserted that public pow er systems also use RICE units for support during critical transmi ssion and subtransmission (distribu tion system) system outages. As such, the commenter (1082) is concerned that the new rules will preclude the use of emergency RICE units for line maintenance and believes the EPA’s propos ed language alleviates some of these concerns. The commenter (1082) believes the cu rrent rule limiting emergency RICE units to 50 hours of operation for non-emergency purposes that do not generate revenue is too problematic to be implemented without high additional cost to normal operations. The commenter (1082) argued that without the EPA’s proposed changes, they might not be able to us e emergency RICE units when radial lines and transformers periodically have to be taken out of service for r outine maintenance. When such maintenance occurs, the commenter (1082) explai ned, the local generation is the only means of providing power to customers; othe rwise, the local distribution sy stem would go dark. The commenter (1082) stated that using RICE for planned maintena nce is a key reason it supports the increase in the number of hours allowed for RICE engine non-emergency use. Commenters 872, 873, and 879 agreed with the EP A’s conclusion that by not allowing engines to also participate in non-emerge ncy or peak shaving would lead to larger environmental and public health impacts due to an increase in central power station capacity and possibly more transmission and distribution line capacity to accommodate the incr ease in demand resulting from eliminating small emergency engines from being used. Commenter 1064 sa id that peak shaving and emergency DR are both valid emergency use. Commenter 1143 agreed that the allowance will have significant environmental and reliability benefits by providing important grid support while sources are coming into MATS compliance. The commenter (1143) also believes the 50 hrs/yr allowance will cause no environmental impact since it is contai ned with the 100 hrs/yr allowance.107 One commenter (1043) said that as investments are made to reduce peak electricity demand, this will lead to less constraints on the electric grid and therefore lowering the need for emergency DR. Therefore, commenter 1043 stated, as future investments are made , the amount of time emergency engines are needed in the future to address electric ity peak shaving and grid stability should decrease. One commenter (876) stated they participated in a Burlington Elect ric Department (BED)
initiative to reduce electrical de mand associated with peak-load times. When notified by BED, the commenter (876) eliminates all non- essential electrical usage (such as redundant hallway lighting and air conditioning in non-patient care areas) and goes onto emergency generator power. The commenter (876) stated that the financial impact of this prog ram is significant, because they are able to avoid thousands of dollars worth of p eak surcharges, and also get reim bursed by EnerNOC for their load curtailment and DR actions at nearly $80,000 last y ear. The commenter (876) also stated that this program also reduces the need for Vermont utilitie s to purchase very expensive power at peak times from the already taxed and primarily non-renewably-generated regional grid. One commenter (947) said that backup diesel generators are an important component in communities’ response to power supply emergencies su ch as storms. Several of the commenter’s (947) members that use these generators under the pe ak shaving program are schools or key community centers, which serve as emergency shelters during such events. The commenter (947) added that the peak shaving program has made it possible to afford these expensive emergenc y backup systems, but the financial feasibility is very limite d and cannot withstand more cost. According to the commenter (947), the cost benefit ratio realized when requiring the retrofit of expensive emission control systems on systems that operate only a few hun dred hrs/yr is poor investment of members’ limited financial resources. The commenter (947) asked if the EPA calculations were based on these limited operating hours. The commenter (947) concluded that mandating rules that cause members to exit peak shaving programs will not only disadvantage co-op members, but will also curtail their ab ility to use renewable

resources. One commenter (1113) described concerns that reliability issues ma y be disproportionally experienced in their region, where the vast majority of generation capacity is coal-fired and that efforts to provide additional generation resource options is appreciated. In contrast, several commenters (961, 1067, 1072, 1076, 1077, 1099, 1101, 1102, 1122, 1123, 1125, and 1134) are strongly against the allowance to permit emergency engines located at area sources to spend 50 hrs/yr toward economic DR activitie s. Commenter 1076 said th at this inclusion is inexplicable, arbitrary and capricious. Commenter 1134 added that this is a new exemption, which108 allows emergency engines to participate in economic DR for 50 hrs/yr, a provi sion that was not even contemplated in the 2010 rule or in the DR aggr egators’ petition for reconsideration of the rule.
Commenter 1101 asserted similar statements and said that these amendments would lead to increased HAP emissions, harm public health, and discourage investments in clean energy. The commenter (1101) also argued that these amendments are indefensible because the EPA has not justified the rule because there is no quantitative data on the amount of engines that would be affected, where these engines are located, and how often the engines are operated. Co mmenter 1067 said that p eak shaving and similar programs do not address emergency conditions and only result in econom ic benefit for the participant
and the rule should not allow these e ngines to operate without controls. Two commenters (1076 and 1123) sa id that this allowance is not needed and commenter 1076 added and that the EPA provides no evidence to the contrary, and the commenter (1076) does not agree with the Agency’s logic that if the 50-hour allowan ce is not appropriate in the future, i.e., past 2017, it would not be needed or appropriate now either. The alternative methods to peak shaving that the EPA refer to are readily available and should be take advantage of, the commenter (1076) said. Commenter 1099 said that the EPA has not provided an adequate basis supporting that the allowance would lead to increased system reliability, a complete analysis of the harmful environmental impacts, and support that the proposal would lead to a decrease in the total costs to consumers. The proposed allowance, would, according to commenter 1099, result in an increase in emissions because it will displace cleaner energy resources and would discourage the use of DR resources that actually curtail lo ad rather than plainly shifting from grid-source power to BTM generation. The allowance is not necessary for electric reliability, as stated by the Agency, who has also otherwise indicated that MATS would not create reliability problems, the comment er (1134) stated. The commenter (1134) cited to a fact sheet 36 published by the EPA that indicated that 4.7 gigawatt (GW) (less than one half of one percent) would retire out of more than 1,000 GW of the nation’s ge nerating capacity as a result of MATS. Also, the commenter (1134) noted that the EPA has recognized th at there are sufficient other currently available options to replace the generating capacity that woul d retire due to MATS. Commenter 1101 agreed that the only justification the Agency has offered, i.e., that electric reliability c ould be compromised, is contradicted by the record. Comm enter 1123 argued that even though the EPA could argue that the 50

36 EPA, Fact Sheet: Mercury and Air Toxics Standard s, Clean Air and Reliable Electricity, at 1 (2012), available at: http://www.epa.gov/airquality/powerplanttoxics/pdfs/20111221MATScleanairreliableelectricity. pdf; see also 77 Fed. Reg. 9407.109 hrs/yr exemption is appropriate and needed for rura l areas, the Agency has not explained why such an exemption is necessary on a nationwide basis and the broad exemption has not been justified. One commenter (1102) said that it is inappropriate to facilitate the operation of engines for peak shaving operations without appropriate controls for any period of time when it is possible that those uncontrolled engines may displace generation that ha s incurred the cost of appropriate emissions controls. According to the commenter (1102), this “rewards” the owner or operator of uncontrolled engines, results in increased emissions on poor air qua lity days and delays in stallation of emission controls or the construction of new generation m eeting more restrictive e missions limitations. The commenter (1102) said that the EPA’s statement th at facilitating peak shaving is needed to add flexibility to the electric generati on industry’s ability to meet the d eadline to comply with the EPA’s
NESHAP from Coal and Oil-Electric Utility Steam Generating Units. However, the commenter (1102) noted that the preamble to that NESHAP stated that the EPA believes that the impact on reliability of the coal and oil electric utility NESHAP will be very small or nonexistent. According to the commenter (1102), the EPA appears to be less sure that other promulgated EPA regulations will not impact electric grid reliability and is willing to expand the operation of engine s with relatively uncontrolled emissions to help address the uncertainty. The commenter (1125) said that the excess emissi ons resulting from this peak shaving allowance would be problematic for Connecticut and other st ates with marginal ozone non-attainment areas. According to the commenter (1125), these areas face a 2015 attainment deadline and should not be subject to an additional emission burden as they strive to reach timely attainment. One commenter (1125) said that a broad use of emergency engines for non-emergency purposes is evidence of poor energy planning policies by a re gional system operator and should be discouraged. The commenter (1125) added that DR can be met successfully with highly cost effective energy programs, even on HEDD.

Response : The EPA received some comments supporting the proposed limited temporary provision for peak shaving, while other commenters opposed the provision. The EPA has considered all of the comments, and agrees with the comme nters who indicated that it would not be appropriate to include a limited temporary provision for peak shaving. As noted by the comment ers, operation for peak shaving does not fairly come under the definition of emergency use as it is designed to increase capacity in the system, rather than responding to an emergency situation such as a bl ackout or imminent brownout. The EPA believes that peak shaving activity and other activities designed to increase capacity should be110 treated as part of long term capac ity planning, not as use akin to em ergencies. The EPA agrees with commenters who state that allowance for emergency engi nes to be used for peak shaving could well lead to increased use of these engines, particularly in situations that ar e not emergency situations. The EPA also agrees that use of internal combustion engines for peak shaving is not based on emergency use, but instead is generally based on the economic benefit ga ined by operating the engine rather than another power source. The EPA agrees with the commenters that there is not sufficient information on the record to show that these engines are needed to maintain reliability while facilities are coming into compliance with MATS, and the commenters who supported the limited tempor ary provision did not provide
information to show that MATS would cause reliabili ty issues that necessitate the operation of these engines. The EPA believes that given this informa tion, it is appropriate to treat use of internal combustion engines as peak power units, not as emergency use, but as normal power generation, and thus believes it is appropriate to require emissions aftertreatment re quirements (or similar controls) for engines engaging in these activities for compensation. Regarding the commenters who indicated that the operation of the engines should be allowed during pl anned maintenance of lines or transformers, the EPA notes that the engines could be used for this purpose under the 50 hours already specified in the rule for non-emergency use.

2.1.2 Comment : One commenter (943) noted that emergency e ngines located at major sources have been
excluded from the 50 hour allowanc e for peak shaving and DR. Commenter 943 believes that the EPA should not exclude RICE at major sources from this allowance. One commenter (991) said that the EPA should not eliminate the provision allowing new emergency RICE located on ar ea sources of HAP to be used up to 50 hours in non-emergency situations. The commenter (991) said that this is a significant change and is inconsistent with the f act that the proposed rule allows both new and existing emergency RICE on major HAP sources to use the limit, but only by existing emergency RICE on area sources. The commenter (991) recommended that instead of addressing major sour ces of HAP in §63.6640(f)(3) and area sources in §63.6640 (f)(4), paragraph (f)(3) should provide the 50-hour allowance to all new and existing units at both major and area sources of HAP and para graph (f)(4) can provide the new temporary peak shaving allowance to existing stat ionary RICE located on area sources. The commenter (991) added that the EPA should correct a related cross reference in the definition of emergency stationary RICE in §63.6675. The commenter (991) provided suggested regulatory text for these changes.111 Response : The EPA is not finalizing the proposed allowan ce for peak shaving and is not allowing peak shaving at all anymore. Therefore, there is no in consistency. However, note that engines at major sources and new engines are subject to more stringe nt requirements under the law than existing engines at area sources, and there are flexibilities one can a llow for existing engines at area sources that cannot be justified for new engines or engines at major s ources. Also, to clarify, the EPA did not allow new or existing engines at major sources to peak shave at proposal. The June 7, 2012, proposal only proposed a temporary provision for existing stationary emergency engines located at area sources to operate for 50 hrs/yr for non-emergency operati on towards any non-emergency opera tion, including peak shaving. The proposed provision in §63.6640(f) (3) for major sources did not allow peak shaving and the proposed allowance in §63.6640(f)(4) was only for existing area so urces. Neither proposed allowance allowed any new engines to peak shave.



### 2.2 Revisions Needed to Peak Shaving Operational Period

2.2.1 Comment : Although commenters 872, 879, 902, 937, 939, 943, 947, 967, 971, 975, 997, 1003, 1007, 1008, 1014, 1015, 1019, 1021, 1022, 1024, 1025, 1034, 1035, 1037, 1038, 1039, 1040, 1041, 1045, 1049, 1052, 1059, 1060, 1061, 1063, 1065, 1072, 1079, 1078, 1083, 1097, 1110, 1111, 1118, 1128, 1129, 1138, 1196, 1315, 1326, and 1445 were generally supportive of the proposed peak shaving allowance, they asked that 100 hrs/yr be provided fo r emergency engines be allo wed to be used for any purpose. Others (967, 969, 971, 988, 995, 1023 and 1025) said that there was no reason for the EPA to limit load management operation to 50 hours. Some commenters (969, 1023, 1025, 1037 and 1072) said
there is no difference in HAP emissions from the various uses and that the EPA indicates no adverse health or environmental impacts from operating up to 100 hours. Ac cording to one commenter (1063), emergency RICE operated for peak shaving do not have materially different emission rates than emergency RICE operated for DR or some other non-emergency operation, and any difference in emissions, assuming it exists, has not been incorporated into the EPA’s analysis of the rule’s costs and
benefits. One commenter (1072) added that the distinctio n between area sources and major sources in allowing peak shaving for emergency engines is conf using because an emergency engine can exist at either source type and both source types already have the allowance of 100 hours of non-emergency operation in the current rule. One commenter (1037) said that allowing flexibility under the 100-hour cap would address gaps in the definition of emer gency use faced by operato rs. One commenter (1063)112 added that the additional complexity of the prop osed approach is significant, and these specific limitations create an unnecessary risk of non-com pliance because the individual requirements for maintenance, DR, peak shaving, and other non-emerge ncy operation do not change the basic fact that the EPA allows emergency RICE up to 100 hrs/yr for non-emergency operation, and unlimited operation during emergency situations, and the emissions associated with this level operation. Commenter 960 requested that the proposed allo wance for peak shavi ng or non-emergency DR in §63.6640(f)(4)(i) instead be included within the a llowable types of operation in §63.6640(f)(2). The commenter (960) recommended that those two types of operation would count toward the 100-hour total limit for emergency engines (until April 16, 2017), but would not have a 50-hour limit on its own. In the commenter’s (960) opinion, this would be particularly useful for sources in New England to provide operational flexibility and contractual compli ance during the 2012-2017 transitional period. The commenter (960) explained that engine electric c ontribution to the grid is conducted under various agreements, which may require the engine to act to stab ilize the grid, serve load in an outage, serve load in a capacity deficiency, or serve non-emergency load during periods of high demand. Therefore, a current financial agreement with IS O-NE may require the engine to serve for different purposes such as either EEA Level 2 emergencies, 5 percent voltage drops or for non- emergency peak shaving or load management. For that reason, it woul d be helpful to be allowed a ll such operation within a 100-hour total limit, until the propos ed allowance expires in 2017, according to the commenter (960). Although commenter 988 expressed support for the proposed peak shaving allowance, it does not believe the 50 hrs/yr is sufficie nt for load management activities and believes that the EPA can and should do more for load management activities that provide an economic benefit to the poultry industry. Particularly the commenter (988) fe lt this is justified because EP A’s analysis has shown no adverse human health and environmental impacts ba sed on operation for up to 100 hrs/yr. Commenter 914 is in favor of the peak shaving al lowance, but requested that the EPA provide a total of 300 hrs/yr for all emergency use. Commenter 916 said that in it s experience participation in peak shaving programs can require the engines operating for more than 50 hrs/yr and therefore asked that the peak shaving allowance be set at 200 hrs/yr. The comme nter (916) argued that 50 hrs/yr will increase the burden for operators and expose owners to the risk of accidental non-compliance and speculated that some owners might abandon their load management programs and give up the compensation they could have received in exchange for ease of operation and peace of mind. However, the commenter (916) said that rural electric cooperatives rely on these engines to reduce demand during high usage times.113 Commenter 909 said that it operates several engine s for non-emergency DR and that this change is needed. However, according to the commenter ( 909), most non-emergency DR programs require that engines be available for 1 percen t of the total possible operating ti me, or 88 hrs/yr. Therefore, the commenter (909) asked that the EPA either includ e non-emergency DR within the current 100 hrs/yr allowance and permit engines to be run for any reason or alternatively increase the 50 hrs/yr to 88 hrs/yr. One commenter (1146) said that the peak shaving a llowance should be increased to 250 hrs/yr, which it believes reflects the realities of peak shaving ope rations because of high summer temperatures and drought conditions. Commenter 918 asked that the 50 hrs/yr for peak shaving be made part of the total 100 hrs/yr that could be used fo r other purposes. Commenter 1118 stated this would add flexibility to help minimize electricity costs a nd increase reliability without adve rsely impacting the environment or health. Commenters said that the EPA has provided no justification why this pr ovision is limited to 50 hrs/yr, as opposed to allowing 100 hrs/yr. One commenter (950) requested that, if it is not possible for the EPA to allow for 100 hours of emergency use per year, with no suns et date, that the EPA allow engi nes involved in non-emergency DR be added to listed exemptions if 1) compensation is limited to reim bursement of operating, maintenance and repair cost, 2) standby and/or emergency gene ration is otherwise required by a recognized national safety code or governmental statut e, rule, regulation, or policy, based on facility use or occupancy; and 3) actual dispatching under the non-em ergency program is not likely to result in greater than 50 hours of run-time solely for non-emergency purposes. This commenter (950) stat ed that, if the EPA does not change the regulation in a manner similar to what it recommends, several of the commenter’s (950) engines would no longer be able to participate in th e Xcel Demand Side Management Program that these engines are enrolled in due to their contract term s and conditions. Under cont ract terms and conditions, where their generators need to be available up to 88 hrs/yr, the owner and operator would be required to do engine upgrades of the NESHAP to meet contract commitments.

Response : As discussed in the RTC 2.1.1, based on public comments, the EPA determined that it would not be appropriate to finalize the limited temporary provision for peak shaving. As discussed in the RTC 2.1.1, operation for peak shaving and load management does not fairly come under the definition of emergency use. Peak shaving and lo ad management are not limited to emergency situations and can be used to increase load during peak periods of power use. Engines used for p eak shaving are part of general power management and should not qualify fo r treatment as emergency engines. While engine emissions do not change based on how they are used, an increase in the types of situations where use is114 permitted will logically lead to increased use of these engines, and the comments indicate that many engines are used specifically for peak shaving. Gi ven that the EPA has pr omulgated less stringent requirements for emergency engines, for reasons specifically related to the emergency use of such engines, the EPA must ensure that the uses of thes e engines fairly comports with emergency use, and that uses of these engines do not migrate into gene ral uses, particularly uses to increase non-emergency generating capacity. The EPA is allowing use of em ergency engines for more limited non-emergency use designed for local transmission or distribution limitations, subject to specific reliability, emergency or similar protocols, and promulgating require ments for reporting and use of ULSD in such circumstances. See RTC 1.4.1. Therefore, the EPA does not agree with the commenters that the provision for peak shaving operation should be e xpanded, for example to 100 hours or more or to engines at area sources. Sources th at wish to engage in peak shaving or other non-emergency capacity uses may do so by meeting the require ments for non-emergency engines.



### 2.3 Relation to MATS Rule

2.3.1 Comment : One commenter (1072) said that it is not appropriate for the EPA to modify the NESHAP for stationary CI engines to address the reliability issues resulting from the MATS rule. The commenter (1072) added that the EPA’s proposed tempor ary allowance for peak shaving is not likely to
have the benefit that the EPA cl aims. Instead, the commenter (1072) said, the EPA should grant the petition for reconsideration on the MATS rule submitted by the Texas Attorney General’s Office on
behalf of the Texas Commission on Environmental Quality, the Public Utility Commission of Texas, and the Texas Railroad Commission. The commenter ( 1072) added that stationary emergency engines in Texas are authorized by 30 TAC s ection 106.511, which would require sources to obtain a separate permit to operate under the proposed peak shaving provisions. The commenter (1072) does not expect that many companies would pursue a new permit aut horization for an opera tion that would only be allowed for emergency engines for a short time under the EPA’s rules. The commenter (1072) concludes that the allowance for peak shaving under the rule will not provide any signifi cant relief for strain on electric reliability that may be caused by retirements and outages in the coal and oil-fired EGU fleet resulting from the MATS rule. Commenter 961 also believed that the tempor ary limited allowance the EPA has proposed for stationary emergency engines for peak shaving purposes is unnecessary in order to reach MATS compliance. The commenter (961) argued that the 3- year window for MATS co mpliance is reasonable115 for large coal and oil-fired power plants consideri ng the complexity of inst alling multi-million dollar control equipment at those facilities. However, for small stationary di esel-fired engines covered by the RICE NESHAP, commenter 961 said that the steps involved are a lot less complex and do not require years to implement. The commenter (961) further pointed out that as opposed to the MATS compliance schedule, the 2013 deadline under the RICE NESHAP would not force owners and operators of stationary engines to comply or shutdown since the engines would continue to operate these BTM engines for true emergency situations until it is decided to install environmental controls.

Response : The EPA agrees with the commenters that a limited temporary allowance for peak shaving does not appear to be necessary for MATS complia nce, based on public comments. However, the EPA does not agree with commenter 1072 that it would not be appropriate to consider the impact of MATS on the operation of stationary engines. Comments rela ted to petitions for reconsideration of the MATS rule are outside the scope of this rulemaking.



### 2.4 April 2017 Expiration Date

2.4.1 Comment : Several commenters (872, 873, 879, 902, 909, 916, 918, 937, 939, 943, 947, 950, 956, 967, 971, 975, 977, 978, 979, 981, 984, 988, 995, 996, 997, 1003, 1007, 1008, 1014, 1015, 1017, 1019, 1021, 1022, 1024, 1027, 1034, 1038, 1039, 1041, 1052, 1053, 1055, 1056, 1059, 1060, 1061, 1072, 1073, 1078, 1079, 1082, 1083, 1097, 1104, 1110, 1111, 1118, 1119, 1127, 1128, 1138, 1148, 1149, 1150, 1169, 1315, 1317, 1318, 1319 and 1326) said that the suns et provision should not be included in the final rule. One commenter (1082) stated that the EPA should extend the final compliance deadline for the RICE rule to provide suffic ient time to retrofit RICE units, es pecially those located in rural and isolated locations, as the rule is not likely to be finalized until a fe w months prior to the original May 2013 compliance deadline. The commenter (1082) asse rted that due to the ongoing modification and refinement of the rule, particul arly the guidelines for the operati on of those engines designated as emergency units, it is nearly impossibl e for utilities to make decisions on how to comply with the rule in less than five months. The commenter (1082) sugge sted that the EPA should provide a 17-month extension to the RICE rule compliance deadline to help bypass the winter and summer peak times, give small utilities adequate time to comply with the ne w requirements, and give u tilities adequate time to follow their city budgeting process.116 Commenter 916 stated that terminating the a llowance in 2017 does not account for investments made in stand-by generation, which is expected to have a useful life of 20 or more years and the participation in a peak shaving programs may be f actored into the business plan during that initial investment. The commenter (916) be lieves that eliminating this allo wance will burden many owners that have 10 or more years remaining of useful life on their engines and not useful options. The alternative of installing add-on controls and associated complia nce measures needed are cost prohibitive, the commenter (916) said, consequently penalizing owners of engines that are about 10 years old more so than owners of older, worn-out engi nes that can be traded in for new certified engines to be compliant. The commenter (916) said the peak shaving allo wance should be extended until April 16, 2027 allowing for greater fairness in bringing peak shaving engines into compliance. Several of these commenters (1110, 1111, 1150, 1169, 1317, 1318, 1319 and 1447) stated that a 100-hour allowance should be made permanent. On e commenter (1149) stated that these programs benefit the electric utility and the participating units, and also benef it electric customers (particularly industrial and commercial customers) by providing predictability that electric generation is available during peak demand. One commenter (1149) stated it is crucial for businesses to have assurance that their electricity supply will not be disrupted even during peak demand times. With the EPA’s expectation that the allowance for this provisi on will not increase emissions, the commenter (1149) believes there is no justification for the EPA to sunset this practice given the bene fits to all parties. One commenter (1118) stated that if these peak shavi ng programs were eliminate d, cooperatives would be required to invest in additional generation resources to meet peak demand and possibly transmission and
distribution resources. The commenter (1118) asserted that this incr ease in costs would be passed along
to the end consumer. Similar to several other commenters, commenter 1056 thought that the 100 hrs/yr should be able to be used for all DR, load management or non-emergency use without the 50 hour limitation and without any sunset. The commenter (1056) indicated that it could not find any rationale supporting limiting this provision to 50 hrs/ yr and having the provision expire in 2017. The problems will still remain beyond 2017 and the commenter (1056) felt the sunset provision is arbitrary. Based on information available in the docket, commenter 1 056 does not believe there is any support for treating load management differently than emergency units operations that justifiable receive up to 100 hrs/yr
without the need for add-on controls or to sunset economic DR after 2017. The commenter (1056) feels that the EPA overly emphasizes the financial connec tion between the engine consumer owner and the local utility as a justification to only temporarily allow peak shavi ng. The commenter (1056) argued that117 there is little if any financial gain available for owners ofengines limited to 100 hrs/yr of nonemergency operation, and actually these units typically operate well below the hour limits, just as the
EPA discussed was the case for DR engines, often as little as 1 to 2 hours per month. According to the commenter (1056), the financial benef it to the owner of the engine is highest when the engine is not operating. The commenter (1056) indicat ed that two of its members had stated that th eir break point where the customer begins to outright lose any financ ial benefit gained from th e reduce rate is around 45 to 55 annual hours, mostly dependent on the cost of diesel fuel. So according to commenter 1056, consumers and the cooperatives have disincentives to use engines for increased annual operation and may in fact lose money the more they run thei r engines, not the other way around. Most cooperative customer-owned RICE are infrequently used, but they ar e critical assets to ensure electrical reliability in rural areas and the only economic benef it is related to the ability to offset the cost of their emergency generators through reduced utility bills, commenter 1056 said, and emphasized that it is not advocating for load management use beyond what would be needed to address local power needs. As an alternative, commenter 1056 suggested that the proposed allowance for emergency engines to be used for 50 hrs/yr for non-emergency use after the 2017 sunset be revised to 100 hours for non-emergency to include load management except wh ere the engine generation is distributed to the electric grid. The commenter (1056) argued that ther e is a difference between engines used to supply power to the grid as opposed to engines providing power to the entity itself, and that it is likely that engines supplying power to the grid are generally larg er than engines providing power at a single facility and therefore engines providing power to the grid could potentially have hi gher emissions. For these reasons, the commenter (1056) believe s that this alternative to li mit operation to off-grid operation would ensure that financial gain associated w ith non-emergency engines under the 100 hour cap would be significantly limited. One commenter (1148) stated that some larger utilities with coal plants might be making significant changes and have many baseload coal units offline or converting to gas, leading to more RICE units being called upon during the transition time of 2015-2017. With so much regulatory compliance having to take place in this timeframe, the commenter (1148) requested that the Agency eliminate the sunset in the proposed rule that would end the use of RICE units for peak shaving in 2016. One commenter (1082) stated that the EPA s hould eliminate the proposed April 17, 2017, sunset date on the provision allowing up to 50 hours of use of emergency units for peak shaving, as a 17-month extension in compliance time for the final RICE regulation is consistent with the original final rule’s time provided for actual insta llation of the new equipment.118 One commenter (956) asked the EPA to allow addi tional time for utilities and their customers to implement the proposed rules relate d to DR programs, particularly the April 2017 temporary provision. The commenter (956) stated that utility customers w ill require adequate time to determine a course of action related to the new regulations based on the ec onomic and technical feasibility of their options. The commenter (956) stated that if additional costs and operational burdens are imposed on emergency generators, a significant portion of emergency genera tors might discontinue pa rticipating in the DR program, which would limit the commenter’s (956) capab ility to use this resource to maintain system reliability. The commenter (956) concluded that any n ear-term loss of existing participants would create an immediate resource “gap” that cannot be quickly and cost-effectively filled by new utility generation resources, further creating system reliability issues. The commenter ( 956) requested that the EPA extend the temporary provision from April 2017 to April 2019 to provide time for customers and utilities to adapt without risking electric system reliability. Another commenter (909) recommended that there be no sunset date to the provision allowing both emer gency and non-emergency engines to be used for up to 100 hrs/yr after April 2017. One commenter (1017) understood that the April 17, 2017 deadline for peak shaving hours are in conjunction with the compliance ti meframe for the NESHAP from Coal and Oil-Fired Electric Utility Steam Generating Units (77 FR 9304) rule. However, the commenter (1017) said that there would be little change in the local need fo r these RICE units after that rule goes into effect. The commenter (1017) encouraged the EPA to continue to allow the 50-hour allowance after that time. One commenter (1143) urged the EPA to retain the tempor ary allowance through the final comp liance date of the MATS rule. Commenter 969 said that the EPA’s assumption th at the role of emergency RICE units can be replaced with changes in the MACT rule and/or rene wable energy resources is not realistic any time in the near future, and certainly not in 5 years. The commenter (969) said that if their company discontinues using these units for load manageme nt purposes after April 16, 2017, the result will be higher system peak loads for their utility requiri ng additional base load generation. The commenter (969) concluded that this is a very inefficient use of base load gene ration and will result in even more emission problems than what the proposed changes in the EPA rule proposes to address. According to the commenter (969), they would have to inve st approximately $50,000 on unnecessary emissions control equipment. The commenter’s (969) analysis comparing plotted investment cost of a diesel generator compared to electric rates savings for load management showed them that running a unit more than 80 hours a year will not make financial sense, which is consistent with most units across the country. The commenter (969) asked the EPA to remove the restrictions placed on load management119 operations (2017 sunset and 50-hour limit). Commenter 989 also ag reed that they would support extending or eliminating the sunset da te. Other commenters (937, 943, 947, 950, 1025, 1037, 1038, 1045, 1065, 1074 and 1445) agreed that the April 16, 2017, cutoff date should be eliminated. One commenter (1036) said that the sunset provision shoul d eliminated for small, rural municipal and other not-for-profit entities to mi tigate economic impacts on them. One commenter (1072) said that section 112 of the CAA does not allow the EPA to temporarily allow a particular operation for engines under the RI CE NESHAP based on nega tive consequences from
the MATS rule on EGUs and electri c reliability. The commenter (1072) particularly objected to the premise that the EPA has the discretion to consider a management practice to be temporarily GACT as the result of a separate EPA re gulation on a separate source cate gory. According to the commenter (1072), the proposed allowance for peak shaving unde r the RICE NESHAP is either an acceptable operation representing GACT for the purposes of CAA section 112 or it is not. In other words, the commenter (1072) stated that if the EPA has determin ed that a limited amount of peak shaving is an acceptable operation for emergency e ngines for the purposes of GACT under the rule, then the EPA does not have justification for revoking the peak shaving provision on April 16, 2017. One commenter (1072) said that the only justif ication the EPA has provided for revoking the peak shaving provision is that generators receive compensation from peak shaving programs and that
“...the EPA believes that it is not appropriate to allow these engines to continue receiving compensation for this non-emergency use be yond 2017 without having to reduce their emissions” (77 FR 33819). However, the commenter (1072) said that the EPA’s ju stification is not valid b ecause operators are still allowed the same 100 hrs/yr of non-emergency use after April 16, 2017. The commenter (1072) concluded that peak shaving should be allowed for all sources without an expiration date as part of the 100 hours of non-emergency use because no environmental benefit is being shown by limiting it to area
sources for a limite d number of years.

Response : As discussed in RTC 2.1.1 and 2.2.1, the EPA has determined that it woul d not be appropriate to finalize a limited temporary provi sion for peak shaving, for the reasons stated in those responses. As noted by the commenters, operation for peak shavi ng does not fairly come under the definition of emergency use. Furthermore, severa l commenters indicated that there would be sufficient capacity to maintain reliability during the pe riod of MATS compliance. The EPA believes that the other provisions allowing operation of emergency engines prior to lo ss of grid power provide considerable protection against power interruption and th at concerns about general capac ity restraints causing reliability120 problems do not justify failure to meet reasonable e mission controls requirement s for engines used to increase capacity. Consequently, the EPA does not agree with the commenters that it would be appropriate to extend the proposed provision indefi nitely. Regarding the comments about investments for stand-by engines, the EPA notes that in its previous rulemakings for existing engines, which were proposed and finalized several years ago, the EPA di d not allow any use for p eak shaving and stand-by service, so that such decisions should have been pa rt of financial planning for such units for several years. The EPA acknowledges that owners and operator s of certain middle aged units may need to make financial choices regarding the use of the units and whether to put emissions aftertreatment on such units. The EPA notes that this type of decision-making is inherently a part of regulation of existing units, and that the cost-effectiveness of controls for general- use RICE is justified. Further, the cost of emission
controls can be included as one of the elements take n into account in the financial arrangements for peak supply. Regarding the suggestion that the requireme nts for engines engaged in stand-by and peak shaving not be implemented until April 2027, the C AA contains deadlines and limitations regarding what technologies are generally avai lable and, while these provisions are not inflexible, such a very long delay in implementation has not been justified by the commenter, given these provisions. The EPA also does not agree that it would be appropriate to exte nd the timeframe for compliance for several years, and the commenters did not provide specif ic information to show that compliance could not be achieved for several years. However, in consider ation of the short time between th e final rule and the May 3, 2013, or October 19, 2013, compliance dates for affected sources, the final rule permits the use of existing stationary emergency engines located at area sources for 50 hrs/yr through May 3, 2014, for peak shaving or non-emergency DR to generate income for a facility, or to otherwise supply power as part of a financial arrangement with another entity if the e ngines are operated as part of a peak shaving (load management) program with the local distribution system operator and th e power is provided only to the facility itself or to suppor t the local distribution system. Owners a nd operators of these engines, which have heretofore not been regulated, may have ta ken actions based on the June 7, 2012, proposal that would now leave them in danger of being in non-co mpliance with the applicable requirements for the engine in the RICE NESHAP. The EPA does not agree with the commenter w ho claimed that section 112 of the CAA does not allow the EPA to provide temporar y relief to allow engines engaged in peak loading to meet less stringent standards for a short time . The CAA has provisions to allow lead time for existing engines to meet emission requirements, and while there are li mitations on the amount of lead time the EPA can provide prior to requiring compliance with its require ments, the EPA believes section 112 of the CAA is121 flexible enough to allow the EPA to phase in requirem ents for sources, if jus tified, without requiring full compliance in 3 years. In any case, as the EPA ha s indicated, it is not prom ulgating the allowance for peak shaving units in the final rule. The comment st ates that “the proposed allowance for peak shaving under 40 CFR part 63, subpart ZZZZ is either anacceptable operation representing GACT for the purposes of CAA section 112 or it is not,” and the EPA has determined that it is not. The EPA also noted that while the compensation for peak shaving use is a factor in the EPA’s deliberations, the controls being required for general use CI engines are justified as emission controls even in the absence of such payments. As numerous commenters have noted, the regulations put in place provide
considerable emission reductions from uncontrolled diesel engines through existing and reasonable
controls.



### 2.5 Requested Clarifications

2.5.1 Comment : One commenter (1104) noted that the proposed limitation on the use of peak shaving as part of a program with the local system operator doe s not seem to include any peak shaving that might be coordinated through an energy control center that operates over more than one local distribution system. The commenter (1104) believes that RICE units participating in such “regional” control systems should be permitted to engage in peak shaving as part of the allowance included in the proposed rule, and requests clarification from the EPA on this point.

Response : As discussed in RTC 2.1.1 and 2.2.1, the EPA determined based on pub lic comment that it would not be appropriate to finalize the proposed limited temporary provisi on for the use of peak shaving. Consequently, the EPA is not making the clarificati on requested by the commenter.

2.5.2 Comment : One commenter (1104) noted several specific references to “remote” facilities in the preamble’s discussion of the tempor ary peak-shaving provision, where th e EPA cites in particular the use of RICE by rural cooperative utilities. The comme nter (1104) stated that the term “remote” does not appear in the proposed amendments themselves re lative to this section. Commenter 1104 generally endorses EPA’s rationale that the peak-shaving allowance, but is concerned that the use of the term “remote” in the preamble may be misc onstrued to imply that there is a geographical restriction on the ability of existing stationary emergency RICE uni ts at area sources to engage in the proposed amendments’ allowance of up to 50 hours annually fo r peak shaving and other non-emergency use. The commenter (1104) asserted that th e term “remote” as used elsewh ere in the preamble has a very122 restrictive meaning. The commenter (1104) does not belie ve that it is the EPA’s intent to geographically limit the peak shaving provisions and strongly enc ourages the Agency to remove the term “remote” from the preamble in this context. Commenter (1104) further noted that the language in the proposed amendments also appears to require that peak-shaving or non-emergency DR pr ograms must be used to “generate income for a facility, or to otherwise supply power as part of a financial arrange ment with another entity.” The commenter (1104) does not believe that the EPA intends this to be a re quirement, but instead to permit the generation of income or participation in ot her financial arrangements and feels the EPA should clarify this language. The commenter (1104) also requested clarification of the Agency’s use of the term “local” as it applies in this section of th e proposed amendments. The comment er (1104) argued that in both emergency situations and for system repairs and outages, electric power may need to be exported from a local distribution system (e.g., beyond the borders of a municipal electric utility) in order to support the adjoining and interconnected system of a larger investor-owned utility. Thus, commenter (1104) asserted, one can “support the local distribution syst em” (emphasis added; langua ge of the amendments) without limiting the use of power to that used by the facility itself or “towards the local system” (language in the preamble). The commenter (1104) r ecommended the EPA clarify this section so as not to limit essential syst em balancing functions. One commenter (960) requested clarification on the proposed provisions in cases where the operator of the engine is the same en tity as the local electri c distribution operator, yet also enters into an agreement for re-sale of the elect ric power commitment to a third party (e.g., as part of a forward capacity commitment). The commenter (960) asked th e EPA to clarify if th is situation would be permitted under the allowance in §6 3.6640(f)(4)(i). Commenter 960 also as ked that the EPA clarify that a financial agreement under ISO-NE’s Forward Capac ity Market or similar programs in other areas would qualify as peak shaving or a load mana gement program for purpos es of §63.6640(f)(4)(i).

Response : As discussed in RTC 2.1.1 and 2.2.1, the EP A is not finalizing the proposed limited temporary provision for the use of peak shaving. As a result, the clarifications requested by the
commenters are not needed in the final rule.123 

### 3.0 Impacts of Standards

3.1 Air Quality Impacts

Air Quality Impacts Analysis

3.1.1 Comment : Air Quality Impacts Analysis Flawed A few commenters (961, 1033 and 1101) asserted that they do not believe the EPA has properly estimated the environmental impacts of the rule. One commenter (961) provided that, in the absence of information on stationary diesel generators and DR resources, as admitted by the EPA in relationship to the proposed rule, the commenter (961) suggested th at the EPA conduct a complete assessment of the environmental impacts of permitting diesel generators to operate w ithout air pollution control devices, plus the impact of possible new di esel generators that would be manufactured and appear in these programs if the EPA finalizes this allowance. Likewise, commenter 1101 expressed that it doe s not believe that the EPA should finalize the proposed amendments before it has a clear understa nding of how many engines will be affected by the rule and how often these engines are operated. The commenter (1101) argued th at the EPA must conduct an in-depth assessment of the environm ental impacts of the final amendments. One commenter (1090) said that the EPA did not model emissions increases from DR programs based on a false assumption that the previous hours- of-use estimates are still valid despite program changes that allow increased allowable participati on in DR programs, when the original modeling only accounted for 50 hours of operation for CI and SI emergency stati onary RICE. The commenter (1090) added that, for typical electric generators, the EPA processes air quality permits based on the full capacity of the unit, regardless of whether the uni t runs below full capacity. For purposes of this proposed rule, in order to be consistent with th e provisions therein and with the EPA’s standard practices for assessing air quality impacts, the comme nter (1090) said that the EPA should assume 100 hours of operation for all emergenc y stationary RICE and perform corresponding emissi ons modeling. Some commenters (961, 1123, 1134 and 1140) were par ticularly concerned that the EPA did not update the runtime in its emissions impacts estimate for the proposed rule and use 100 hrs/yr consistent with the rule proposal to calculate emissions. Similarly, commenter 1134 sa id that the EPA has underestimated the emissions impacts of the proposed rule and that most certainly engines would124 operate more often under the proposed rule than before. Commenter 1090 added that the EPA should also account for the proposed expansion of engines that can qualify to participate in DR programs.

Concurred with the EPA’ s Air Quality Analysis Some commenters (941, 942, 945, 951, 952, 968, 970, 1017, 1023, 1025, 1036, 1065 and 1113)
concurred with the EPA that this modification to the rule can be made without an increase to air pollution levels in affected areas . One commenter (968) said that in Missouri’s case these units are
located in rural areas 75 or more miles from non-attainment areas for ozone, and in small communities. Two commenters (1017 and 1051) said that the vast majority of RICE units in Kansas are “dualfuel” engines operated primarily on cleaner burning natural gas. According to the commenters (1017 and 1051), dual-fuel engines may be run on diesel fuel if necessary, but far more commonly are only started up on diesel fuel and then operated using natural ga s. The two commenters (1017 and 1051) said that the result is that roughly 90 to 95 percent of the fuel used by dual fuel engines is cleaner burning natural gas. Commenter 1051 added that operators of dual fuel units prefer to run them on natural gas because
that is the most efficient a nd cost-effective way to do so. One commenter (873) claimed that emergency DR has a net positive impact on the environment. The commenter (873) explained that the proposed rule only applies to existing emergency backup generators; therefore, there is no pollution from construction, no land or water use issues, and no new
transmission needed becaus e nothing new is being built. One commenter (1142) stated that emergency engines can have environmental benefits compared to central station generation. The comme nter (1142) referred to an EPA sponsored study entitled “Modeling Demand Response and Air Emissions in New England” prep ared by Synapse Energy Economics, Inc. (the “EPA DR Study”), in which the authors found that by having available quick-start capacity to handle emergency conditions on the electric grid, there would be less reliance on old, highGHG-emitting power plants that have to run at 50 percen t load or higher all the ti me so that they can be available when needed (called spinning reserves in New England). According to the commenter (1142) the EPA DR study found that even if one assumes that all DR is from diesel-fir ed generators, there is a net benefit in air quality from having quick start resour ces available, such as emergency DR, whether or not those resources are ever called, because of re duced reliance on spinning reserves. The commenter (1142) asserted that emergency engines have other environmental and economic benefits that are not available to central station power plants and alr eady exist and so have no environmental impacts
associated with construction.125 Response : The commenters that believe that the EPA’s e nvironmental impacts analys is is flawed bring up a number of different points that they believe to be true; however, the co mmenters did not provide any substantial useable information that the EPA c ould use to improve the estimate of environmental impacts. Some of the commenters said that they do not agree with the EPA using 50 hrs/yr to estimate the emissions from emergency engi nes and that the maximum allowabl e runtime of 100 hrs/yr should be used instead. Not enough specific information was pr ovided in the reports submitted to the EPA in relationship to these comments. As noted previousl y, the EPA has justified its allowance for emergency DR based in part on the historical knowledge that ISO and others have not relied on emergency engines for emergency DR purposes more than a few hrs/yr on average and to base the environmental impacts analysis on the maximum allowable runtime of 100 hrs/yr to estimate emissions from emergency engines would overestimate emissions. The EPA believes that if situati ons arise where emergency DR is being called for greater than 100 hrs/yr , it is likely that an inordinate amount of reliance is being placed on this program to ensure grid reliability, rather than just emergency back up. Also, other commenters provided support for the EPA’s environmental imp acts (see above) and use of 50 hours versus 100 hours. One commenter (1142) asserted that emergency DR has been rarely dispatched and references a comment letter submitted by PJM to the EPA in February 2011 (EPA-HQ-OAR-2008-0708-0813) (see Attachment 1). Other commenter s (1017, 1045, 1051, 1074, and 1129) agree that there is little or no financial incentive to operate other than when absolute ly necessary to maintain the local distribution grid and described the higher costs of op erating such units or that the ma rketplace will limit the operation of the emergency units. In any event, the EPA disagrees because evid ence shows that emergency engines typically operate far less than 50 hrs/yr so in fact, even 50 hr s/yr could be an overestim ate in terms of expected emissions from emergency engines. Emergency e ngines operate infrequently under emergency DR programs and the EPA showed different examples of that in the impacts assessed for the proposed rule, 37 where as few as 3.75 to 16.5 hours were spent for emergency DR operation in the mid-2000’s in New England. (The EPA notes that the Agency did not fina lize the temporary allowance for peak shaving that had been proposed and thus did not need to account for any such hours.) Accounting for annual maintenance and testing, which nor mally is 1 to 2 hours per month, plus other emergency operation,

37 Memorandum from Tanya Parise, EC/R to Melanie King, USEPA, regarding RICE NESHAP Reconsideration Amendments - Cost and Environmental Impact s Memo. May 10, 2012. EPA-HQ-OAR-2008-0708-0857.126 total emergency operation is on averag e less than or equal to 50 hrs/yr. 38 In addition, the estimated emissions from emergency engines use the total nu mber of emergency engines in the United States; however, not all emergency engines participate in emergency DR programs. Consequently, for those emergency engines not in emergenc y DR programs, or for those that are signed up, but do not end up being called upon, the actual emissions emitted from thes e engines could be substantially less than that estimated by the EPA. Therefore, the EPA disagrees w ith the commenters and continues to believe that it is appropriate to use 50 hrs/yr to assess average emissions from em ergency engines. The EPA believes
the estimate of emissions from emergency engines as a whole is reasonable, representative of nationwide operation, and may very well be a conserva tive, overestimate of actual emissions from the combined operation of emergency DR activities, maintenance and testi ng, and other emergency operation. Additionally, the EPA received updates to data submitted by EnerNOC that included draft updates to PJM’s DR resources. Based on these updates, the current percentage of backup generators used was 23 percent, compared to data from May 2012 where PJM reported 14 percent from backup generators. 39 EnerNOC projects based on currently availabl e information pending a final analysis that the percentage of diesel generato rs participating in DR programs wi ll be in the high 20s for PJM and nowhere close to the much higher pe rcentage claimed by other sources. In response to the comment that said that if the EPA allows additiona l uncontrolled operation, new uncontrolled diesel generators will enter the market and so on, the EPA disagrees. Prior to the 2013 compliance date, there were no limits on operation fo r existing emergency engines. The existing RICE NESHAP promulgated in 2010, as amended by these fina l amendments, will for th e first time establish requirements for these engines, lim iting their hours of operation in certa in situations such as emergency DR. Commenters do not provide significant evidence that the hours of use for engines used for emergency DR will expand by large multiples at the sa me time the EPA is beginning to regulate such hours of use. Again, commenters are also incorrect in presuming that any such increased hours for emergency DR will affect the average use of all em ergency engines, when there is no evidence that a large percentage of emergency engines even participate in such programs. The EPA also disagrees with the commenters’ statement that any new emergency engines used for emergency DR will be uncontrolled. New emergenc y engines are subject to substantial emission

38 Hours of Operation for Stationary Compression Ignition Internal Combustion Engines. Memorandum from Tanya Parise, Alpha-Gamma Technologies to Jaime Pagán, EPA. June 20, 2005. EPA-HQ-OAR-2005-0029-0011. 39 Email from Don DiCristifaro, EnerNOC to Melanie King, EPA. Revised PJM Load Activity Report for Demand Response. December 21, 2012.127 controls via either Tier 2 or Tier 3 controls, depending on the size of the engine. These controls usually would not require aftertreatment, but are the strongest “in-cylinder” contro ls available for diesel engines. Indeed, these standards require greater PM and NO x emission reductions from uncontrolled levels than are required for existing non-emergency engines. See 40 CFR part 60, subpart IIII and 71 FR 39154 and Response to Public Comments on Proposed Standard s of Performance for Stationary Compression Ignition Internal Combustion Engines document for additional information related to new emergency engine requirements. 40,41 Nor does the commenter provide si gnificant evidence that the EPA’s regulations, which, again, control the hours of use of emergency engines, will lead to installation of a greater number of new emergency engi nes, particularly since these rules forbid the use of emergency engines for peak shaving and economic DR and limit the use of these engines for emergency DR, which historically accounts for very few hours of use annually. The final amendments also require owners and operators of existing em ergency CI stationary RICE with a site rating of more than 100 brake HP and a displacement of less than 30 l/cyl that use diesel fuel and operate or are c ontractually obligated to be availa ble for more than 15 hrs/yr for emergency DR to use ULSD fuel. Th is fuel requirement also applies to owners and operators of new emergency CI stationary RICE above 500 HP with a displacement of less than 30 l/cyl that are at major
sources. The ULSD will reduce HAP emissions from these engines. However, the EPA is unable to assess the quantity of HAP emissions reductions that wi ll be realized through this fuel requirement. An estimate of the impact of the ULSD is not possible b ecause the number of engines that would be affected by this requirement is unknown. The EPA does not know the number of engines that will be operated for emergency DR and the EPA does no t know how many of those engines would operate for more than 15 hrs/yr. Nonetheless, the ULSD requi rement will offset and contribute to lower the emissions estimated from stationary emergency engines, but the quantity is unknown. The EPA is also finalizing reporting requirement s for engines contracted for greater than 15 hours of use for emergency DR and voltage/frequency deviations, and where engines are used for 50 hrs/yr for non-emergency situations for supplying power as part of a financial arrangement with another entity. This information will provide considerable information regard ing the use of such engines.

40 Memorandum from Jamie Pagan, SPPD – Energy Strate gies Group to EPA Docket EPA-HQ-OAR-2005-0029. Response to Public Comments on Proposed Standards of Performance for Stationary Compression Ignition Internal Combustion Engines. 41 Standards of Performance for Stationary Compression Ignition Internal Combustion Engines; Final Rule. July 11, 2006. 71 FR 39154.128 Formaldehyde Modeling – Definition of Remote Stationary SI RICE
3.1.2 Comment : One commenter (1090) said that HAP have significant transport potential that the remote stationary SI RICE definition does not account for. The commenter (1090) referred to a study of formaldehyde transport that reported detected levels at 48 parts per billion 50 km away from the sources of formaldehyde emissions. The commenter (1090) said that this is significantly farther away from a source than the distances from higher housing density areas contained in the re mote stationary RICE definition, and the EPA must account for the transport potential of HAP under di fferent circumstances. The commenter (1090) said that the existing dist ance limits of 220 yards and 0.25 miles relating to housing density are scientifically irre levant as related to the transpor tation of pollutants, and the EPA’s definition of remote stationary RICE is not based on actual pollutant data.

Response : The EPA does not disagree with the commenter that it is possible for formaldehyde emissions from an engine to travel farther than 220 yards or 0.25 miles. The distance cr iteria of 220 yards or 0.25
miles is not intended to be a dist ance outside of which there would be no air pollution impact from the stationary engine. The differentiation based on the number of buildings intended for human occupancy within the area around the engine is only intended to be a measure of the remoteness of the engine, which is a factor in determining GACT for the e ngine. The EPA notes that the commenter’s brief discussion provides no information on whether formaldehyde emissions from engines would travel as far as from other sources, given th e low emission point of engines. On the other hand, the EPA received modeling information from other co mmenters to assess pollutant con centrations, which was conducted using the EPA’s ISC3 and two model natural gas-fired 4-stroke lean burn (4SLB) and 4-stroke rich burn (4SRB) engines above 500 HP. 42 The results of the dispersion mode ling indicated that there is rapid
decrease in the concentration within short distan ces where the maximum concentration for all stack heights from the 4SLB engine occurred at less than 50 meters and from the m odeled 4SRB engine at less
than 130 meters. Both distances are well below the di stance criterion of 1⁄4 mile for non-pipeline engines. The EPA notes that this modeling information was provided only for 4S SI engines and would need to be further reviewed, but it is rele vant in responding to the comment.

42 Memorandum from Jim McCarthy and Jeff Panek, IES to Lisa Beal, INGAA. Concentration versus distance profiles from reciprocating internal combustion engines – Dispersion modeling results for two example engines from previous INGAA modeling. July 27, 2011EPA-HQ-OAR-2008-0708-0849.129 Correlation Between High Ozone Days and Emergency DR
3.1.3 Comment : Emergency DR and Ozone Exceedance Correlation One commenter (1140) believes th at the increased use of emer gency DR will likely increase ozone and PM levels, therefore making it harder for communities to meet national air quality standards. In addition, the commenter (1140) said that the use of these generators threatens communities that are already disproportionately burdened by air pollution. Commenter 1076 added that the proposed rule will exacerbate air pollution on the worst days a nd that the EPA makes no mention of this. Commenters 954, 1047 and 1088 were concerned that emergency engines would be operated on HEDD, which tend to correspond to high ozone and fine particulate levels on these challenging days, in their opinion Commenter 961 added that the most significant de mand for electricity generation happens during the warmest months (i.e., ozone season), and that it is likely, according to commenter 961, that these units would operate disproportionate ly during the ozone season, when the adverse effect of such emissions is most severe. The commenter (961) assert ed that the environmental impacts associated with allowing uncontrolled diesel emergency to operate more under DR programs had not been estimated. According to the commenter, the EPA does not ha ve information on the number of BTM resources and did not consider the additional hours BTM engines w ould run, nor the possibility that additional BTM generation resources for DR purposes could be built in the future if the proposed allowance is finalized. The commenter (961) expressed this as a concern becau se PJM has indicated that when the level of DR as a share of total capacity resources increases, th e number of times that DR is deployed will also increase. The commenter (961) stressed that any claims of the opposite are based on obsolete and
narrow studies and should not be relied upon. Additionally, commenter 961 disagreed with the EPA’s emissions impacts analysis stating that a maximum r untime of 100 hrs/yr was not used in the analysis. The commenter (961) also disagreed with the EPA’ s assumption that emergency engines are a small portion of the DR resource mix and would rarely be deployed. The commenter argued that this is not consistent with reality, and added that if the EP A allows additional uncontrolled operation then the EPA should also expect that more, new un controlled diesel generators will en ter the market to take advantage of this competitive advantage in economic capacity markets. One commenter (1090) was concerned that emer gency generators would result in emissions increases on the worst air quality days of the year, such as HEDD on hot summer days. The commenter (1090) cited a NESCAUM study that found a generally positive relationship between daily maximum130 temperatures and NO x emissions from EGUs, consistent with higher air conditioni ng use on the hottest days. The commenter (1090) said that the study also found that the days with the highest temperatures and the highest EGU NO x emissions were also days with th e highest use of diesel EGUs. The commenter (1090) added that on July 22, when the temperature in Newark reached 108 °F, the NO x emissions from diesel EGUs was 52.5 tons, more than the total NO x emissions from all EGUs on more than half of the days the entire summer. The comme nter (1090) said that the report showed that DR resources were dispatched by all three ISO in the NESCAUM region on July 21 and 22, 2011, which coincided with the highest ozone readings that month. The commenter (1090) added that the report stated that on July 22, it is estima ted that emergency diesel generato rs contributed up to 109 tons of NO x and 3.2 tons of PM, much of it concentrated w ithin metropolitan areas, some of which are nonattainment areas. Commenter 1124 added that states in the PJM regi on have raised concerns about the effects of units that operate on HEDD, regardless of annual run ti me and noted that New Je rsey has enacted strict regulations for generators that operate on HEDD. One commenter (1102) objected to any use of unc ontrolled engines in DR because, according to the commenter, they have a significant impact on ozone non-attainment in Delaware. The commenter (1102) provided an extensive analysis (see pages 8 through 13 of comment letter) including the growth in DR resources, which the commenter (1102) be lieves the EPA has underestimated. The commenter (1102) compared maps of non-attain ment areas with DR and conclude d that the EPA’s proposal would increase the participation of uncontrolled engine s in DR in the entire PJM region, which would exacerbate the unhealthy levels of ground-level ozone already around these non-a ttaining monitors from both local and upwind areas of DR.

No Evidence of Emergency DR and Ozone Exceedances Two commenters (1043 and 1142) asserted that th ere is no correlation between emergency DR and ozone exceedances. One commenter (1043) cited comments submitted to the EPA in February 2011 by EnerNOC et al. (EPA-HQ-OAR-2008-0708-0748) a nd in February 2012 (EPA-HQ-OAR-2008-0708- 0839), which included a detailed analysis demonstrati ng that there is no correlation between emergency DR and ozone exceedances days. The commenter (1043) did say that there are some emergency DR events that are called during high ozone days, but that there are many DR events on non-ozone exceedances days also and several more days have ozone alerts, but no DR events. Based on the data commenter 1043 presented, the commenter (1043) concl uded that the use of emergency engines during131 DR events does not cause high ozone, particularly b ecause in many situations the ozone concentrations are as high or higher on the days before an event. According to the commenter (1043), no data have been introduced into the record that refute this analysis. Commenter 1043 also discussed another report , one issued by NESCAUM from August 1, 2012, where air quality was analyzed for July 21 and Ju ly 22, 2011, when emergency DR events were called by NY ISO and PJM. According to the report by NESCAUM, the 2 days studied “coincided with the highest ozone readings that mont h.” However, in the commenter’s (1043) opinion, the report consisting of this 2-day analysis is not r obust enough to conclude that the use of emergency engines in emergency DR programs cause high levels of ozone. Conversely, the commenter’s (1043) report cited above studied all events called by ISO NE from 2002 through 2012, all emergency DR events called by NY ISO from 2001 through 2010 and the one emergency DR event that was called in the ERCOT region since that program started through February 2011. The commenter ’s (1043) analysis of 34 separate DR events
reached the conclusion that there is no correlation between emergency DR and high ozone concentration
levels. Commenter 1142 also referred to the NESCAU M entitled “Air Quality, Electricity, and Back-up Stationary Diesel Engines in the Northeast” da ted August 1, 2012, which alleges that the use of DR correlates with high ozone days. Similarly, the comme nter (1142) also noted that the NESCAUM report only looks at emergency DR events on 2 days while the analysis submitted by this commenter (1142) reviews 34 events spread over many years in many diff erent parts of the countr y. For a fuller critique of the NESCAUM methodology please see the comment s by Blue Sky Environmental LLC. These
comments can be accessed in the docket for this rulemaking (EPA-HQ-OAR-2008-0708). Commenter 1043 pointed to the emergency DR ev ent discussed in NESCAUM’s report which occurred on July 22, 2011 and was the largest emer gency DR event for 2011 for PJM. Included in commenter’s (1043) letter was a summary of pre liminary ozone data obtained from the Maryland Department of the Environment. According to this data, there were no high ozone measurements that day, the commenter (1043) said. The commenter (1043) compared July 2, where a reading of 0.107 parts per million (ppm) was observed, which was higher than the maximum reading of 0.097 ppm observed on July 22. July 2 was not an emergency DR event day, the commenter (1043) said. Further, according to the commenter (1043), 12 of the monitors on July 2 recorded higher readings than on July 22 for the same monitors. Therefore, the commenter (1043) asse rted that based on this analysis, one cannot say that the use of generators on July 22 during th e Emergency Load Reduction Program caused the high ozone that day.132 Commenter 1043 again reemphasized that there is no correlation between emergency DR and high ozone concentrations. More support for the EP A’s proposal was provided by the commenter (1043) who conducted an air quality and health analysis for APPA for the 2012 derecho blackout in Washington, D.C. and vicinity. According to the co mmenter (1043), the blackout could not have been prevented by the use of engines in emergency DR , however; the event does in the commenter’s (1043) opinion provide an excellent opportun ity to look at the worst-case s cenario of operating thousands of backup generators for days and how such operation affects air quality and health. Some commenters, commenter 1043 said, are claiming that using a subset of generators for a short period of time to save the electric grid will cause serious harm to air quality and health. However, according to commenter 1043, the analysis conducted indicates that: • Thousands of emergency generators we re operating from June 30 through July 5, 2012 (most operating June 30 through July 2, 2012); however, maximum ozone concentrations were less than both pre- and post-blackout conditions. • Despite thousands of emergency engines be ing in operating during the blackout, this did not cause exceedances of PM (PM 2.5 or PM 10 ) NAAQS.
• Heat-related deaths were not above average during th e derecho-caused blackout in Washington, D.C. and surrounding areas because so ma ny facilities have emergency backup generators and were able to keep air conditioners running during the extreme heat. • The air quality concentrations were less than those observed prior to and after the blackout (when no emergency engines were operating) even with every available generator running for days in the Washington, D.C. area. Another commenter (1142) stated that use of emergency engines in emergency DR programs
does not harm the environment and that there is no correlation between high ozone days and emergency DR. The commenter (1142) argued that while opponents of the use of emergency engines in emergency DR programs have alleged that emergency DR is di spatched by the ISO on days of high ozone, implying that the use of emergency engines will increase the number of ozone exceedance days. These same opponents have demonstrated in their own analysis (entitled “Analysis of Emergency DR and Ozone Concentrations,” and submitted to the EPA in February 2011) demonstr ating that there is no correlation between emergency DR and ozone exceedance days . The commenter (1142) further argued that Delaware in previous comments referenced a tec hnical paper entitled “Using Backup Generators for Meeting Peak Electricity Demand: A Sensitivity Anal ysis for Emission Controls, Location and Health Endpoints” (Gilmore, Adams & Lave, 2010) to support its position that DR is correlated with high133 ozone days did not differentiate between emerge ncy and non-emergency DR. The commenter (1142) asserted that the referenced paper analyzes th e use of generators for non-emergency (e.g., priceresponsive) DR.

Response : As indicated in the summary of comments, there are different beliefs regarding the correlation between emergency DR and high ozone. Th e EPA disagrees with commenters who asserted that there is a correlation between high ozone da ys and emergency DR use because of lacking or incomplete evidence that this is the case. For in stance, as indicated by commenter 1142, the technical paper entitled “Using Backup Generators for Meeting P eak Electricity Demand: A Sensitivity Analysis for Emission Controls, Location and Health Endpoint s” (Gilmore, Adams & Lave , 2010) (which is cited as support for a correlation between high ozone days and emergency DR ) did not differentiate between emergency and non-emergency DR. The 100 hrs/yr provision in the final rule at §63.6640(f)(2) is strictly for the purposes specified in (i) through (iii) of that secti on, which is limited to maintenance checks and readiness testing, emergency DR operati on under declared EEA Level 2 alerts, and periods of voltage and frequency deviations of more than 5 percent below standard conditions. Also, as noted by commenters 1043 and 1142, the NESCAUM report was limited and consisted only of a 2-day analysis, and the EPA agrees that the NESCAUM report did not provide enough data to establish a firm conclusion about emergency DR operation and ozone exceedances. In general, the commenters who expressed concern about the impact of the emissions from these engines did not provide any information linking the emissions to exceedances of the oz one standard. The Agency agrees
with the commenters that state that there is insuff icient information to su ggest a correlation between high ozone days and emergency DR (see comments provided by 1043 and 1142) and believes sufficient evidence exists supporting the conclusion that em ergency DR and high ozone days are not well correlated. For example, in the eastern PJM regi on between 2006 and 2010 there were nine emergency DR events lasting from 3 to 6 hours in duration. 39 Only during six of the even ts was ozone recorded as being high and only in some states of PJM; therefore, there is not a clear correlation between high ozone and these limited emergency DR events. While the EPA acknowledges that emergency DR may be called during HEDD in the summer when days are espe cially warm and ozone is problematic, the use of emergency DR at such times cannot be directly co rrelated as causing or contributing to the ozone exceedances. Also, the fact is that many DR even ts occur on days when ozone standards were not134 exceeded and in many cases ozone levels are high or higher on days before a DR event, according to
available data. 43

NAAQS Standard Compliance
3.1.4 Comment : Two commenters (1033 and 1102) said that addressing HAP, ozone, PM 2.5 , and nitrogen dioxide (NO 2 ) pollution will require air quality manage rs to pursue emission reductions from additional air pollution sources, especially when th ere are generating sources operating mainly on high demand days and under expanded usage conditions permitted by the proposed rule. One commenter (1033) described the impacts on “bum p ups” in non-attainment status. The commenter (1033) said that the 2017 expiration of the 50-hour exemption for non-em ergency programs such as peak shaving will be
small consolation to areas that have failed to a ttain a NAAQS. Commenter 1102 added that the EPA’s proposal burdens state air quality agencies who wi ll now need to perform extensive inventory improvements to properly account for the emission increases from generators in their State Implementation Plans (SIP). The commenter (1102) said that the EPA needs to develop a thorough inventory of engines that are used in emergency DR or peak shaving in order to assess the impacts from such units prior to promulgating any pr oposal that affect stationary RICE. Another commenter (1088) believes that the propos ed 50-hour allowance for peak shaving goes beyond the careful balance contemplated in the emer gency allowance provisions and could cause or significantly contribute to non-attain ment of the NAAQS for ozone, NO 2 , PM and possibly SO 2 . The commenter (1088) urged the EPA not to finalize this provision until it has completed a more detailed analysis of the potential air quality im pacts, particularly in large populat ed areas and areas that currently have challenges in meeting the NAAQS. Commenter 1102 said that meeting current and future ozone NAAQS will require additional NO x emission reductions, and the EPA’s proposal is counter to this because it increases rather than decreases
NO x emissions. One commenter (1011) said that the EPA has faile d to properly estimate the adverse impacts of
the increased emissions of NO x that would result especially on HEDD, if this rule goes final. Specifically, the commenter (1011) referred to the significant increase in NO x emissions that would result from exempting certain 4SRB engines from emis sion standards. The EPA estimates that there will

43 See Attachment 6 of Letter from Richard H. Counihan, EnerNOC to Michael Horowitz, et al., EPA. February 29, 2012.Entitled “Addendum to Analysis of Emergency DR and Ozone Concentrations.” Prepared for EnerNOC by Blue Sky Environmental. February 2012. EPA-HQ-OAR-2008-0708-0839.135 be an increase of close to 108,000 tons per year (tpy) of NO x and VOC as compared to the 2010 rule, if this proposed rule goes final. Th e commenter (1011) argued that this loss is substantial and could adversely impact ozone attainment within downwind areas such as the ozone transport region. The commenter (1011) said that the estimated NO x emissions associated with th is measure are two and a half
time more than the Stat e of Delaware’s total NO x inventory and the commenter (1011) urged the EPA to reconsider this exemption of engines until a study can be conducted to evaluate the impact on downwind

areas. One commenter (1088) said that part of the solution to meeting NAAQS is to reverse the growing trend of RTO that are relying more heavily on emergency generators to maintain grid stability. The commenter (1088) urged the EP A to work closely with thes e RTO (and other agencies as appropriate) to develop a path fo rward that relies less on these emer gency generators, which will help states reduce emissions of air toxics and achieve attainment with the NAAQS. One commenter (1033) said that the proposed rule would further impair the ability of states in the Northeast from meeting and maintaining th e ozone health standard. The commenter (1033) summarized information on the health impacts of ozone and the impact that increased NO x emissions from EGUs have on air quality. The commenter ( 1033) provided an example from July 2011, that illustrates the severity of the ozone problem in the Northeast. The commenter noted that the EPA projects that the NESCAUM region is on track to be in attainment with proposed revised PM 2.5 NAAQS. The commenter (1033) added that the pr oposed RICE NESHAP lacks information on how
increases in uncontrolled diesel PM 2.5 emissions can affect emission trends , as well as localized impacts. The commenter (1033) added that, if uncontroll ed RICE operate on high sulfur content diesel, secondary formation of sulfate PM 2.5 will increase. The commenter (1033) said that because the proposed RICE NESHAP contains no restrictions on su lfur content in diesel used by RICE, use of high
sulfur fuels will further compound the increases in PM 2.5 that will occur from greater utilization of RICE in DR programs.

Response : The commenters indicated that there will be expanded use conditions under the proposed rule; however, the EPA would like to point out that contrary to what the commenters express, prior to the 2013 compliance dates for existing engines, there are no limitations on the hours of operation for these engines. The standards that go into effect in 2013 will for the first time establish requirements for these engines, including limitations on their hours of operation in certain situations such as emergency DR, and ULSD fuel requirements which will reduce HAP and criteria emissions from the engines. The136 final rule also includes reporting requirements for ow ners and operators that participate in emergency DR programs for more than 15 hrs/yr, which will make vital information regarding emergency DR operation available and hold owner and operators more accountable to documenting what emergency engines are used for. In additi on, the EPA is not finalizing the pr oposed 50 hrs/yr peak shaving allowance that was to expire in 2017. This should help mitigate some of the issues the commenters refer to and resolves the comment that the proposed a llowance should not be finalized. As discussed in section 3.1.1., the EPA does not believe that the revisions to emergency engine use in this rule will result in a significant change in the use of these engine s projected in the 2010 rule, particularly given the
conservative estimates used in that rule. There is no evidence that the result of this rule will be an increase of usage compared to historical le vels when these engines were not regulated.
In terms of comments about lack ing a thorough inventory of engine s that are used in emergency DR and peak shaving programs, the EPA agrees a nd acknowledges that there is little known about the number of and location of these engine s. With that said, the final rule requires owners and operators of emergency stationary RICE that operate or are contr actually obligated to be available for more than 15 hrs/yr for emergency DR to submit an annual report to the EPA documenting the dates and times that the emergency stationary RICE operated for emergenc y DR, beginning with the 2015 calendar year. This reporting requirement will provide information to the EPA about the location of these engines and how much these engines are operated for emergency DR. These reports will be helpful to state and local agencies, for SIP purposes, and will assist in devel oping more complete inventor ies of engines that can then subsequently be used to account for the emissions from these engines. In response to concerns about the ability of st ates to meet NAAQS, the EPA notes that it has done an analysis of the appropriateness and cost-e ffectiveness of placing afte rtreatment on emergency engines, and has found that it is in appropriate for such engines. The EPA has determined that controls for emergency engines are not cost effective and in an analysis conducted in 2010, the EPA showed that the cost per ton of reducing HAP from emergency CI engines with di esel oxidation catalyst (DOC) and open crankcase ventilation (OCV) ranged from near ly $3 million per ton of HAP reduced from the largest engine modeled to as high as almost $18 million per ton of HA P reduced for the smallest engine
modeled. 44 The EPA looked at the cost effectiveness of putting DPF on new diesel engines in 2006. The cost per ton PM reduced from the smallest emer gency CI engine modeled was close to $100,000 and

44 Memorandum from Bradley Nelson and Tanya Parise, EC/R, Inc. to Melanie King, EPA. Cost per Ton of HAP Reduced for Existing Stationary CI RICE. February 11, 2010. EPA-HQ-OAR-2008-0708-0290.137 more than $700,000 for largest emergency CI engine modele d at that time. 45 The EPA also looked at the
cost of NO x adsorbers in 2006 on new CI engines and es timated the costs for such controls on new engines also. The cost per ton of NO x reduced from a small new emer gency CI engine was about $13,000 and for a large emergency engine about $10,000. 36 The EPA also looked at the cost effectiveness of installing SCR on new CI emergenc y engines during the developed of the CI NSPS. The EPA estimated the cost per ton of NO x reduced with SCR on emerge ncy engines would range from about $240,000 for the smallest engine modeled (less than 100 HP) to close to $180,000 for the largest engine modeled (5,000 HP). As the numbers indicate, these cost per ton estimates are excessive and in no way would justify controls for emergency engines. In addition to the cost being prohibitive in the
case of aftertreatment on emergency engines, there are also feasib ility issues primarily in terms of the
effectiveness of aftertrea tment. Emergency engines need to be r eady to start up immediately in response to an emergency, but typically do not operate for a long period of time. At most, perhaps only for a few hours at a time to address emergency needs. In orde r for catalytic controls to become effective, the catalyst needs a warm-up period. Cons idering how emergency engines are designed to operate, it is also
doubtful that the controls would even be effec tive on emergency engines operating infrequently and necessitating time to start up. According to a surv ey conducted by the California Air Resources Board (CA ARB), on a yearly basis, emergency engines operate on average for 31 hours, which includes all types of operation (emergencies, required maintenan ce and testing, and interruptible service contracts) (EPA-HQ-OAR-2005-0029-0011). Regarding ozone non-attainment in particular, a nationwide rule may require reductions in areas of the country where there is no ozone non-attainment, or where ozone issues may be pollutant specific. Modeling and studies have shown that large portions of the eastern United States are generally NO x limited, which means that reducing NO x would be more effective in reducing peak ozone levels as opposed to minimizing the emi ssions of VOC. That is not to say th at limiting VOC emissions will have an insignificant effect on oz one levels, however, reducing NO x would generally be the most beneficial pollutant to reduce to lower ozone levels in the ea stern part of the country, although this can vary by
location. While there could be some benefit from a dditional reducing VOC in some areas, these areas tend to be site-specific and therefor e would be more amenable to stat e-based SIP activities as opposed to a broad national regulation of engi nes. The EPA notes that its regul ations on existing diesel engines
would not result in NO x reductions in any case, so the proposed revisions to the emergency engine

45 Memorandum from Tanya Parise, Alpha-Gamma Technologies to Jaime Pagán, EPA. Cost per Ton for NSPS for Stationary CI ICE. May 16, 2006. EPA-HQ-OAR-2005-0029-0276.138 provisions (which are mostly diesel e ngines) would have little effect on NO x emissions. The EPA believes this a reasonable argument because in so me areas of the country, placing additional control requirements on engines would likely ha ve very small benefits, but in ot her areas, the benefits of such requirements would be larger. Also, it would be most fitting to target VOC reductions in the areas that would have the largest impact or bene fit from such controls on engines. Given the EPA’s position on a Federal rule’s ability and effectiveness of addressing ozone issues across the country and in response to comment er 1011’s concerns about an increase in NO x emissions resulting from requiring management practices for existing non-emer gency 4SRB engines above 500 HP in sparsely populated areas, those concerns would be better addressed in an area -specific rule targeting
NO x reductions from these engines where ozone is a problem in NO x limited areas. The commenter is correct that based on the previous estimates of potential NO x reductions associated with the 2010 rule for existing non-emer gency 4SRB engines above 500 HP at area sources and what the Agency is finalizing in this ac tion, there is a significant drop in possible NO x reductions. However, as discussed in RTC 4.1.3, the estimated NO x reduction for the 2010 rule may have been overestimated. For the 2010 rule, a NO x destruction efficiency of 97 percent was used to estimate reductions from 4SRB engines. Industry ha s argued that that this level of control is too high and that it is not realistic to expect NO x reduction when the rule does not set a NO x emission standard. In typical
circumstances where there is no NO x requirement stipulated outside of the RICE NESHAP, the engine and control equipment (non-selective catalytic reduc tion (NSCR) and air-to-fuel ratio controller) would be optimized for CO and VOC reductions. In response to concerns from comment er 1011 regarding to an increase in NO x emissions that would result from the final rule due to the provisi ons for remote existing n on-emergency 4SRB engines at area sources that are above 500 HP, as discus sed in 4.1.3, the Agency may have, in 2010, assumed a
NO x reduction from the application of NSCR to these engines that wa s not necessarily attainable. Consequently, the benefits from NOx emissions reductions in 2010 may have been overestimated. The
issue with the NO x reduction assumed that would be achieve d with NSCR on rich burn engines was that the engine and control device would not necessa rily be tuned for a maximum reduction for NO x because
the rule does not establish a NO x limit therefore the 97 percent reduction efficiency for NO x that the Agency used is not guaranteed. Likely, affected sour ces would operate their e ngine and control device for maximum efficiency in CO and HAP reductions, to comply with the emission standards of the rule for these engines.139 The EPA also notes that the RICE NESHAP is a HAP-rule, where the Agency is required by section 112 of the CAA to establish a regulation to reduce HAP emissions fr om stationary engines through MACT or GACT for HAP. With that said, in response to commenter 1033’s concern regarding stationary engines operating on high sulfur fuel and the development of secondary PM 2.5 , the EPA is finalizing provisions that place restri ctions on the type of fuel that can be used for many existing stationary diesel engines. Starti ng January 1, 2015, the EPA will be requiring that existing emergency CI stationary RICE with a site rating of more than 100 brake HP and a displacement of less than 30 l/cyl that uses diesel fuel and operates or is contractually obligated to be av ailable for more than 15 hrs/yr for emergency DR to use ULSD fuel. Th is requirement also extends to ne w emergency CI stationary RICE with a site rating of more than 500 brake HP and a displacement of less than 30 l/cyl located at a major
source of HAP that uses diesel fuel and operates or is contractually ob ligated to be available for more than 15 hrs/yr for emergency DR. These requirement s are specified in §63.6604(b) and (c) of the final rule. The ULSD requirements will reduce emissions of HAP and other pollutants. In particular, the requirements will reduce emissions of sulfur dioxi de and sulfate particulate, both primary and secondary, more than the preexisting requirements for existing engines.

Emissions Trading Programs and Net Emissions Increases
3.1.5 Comment : When considering the impact on criteria air pollution like NO x and SO 2 , one commenter (1090) said that it is important to factor in the impact on emissions trading programs and net emissions. The commenter (1090) said that uncontrolled RICE operating in DR programs may displace other resources participating in cap and trade programs with the net impact being an increase in emissions since avoided operation from units in the cap and trad e program will create excess tradable units, plus
emissions from the RICE units.

Response : Based on information available at the time of the rulemaking, the EPA believes that what it has factored in to the analysis is reasonable and that the impacts assessed for the final rule for stationary emergency DR engines are appropriate. The possible eff ect of this rule on other programs is speculative.

Simulation of NAAQS Exceedances Ba sed on Conservative Assumptions
3.1.6 Comment : One commenter (1033) said that the EPA should use available t ools to analyze the potential RICE NESHAP impact. The commenter (1033) described a screeni ng analysis that the Delaware Department of Natural Resources a nd Environmental Conserva tion undertook to assess140 potential impacts from increased utilization of emer gency diesel RICE using AERSCREEN, which is the EPA’s recommended screening model based on AERMOD. According to the commenter (1033), results suggest that a single uncontrolled diesel RICE can exceed the new 1-hour NO 2 NAAQS and the
24-hour PM 2.5 NAAQS under varying conditions. The commen ter also described other studies that indicate the potential for adverse air quality and health impacts form in creased use of uncontrolled diesel backup generators are well-documented in peer-reviewed scientific literature. 46, 47

Response : The EPA acknowledges that, us ing conservative assumptions (as the commenter indicates were used in their screening analysis), a mode l may simulate air quality impacts equal to NAAQS exceedances under certain conditions. As noted previ ously, such analyses ar e speculative regarding actual operation, particularly if they are used to simulate emissions under circumstances not modeled.
Based on information available at the time of the ru lemaking, the EPA believes that what it has factored in to the analysis is reasonable and that the impact s assessed for the final rule for stationary emergency DR engines are appropriate.

Increased HAP Emissions
3.1.7 Comment : One commenter (1090) cited a 2003 study from Synapse that indicated that increased use of uncontrolled RICE in DR programs could re sult in increased emissions of HAP, the exact category of pollutants the NESHAP program is required to reduce.

Response : The EPA notes that the report the commenter refe rs to very clearly indicates that the findings of the study are specific to New England and should not be extrapolated to other areas. Also, the study conducted was for that particular point in time and not for curren t conditions. The study also does not
take into account the effect of ULSD on this analysis, or the hours limitation and limitation to emergency situations required in this rule.

46 Gilmore, E.A., P.J. Adams, and L. B. Lave, “Using Backup Generators for Meeting Peak Electricity Demand: A Sensitivity Analysis on Emission Controls, Location, and Health Endpoints,” J. Air & Waste Manage. Assoc. 60, 523-531, doi:10.3155/1047-3289.60.5.523 (2010); see also Gilmore, E.A., L.B. Lave, a nd P.J. Adams, “The Costs, Air Quality, and Human Health Effects of Meeting Peak Electricity Demand with Installed Backup Generators,” Environ. Sci. Technol. 40 , 6887-6893, doi:10.1021/es061151q (2006). 47 Synapse Energy Economics, Inc., Modeling Demand Response and Air Emissions in New England , prepared for U.S. EPA by Synapse Energy Economics, Ca mbridge, MA (revised September 4, 2003).141 

### 3.2 Economic Impacts

RIA Analysis
3.2.1 Comment : One commenter (1102) expressed that it ha d identified several flaws in the RIA. The commenter (1102) stated that the EPA had only estima ted emission reductions, costs and health impacts from SI RICE, but had omitted any analysis of the proposal to allow uncontrolled engines to participate in emergency DR for up to 100 hrs/ yr, which according to the commenter will increase emissions from both CI and SI engines. The commenter (1102) and commenters 1011 and 1101 also objected to the EPA’s methodology to assess benefits because they be lieved it failed to take into consideration the health benefits (or detriments) related to the pr oposed emergency DR and peak shaving programs since
the EPA failed to estimate emissions reductions (or increases) from the resulting operation of uncontrolled engines. The commenter (1102) noted th at the net benefits of the SI engine rule (considering compliance costs) are $-53 million to $35 million (3 percent discount rate) to $-60 million to $25 million (7 percent discount ra te). The commenter (1102) concluded that the net benefits are more than likely negative, it implies that the human hea lth benefits to do outweigh the cost of compliance, which calls into question the value of the entire proposal. The commenter (1102) asserted that it is th e EPA’s obligation under Executive Order 12866 to provide an assessment of the costs and benefits of this “significant regulatory action,” but the EPA should not develop an RIA for pr oposed amendments based only upon cer tain portions which they deem relevant. The commenter (1102) added that the EPA should not include an assessment of the impact of other portions of a proposal just because it “does not know.” According to the commenter (1102), it is imperative that the EPA provide an assessment of the costs and benefits related to the proposed allowance for uncontrolled engines to participate in emergency DR and peak shaving programs. The commenter (1102) concluded that because the proposal does not include such an assessment, the EPA must withdraw the proposed amendments. Commenter 1011 similarly expressed that the EPA has not fulfilled its requirements under Executive Order 12866 to sufficiently estimate the co sts and benefits of this significant regulatory action. Specifically, the EPA has not estimated the imp act of allowing emergency engines to operate for peak shaving and the EPA incorrectly assumes that there will be no increase in emissions even though 50 hrs/yr is being proposed as an allowance fo r peak shaving, the commenter (1011) said. The commenter (1011) added that the EPA does not have an inventory of stationary emergency engines and142 can therefore not assess the level and location of emi ssions increases associated with the peak shaving
allowance. The commenter (1011) pointed out that the EPA only assessed costs for st ationary SI engines admitting that it did not assess the costs and revenue of stationary diesel engines participating in emergency DR programs and operating for peak sh aving. The commenter (1011) quoted the following from the RIA to the proposed rule: “The EPA expects there will be savings and/ or income generated through participation in emergency DR programs and peak shaving operati on, but the EPA has not accounted for any potential revenue in estimating the costs and benefits of the proposed amendments . It is uncertain how frequently stationary emergency engines would operate if they are called upon. Other factors, such as the annual revenue from DR programs (which va ries), are also uncertain making it problematic to estimate the economic benefit of such programs. As such, the EP A has not estimated any costs associated with the emergency engine amendments.” The commenter (1011) agrees that it is not po ssible to predict when engines will be called to operate for emergency DR and peak shaving, but the EPA does know when these engines have operated in the past plus the revenue earned during such operation. For example, the commenter (1011) stated that information subm itted by Energy Connect, EnerNOC, and Innovative Power includes data on when different ISO called upon their resources. The commenter also reported
that there is information provided on example revenue.

Response : The EPA notes the commenter’s concerns, but as discussed in RTC 3.1 and in supporting material to the proposed rule, there is no specific information about emergenc y DR operation available that can be used to more accurately assess the impact of emergency DR operation. The EPA cannot speculate on the impacts when the number of engi nes participating in th ese programs is unknown and the EPA does not know how often the engines will be run. Operation will likely also vary by engine, location, conditions, and other factors. No one has shown that emergency engines operating for emergency DR purposes run more than 50 hrs/yr. In fact, as previously disc ussed, history shows that these engines are in fact operated well below 50 hr s/yr. The EPA does not have any indication that emergency DR operation is going to significantly increase as a result of this final rule either, and predicting annual emergency DR operation would be pure speculation. Paymen ts for emergency DR operation can also vary and determining the annual av erage payment per engine would be difficult. In terms of the commenter’s concerns about p eak shaving, the EPA is not finalizing the proposed peak shaving allowance, beyond allowing one year of lead time. In response to the commenter’s issue143 with an increase in diesel PM 2.5 emissions, the EPA is requiring in the final rule starting on January 1, 2015, that owners and operat ors of existing emergency CI stationary RICE with a site rating of more than 100 brake HP and a displacement of less than 30 l/cyl that use diesel fuel and operate or are contractually obligated to be available for more th an 15 hrs/yr for emergenc y DR to use ULSD fuel. This fuel requirement also applies to owners and operators of new emer gency CI stationary RICE with a site rating of more than 500 brake HP with a displacem ent of less than 30 l/cyl located at a major source of HAP that use diesel fuel and operate or are cont ractually obligated to be available for more than 15 hrs/yr emergency DR. This requirement will go fa r in reducing PM emissions from stationary emergency DR engines used or planned to be used for emergency DR opera tion, and will help minimize the air quality impact of emissions from emerge ncy engines operating in emergency DR programs. Requiring the use of ULSD fuel is expected to reduce the HAP emissi ons significantly from the engines compared to emissions resulting from use of unregulated diesel fuel. The EPA disagrees that the net benefits of th is rule are likely to be negative. First, the commenter ignores the fact that the EPA’s higher estimate of net benefits is positive, indicating a
likelihood that the benefits could exceed the costs of this rulemaking. Second, as noted in the RIA, the EPA was unable to quantify the health benefits associated with exposure to HAP, ozone, and NO 2 or the
benefits associated with reduced ecosystem and visibility impairment. If the EPA was able to quantify these benefits, it is likely that even the lower estimate of benefits would be positive. Third, as noted in the RIA, the benefit-per-ton estimates rely on na tional averages, which assume that the national
distribution of the a ffected engines matches the modeled emissi ons scenario. To the extent that the modeled emissions scenario included remote engines located in areas with lower population density that would not be subject to the rulemaking, the be nefit-per-ton estimates may be underestimated.

Local Government/Community Impacts
3.2.2 Comment : One commenter (1017) said that the lo w-income demographics and declining populations experienced by the majority of Kansas municipal RICE operators (median rate of population decline for Kansas Municipal Utilities members w ith RICE units was 8.7 percent between the years 2000 and 2009, with some communities declining ove r 20 percent during that time) makes it more
difficult for them to use dimini shing municipal resources to make large capital investments in communities with declining populati ons for units operated only a few dozen hrs/yr runs counter to common sense. The commenter (1017) stated that su ch funds could be used in a manner far more
healthful and beneficial manner to the c itizens of these various small communities.144 One commenter (1036) estimated the cost impacts to rural Iowa communities and concluded that the costs to retrofit RICE would be significant for local governments, already struggling with budgets that have been stretched by losses in property values and declining state and Federal financial support. The commenter (1036) challenged the EPA’s findings “that there is no significant economic impact on a substantial number of small entities (SISNOSE) for this rule.” (page 9672) and “that there will [not] be any disproportionate budgetary effect s of the final rule on any particul ar areas of the country, State or local governments, types of communities (e.g., urban, ru ral), or particular i ndustry segments.” (page 9673). The commenter (1036) said that the EPA has authority and responsibility to ensure regulatory flexibility, reduce the impact of unfunded mandates, and ensure that regulation imposes the least cost burden on society (Executive Order 13563). The comment er (1036) urged the EPA to recognize small, rural municipal and other not-for-profit entities as a distinct class of operators. The commenter (1036) suggested that the EPA could mitigate the economic impact on these entities by eliminating the April 17, 2017 sunset of authority to run 50 hrs/yr for peak sh aving. Alternatively, or in addition, the commenter (1036) said that the EPA could grant to state regul atory or regional bodies administering the rule the authority to tailor the rule so as to balance costs and benefits. For example, the commenter (1036) said, the state agency charged with enforcement of the ru le could be authorized to grant an additional one year extension for compliance or determine whether a specific operation meets the definition of

emergency.

Response : The EPA is finalizing additional flexibilitie s for the operation of emergency engines. The final rule specifies that emergency engines can be operated for up to 100 hrs/yr for emergency DR and when there is a 5 percent or greater deviation in voltage or frequency. In addition, up to 50 of the 100 hours can be used to mitigate local transmission and/ or distribution limitations so as to avert potential voltage collapse or line overloads that could lead to the interruption of power supply in a local area or region. The EPA believes these additional flexibili ties mitigate the commenters’ concerns about the economic impact of the rule.

Decrease Need for Diesel Generators to Meet Peak Demand in Some States
3.2.3 Comment : One commenter (1125) asserted that the EP A should carefully evaluate the overall need for diesel generators to meet peak demand in li ght of the states’ continued investment in energy efficiency resources and the corre sponding impact these investments have had in reducing demand and145 associated load growth. The commenter (1125) desc ribed Connecticut’s energy efficiency commitments
and investments.

Response : The EPA notes that to the extent diesel gene rators are not needed for peak demand, then the operations of those programs will reduce their use in such programs. The EPA notes that under this final rule, emergency engines cannot be used for peak demand after the one year lead time allowance has
ended. The EPA notes that Connecticut has considerable authority to restrict the use of stationary diesel generators within its state.

Electric Coop Impacts
3.2.4 Comment : One commenter (1090) expressed that th e EPA has not demonstrated how economic and public health costs and benefits are being bala nced with respect to electric coops. The commenter (1090) suggested that the EPA cons ider whether cooperatives have e ngaged in available alternative strategies as a cost-effective means to keeping electricity rates low, as opposed to promoting dirty RICE generation. According to the commenter (1090), there are many other strategies cooperatives can engage in to augment supply or decrease demand, all whic h are cleaner than allowing uncontrolled RICE units to supplement the system. The commenter (1090) pr ovided the following exampl es that electric coops can: (1) enter into long-term contr acts for bulk power (where the longer time frames helps secure lower rates as compared to the spot market); (2) invest in energy efficiency and conservation to reduce energy demand and avoid higher prices; (3) invest in tran smission and distribution upgrades to facilitate bulk power transfers and to enhance system and local reliability; (4) develop innovative, clean DR, peak shaving, and energy storage options for members to choose from; and (5) invest in new, cleaner generation. The commenter (1090) stated that cost savings and returns on investments captured by the coop members through these system enhancements, will be realized by the all of the coop members, since cooperative members are cooperative owners , by definition. The commenter (1090) added that, unlike pollution control waivers for RI CE units, these alternative strategies do not create disparate harms and benefits to cooperative members.

Response : The EPA acknowledges the commenter’s concer ns. The EPA agrees that there are other options available to electric cooperatives and encourag es alternative strategies to change the supply and decrease electricity demand. This does not change the current reality that emergency engines are now an important tool to ensure system reliability for electric cooperatives.146 Capacity Payments or Credits
3.2.5 Comment : Two commenters (994 and 1123) opposed the ability of public power utilities to receive financial compensation in the form of capacity paym ents or credits while allowing an exemption from
control for their RICE units. One commenter (994) said that the proposed amendments to RICE NESHAP represent a significant economic opportunity for owners and operators of uncontrolled RICE units in the competitive wholesale electric mark ets. The commenter (994) said that the primary reasons that DR providers sued the EPA when it initially proposed a 15-hour limit was for th e purposes of preserving their ability to qualify for capacity payments from P JM, which requires that res ources must be available for a minimum of 60 hours per summer period in order to qualify as a capacity resource and be eligible for capacity payments. The commenter (994) cited information from PJM’s July, 2012 Load Response Activity Report that confirms that capacity payments are the primary revenue sour ce for DR products and that revenues derived from PJM’s other competit ive markets, including the energy and ancillary services markets, were de minimis by comparis on to revenues earned from the capacity market. According to the commenter (994), in the aggr egate, capacity payments represent on average approximately 81 percent of the total revenues for DR providers in 2008, 98 percent in 2009, 96 percent in 2010, 95 percent in 2011, and 98 percent through Ju ly 11, 2012. The commenter (994) stated that owners and operators of uncontrolle d RICE units have a clear and ve sted interest in materially preserving these revenues because they essentially are the entire revenue opportunity for these units. According to the commenter (994), the only method in which the full value of the revenues can be preserved is through the exemption that these mark et participants sought th rough litigati on with the EPA, which has now resulted in the proposed amendments to RICE NESHAP. The commenter (994) said that according to an analysis from NESCAUM of PJM capacity auction results and clearing price results, “...in the PJM auctions for MAAC [M id-Atlantic 19 region], from 2012-2016, a backup generator would earn over $250,000 per MW, in addition to energy payments if called to operate.” The commenter (994) stated that the profitability of participating as a capacity resource is not guaranteed and that all market participants are at times influenced by additional regulatory compliance costs which necessitate a capital outlay. The commenter (994) said that uncontrolled RICE units should be treated no differently, especially because the exem ption they seek from the EPA is to allow them to

earn additional revenue through the capacity market as a capac ity resource, not simply to be operated for self-supply emergency purposes only. The comment er (994) concluded that the EPA should reject147 the fallacy that uncontrolled RICE units should not have to meet environmental standards precisely because these units have been repurposed for eco nomic gain, and that the proposed amendments to RICE NESHAP are in support of th at economic gain. The commenter ( 994) said that the EPA has been misinformed by the petitioners and others about em ergency DR programs. The commenter (994) said that, per FERC, a DR program does not include the operation of BTM generators as this practice does not “induce lower electricity use.” Instead, the commenter (994) said that a program that encourages the operation of BTM generators during “t imes of high wholesale market pr ices or when system reliability is jeopardized” is more appropria tely identified as a “load manage ment technique.” The commenter (994) concluded that because neither the EPA nor the DR petitioners have provided support that the electric generation industry may have insufficient capacity to meet the en ergy demand on high electric demand days, the commenter (994) asked the EPA to eliminate the emergency DR program exemption included in its definition of emerge ncy stationary RICE except for emer gency stationary RICE units that provide power to the grid. Two commenters (1082 and 1126) supported the abili ty of public power utilities to receive financial compensation in the form of capacity paym ents or credits while allowing an exemption from
control for their RICE units. These two commenter s (1082 and 1126) expressed concern regarding any attempt to remove the ability of public power utilities to receive fina ncial compensation in the form of capacity payments or credits. One commenter (1126) asserted that these payments and credits from wholesale power providers to its members with emergency genera ting capacity do not constitute a
financial windfall to the distribution utilities, but rather they are nece ssary cost recovery payments that keep the generating units available for emergenc y operations. Commenter 1082 stated that the EPA should not view cost recovery the same as profit as all public power systems are not-for-profit and function to maximize affordable power for the commu nities they serve over the long term—not profit economically. Further, since its members are us ually units of local or county government, the commenter (1082) added they are not-for-profit and ch arge their customers cost -of-service based rates. The commenter (1082) asserted that the EPA’s proposed rule implies that the EP A can set limitations on financial arrangements for existing RICE uni ts (77 Fed. Reg. 33818, 33820 and 33832; June 7, 2012). The commenter (1082) does not believe the CAA pr ovides any authority to the EPA to alter any business contracts. Under the CAA, the commenter (1082) asserts the EPA’s au thority is to regulate pollutants not contractual obliga tions and financial agreements. The commenter (1082) said that it is likely that newer units will need to make higher offers to sell capacity to recover their fixed costs, and are th erefore likely to be on the margin and more easily148 displaced. However, the commenter ( 1082) also stated that a coal unit requiring extensive environmental retrofits may also submit a high offe r price and could be displaced by DR.
Commenter 1082 asserted that the extent to wh ich DR could potentially displace a cleaner unit represents a flaw in the RTO-operated capacity markets, and not the RICE unit exemption. The commenter (1082) stated that the capacity mark ets operated by the RTO are generation-technology neutral, meaning that a MW of cap acity from an older, largely depr eciated power plant receives the same payment as a megawatt from a new, efficient combined cycle unit or wind turbine, despite the differentials in costs. Therefore, the commenter ( 1082) claimed, there is no mechanism for the capacity market to express a preference for a cleaner source of capacity or to place a value on fuel diversity. Because of the myriad problems with the RTO- operated capacity markets, the commenter (1082) recommended that the capacity markets be phased out and replaced with state-run bilateral contracting programs, with public power given the option to proc ure or construct capacity on their own or opt-in to state programs. The commenter (1082) believes such procurements could be designed to promote policy preferences for cleaner and more efficient generation, and would prev ent scenarios where DR or energy efficiency was a substitute for these lower emission units.

Response : The EPA agrees with the commenters that pr ovided support for the ability of public power utilities to receive financial compensation in the form of capacity payments or credits while allowing an exemption from control for their RICE units. While the EPA understands the commenters’ concerns that do not support the ability of public power utilities to receive financial compensation in the form of capacity payments or credits while allowing an exemp tion from control for their RICE units, the EPA is not limiting the ability of public pow er utilities to receive financial compensation and believes that the final rule accomplishes what the commenters are reque sting. The final rule at §63.6640(f)(2)(ii) and (iii) permits owners and operators of stationary emergenc y RICE to operate their engines for a period of up to 100 hrs/yr for emergency DR purposes or when th ere are deviations in vo ltage or frequency of 5 percent or more below standard levels. The fina l rule does not prevent any form of financial compensation from being received according to operation under §63.6640(f)(2)(ii) and (iii). However, the final rule does place restricti ons on the financial compensation for emergency stationary RICE located at major sources of HAP and existing emergency sta tionary RICE located at area sources of HAP after May 3, 2014, which may be operated for up to 50 hrs/yr in non-emergency situations. The 50 hrs/yr for non-emergency situa tions cannot be used for peak shaving or nonemergency DR, or to generate income for a facility to supply power to an electric grid or otherwise149 supply power as part of a financia l arrangement with another entity. However, this provision is being finalized because the EPA believes, consistent with comments from numerous commenters, that operation for peak shaving and economic DR is not c onsistent with emergency operation and is separate and distinct from emergency DR op eration and emergency use to ma intain voltage and frequency under §63.6640(f)(2)(ii) and (iii) of the rule. The EPA believe s the provisions of the final rule satisfy the
commenters’ concerns and that their issues are resolved. Additionally, as the EPA notes elsewhere, there are other institutions more closely connected to capacity markets and state environmental issues that may be in a better position than the EPA to meet
the concerns of commenters on this issue. The EPA notes that to the extent there is a significant economic opportunity to owners of stationary engine s to receive payment for the energy they receive, such payments can be received by any power gene rator according to the programs created by such institutions. Many of the commenter s opposing emergency engine partic ipation in such programs are similarly capable of receiving such payments a nd are likely influenced by the same motives in preserving their ability to receive such payments. The EPA does not prevent sources from operating, or require aftertreatment emission controls, solely ba sed on compensation. On the contrary, as discussed elsewhere, and as requested by the commenter, the EPA is treating emergency engines no differently than other power generators, some of which are subject to less regulati on than emergency engines. It has not required that other power generators put on further controls simply because they are paid to operate, and it would not do so for emergency engines. The EPA makes decisions based on all of the relevant factors and has determined that, ba sed on these factors, which include the cost and effectiveness of controls, the limited circumstances and the limited time for which use is permitted, and the use of ULSD, emergency engines should not have to meet the same requirements as non-emergency engines.

Pollution Control Costs Can be Offset by DR Revenues
3.2.6 Comment : Some commenters (1033, 1090 and 1022) said that the exemptions for emergency RICE are not necessary for economic reasons because pollution control costs can be more than offset by DR revenues. One commenter (1090) cited a re cent Environmental Defense Fund (EDF) economic analysis that evaluated the costs of installing emis sions controls on existing RICE engines compared with the estimated annual capacity market revenue and emergency energy price payments available to emergency RICE engines in NYISO and PJM. According to the co mmenter (1090), these evaluations found that in both ISO/RTO the payback period to RI CE owners who install emissions controls was approximately one year. According to the commente r (1090), based on costs in the 2010 EPA RIA, the150 capital cost for DOC and OCV for a 500 HP engine is approximate ly $14,000, including the costs of equipment and installation. The commenter (1090) stat ed that in the PJM RTO, annual capacity market
revenue available for a 500 HP e ngine from the 3-year period of 2013-2015 would likely total over $60,000 in the PJM Mid-Atlantic region and $30,000 in lower priced areas of the PJM RTO. The commenter (1090) added that in the NYISO, the cap acity revenue available fo r a 500 HP engine would be in the range of $20,000 per year in the New York City area. Commenter 1090 also provided other examples from the EDF economic analysis based on an assumption that the all-in dispatch cost (fuel costs, engine maintenance and emission control maintenance) for a 500 HP engi ne ($0.28/KW-hr ($280/MW-hr)) and emergency energy prices ranging from $500 to $1,000/MW-hr would result in an e ngine operating for 15 hours annually earning approximately $1,000 to $3,600 in net energy revenue, and an engine operati ng for the maximum 100 hours annually earning from more than $7,000 to $24,000 in net energy revenue. The commenter (1090) concluded that in both ISO/RTO, the capacity and energy revenues would pay for the costs of emission controls in approximately 1 year, even if they only run for 15 hours. The commenter (1090) assumed that all of the capacity and energy revenue would accrue to the owner of the engine enrolled in the DR program, recognizing that in some cases, CSP that aggregate these engines may receive a significant portion of these revenues, which would prolong the retu rn on investment for the owner that installed the
emissions controls. Another commenter (1033) provided additional ex amples of favorable DR revenue streams
within PJM and fr om a CARB report. 48, 49 The commenter (1090) added that CSP that aggregate DR resources can and have provided compliance as a service in order to facilitate pollution control installation, monitoring and maintena nce to keep RICE units operating in DR programs. The commenter (1090) described a “Clean Gen” program establishe d by EnerNOC in the San Diego Gas and Electric (SDGE) service territory. The commenter (1090) said that this program upgrades backup generators in order to use them as DR resources, and in 2007, EnerNOC sought to expand the Clean Gen Program where, at the company’s own expens e, pollution controls would be inst alled and testing and maintenance performed for certain SDGE customers, presumably because the company found it to be economically beneficial to provide these services. The comment er (1090) said that based on EnerNOC’s Clean Gen

48 Memorandum from Doug Hurley, Synapse, to Stacy Angel, EPA Project Manager, Sample Revenue for a 1 MW Backup Generation Unit , Synapse Energy Economics, Inc., Cambridge, MA (July 27, 2011). 49 California Air Resources Board, Staff Report: Initial Statement of Reasons for Proposed Rulemaking, Proposed Amendments to the Airborne Toxic Control Measure for Stationary Compression Ignition Engines (Appendix B), CARB Stationary Source Division, Emissions Asse ssment Branch (September 2010). Available at http://www.arb.ca.gov/regact/ 2010/atcm2010/atcm 2010.htm (accessed June 27, 2012).151 program, the Arizona Public Service Company (APS) performed a benefit-cost analysis on a proposed program to install pollution controls on standby generators in order to use the existing customer owned
units in the downtown Phoenix ar ea, without contributing to poor air quality. According to the commenter (1090), the results indicated total benef its of the program (measured in avoided capacity costs $46.1M and avoided energy costs $5.8M) woul d be $51.9M and total costs (technology, program and incentives) would be $41.6 M for the low diesel price scenario and $45.3 M for the high price scenario, indicating a net benefit for the program in either fuel cost scenarios. The commenter (1090)
added that the benefit to cost ratio was 1.25 for the lower fuel price and 1.15 fo r the higher fuel price. Commenter 1033 also noted that Celerity Energy Part ners San Diego, LLC, a subsidiary of EnerNOC, Inc., has a contractual arrangement with SDGE under which it has in stalled and maintained pollution control equipment on existing backup diesel generators th at allows the units to be used as DR resources and for other ancillary purposes. Commenter 1102 cited the EnerNOC and Syna pse revenue studies and concluded that Delaware’s experience is similar. According to the commenter, in Delaware , twelve non-emergency generators are permitted and all are either diesel-fired and employ SCR or are landfill gas-fired and use optimized engine controls and they all meet stringent emission sta ndards. The commenter (1102) said that without the state requirements, and under the EPA proposal, these units would be allowed to emit 5
to 14 times more NO X as uncontrolled units. Conversely, one commenter (978) provided that revenue received fromparticipating DR programs is often used to maintain the engines they have and to stay in operation and there are often not additional funds to make the necessary changes to meet the non-emergency requirements of the
NESHAP.

Response : The EPA does not disagree that in some cases revenue earned from emergency DR participation could be used towards pollution controls and possibly offset those costs. However, as the EPA has previously discussed at length, there ar e many reasons why aftertreatment controls are inappropriate for emergency engines. There could be feasibility issues with applying aftertreatment such as DOC, which the commenters mention to emergenc y engines. Aftertreatment is generally unsuitable for backup use because of the short and sporadic opera tion of emergency engines, and the need to start up immediately. Catalysts may not be sufficiently warmed up to become effective at reducing HAP emissions prior to the engine being shut down again, either because the emergenc y situation is over or the required maintenance and testing has been comple ted. Also, because these engines are typically used152 only a few number of hours per year, the costs of e mission control are not warranted when compared to
the emission reductions that would be achieved. For example, the EPA estimated in 2010 that the cost per ton of HAP reduced from an emergency engine that is operated 50 hrs/yr would be around $3 million for an engine 500 HP or more and $4 to $5 million per ton of HAP reduced for an engine between 175 and 300 HP. Clearly these costs are excessive and do not justify aftertreatment on emergency engines that do not frequently operate . Even assuming that the engines operate for the
maximum allowable hours under the fina l rule of 100 hrs/yr, the cost pe r ton of HAP removed is still substantial at more than $162,000 for engines 500 HP and more and as high as $265,000 per ton of HAP removed for engines between 100 an d 175 HP, and obviously also unwar ranted. The cost per ton of HAP removed are not justified regardless of the amount of DR revenue received. As noted by commenter 978 and other commenter s, revenue received from participating DR programs is often used to maintain the engines they have and to stay in operation and there are often not additional funds to make the necessary changes to meet the non-emergency requirements of the
NESHAP. Commenter 1056 noted that the economic benefit offsets the costs of emergency generators for its customers, and the loss of this benefit would cause the customers to pull out of their contracts. One commenter (1036) also made the statement that the cost of retrofitting engines with catalytic converters is high, and many engines cannot be retrof itted, because of their age, design, or inadequate physical space for the conversion equipment. Further, the final rule requires that owners and operators who opera te their engines for more than 15 hours per calendar year for emerge ncy DR, or who are contractually obligated to be available for more than 15 hrs/yr for emergency DR, use ULSD fuel if their engine s are above 100 HP. The cost of ULSD has a higher per gallon cost compared to other, higher sulfur fuels, and the EPA expects that any DR revenue will be used to pay for the extra fuel costs. Lastly, a requi rement to put on aftertreatment would also require periodic emissions testing that entails significan t costs and burden which needs to be considered when requiring aftertreatment.

RICE Settlement Agreement Objection
3.2.7 Comment : One commenter (1082) stated that EPSA oppos ition to the RICE settlement is based on
financial and not environmental con cerns. In contrast to alleged c oncerns about the displacement of cleaner generation, the commenter (1082) argued that EPSA fought to impede the entry of new, cleaner sources of generation (including natu ral gas) and renewable energy out of concern that such new entry would lower capacity market prices.153 The commenter (1082) claimed th at, despite the environmental be nefits of these new plants, EPSA members have gone to great lengths to bl ock their entry into the market and succeeded in obtaining Federal Energy Regulatory Commission (FERC) approval for rule changes that would create barriers to the entry of new, cleaner natural gas- fired power plants. Moreover, the commenter (1082) added, in their complaint to FERC, P3 stated that they plan to request in a future filing that these same entry barriers apply to DR and new renewable re sources. The commenter (1082) argued that these changes significantly tightened what the Minimum O ffer Price Rule (“MOPR”) which imposes a price floor on offers to sell capacity from new natural ga s units. The outcome of the MOPR change, according to commenter (1082) is to increase the difficulty fo r such new generation to clear the capacity market auctions, and creates an uncertain environment for obtaining financing for thes e plants. The commenter (1082) argued that because natural gas is a freque nt source of backup power for variable renewable power, barriers to building these plants will also indirectly hamper rene wable energy development; whereas existing power plants, such as 50-year old coal generation facilities, would not be subject to the
MOPR and could continue to eas ily clear the capacity market. The commenter (1082) concluded that EPSA’s concerns about RICE rules are not based on a sudden adoption of a pro-environment agenda but in stead are rooted in pure financial motivation. The commenter (1082) stated that the me rchant generators’ position on RICE units is one facet of an ongoing effort to constrain the capacity markets and raise pr ices, along with the previously described efforts to block the entry of new units in PJM and ISO New England. The commenter (1082) asserted that there is already unequal footing in the capacity market because the coexistence of excess earnings flowi ng to the older generators, and impediments to new generation entry into the market. The commenter ( 1082) claimed that given recently drops in energy prices, EPSA members are becoming increasingly reliant on the capacity market to boost future earnings and stated that given these strong financial motivations, one can easily conclude that EPSA’s concerns lie not with the de minimis environmental impacts of the RICE exemption, but with the potential impacts on their profitability.

Response : It has not been lost on the EPA that among th e loudest objectors to using emergency engines for emergency DR are competitors that would stand to gain consid erable advantage financially if competitor generation is eliminated from the mark et. Such competitors woul d bid their generation at higher prices than the emergency e ngines, thus increasing the cost of energy for consumers. For such154 competitors, the issue of whether other generation is more or less e nvironmentally protective may be of little interest, except as an argument to be used for market advantage.

Competitive Electricity Markets and R ecommendations to Avoid Adverse Impacts
3.2.8 Comment : One commenter (1033) recently reviewed competitive electricity markets in the NESCAUM region and current regulations of emergency and non-emergency RICE, which the commenter (1033) said is essen tial to understanding these engines’ increasing prominence. The commenter (1033) attached the report to their co mments and summarized the major recommendations needed to avoid adverse impacts from emergency generator units as follows:

 In light of the potential long-term impacts with re gard to future resource mixes in the electricity markets, an economic dispatch model to simulate the operations of the current grid mix versus a scenario where backup generators were limited in the market and/ or required to install pollution control equipment would aid air quality planne rs to understand the potential for broader impacts
and emission trends over time.

 Electric system operators (ISO, RTO) should have the authority to collect information on the
source of DR resources from aggregators and other market participants. To improve transparency, system operators should provide a breakdown of the resources in their DR programs by zone similar to the approach of the New York ISO. In additi on to being necessary to accurately determine their impact, it would be im portant for the system operator to know what comprises system resources in or der to ensure a reliable system.

 The ISO and RTO should consider separating bac kup generation resources into a standalone DR program category similar to ISO-New England to be tter track their utilization for peak shaving and emergency DR.

 The EPA should require the use of ultra-low sulf ur diesel for all backup diesel engines that participate in DR programs, similar to the ex isting requirements in most NESCAUM states.

 States and EPA should identify a reasonable timefra me for phasing out the participation of the oldest, dirtiest diesel engines in DR programs.

 Operators and aggregators of engines seeking to participate in economic or price responsive DR programs while remaining classified as emerge ncy engines and thereby avoiding air pollution emissions standards should register and enroll engi nes directly with the relevant system operator and air quality agency; other indi rect operation should be considered peak shaving and subject to air pollution emissions standards.155  Owners of backup diesel generators earning cap acity revenue as electric generators in nonemergency DR programs should be required to inst all appropriate pollution controls, taking into account population exposure, revenues received, cont rol costs, and any other relevant factors. The commenter (1033) concluded that the EPA, in collaboration with electric system operators and relevant Federal, state, and local partners, shoul d encourage the use of clean generation, appropriate demand-side management measures, a nd greater energy efficiency to achie ve system reliability needs as better environmental and energy policy than incr easingly relying on uncontrolled diesel engines.

Response : The EPA acknowledges the commenter’s remarks regarding competitive electricity markets and how to, in the commenter’s opinion prevent a dverse impacts. Regarding the comments about how an economic dispatch model could be helpful to air quality planners, this is out side the scope of this regulation. The EPA does not disagree that it would be beneficial that electric system operators know the source of DR resources, but again, this is not w ithin the scope of the rule. The EPA understands that PJM is in the process of obtaining th is type of information from their operators. During a recent meeting between PJM and the EPA, PJM indicated that it woul d be requiring enhanced identification of their DR resources for the next delivery year. The next de livery year begins June 1, 2013, which means the information would be likely be available close to that date. Gathering information on the resource mix is so mething the EPA supports and will assist in more accurately determining the impact an d emissions contribution from statio nary engines participating in emergency DR. In the final rule, the EPA is requiri ng reporting for owners and operators of emergency engines used for emergency DR or contractually obligated to be ava ilable for more than 15 hrs/yr. The
information collected from this re quirement will also a ssist in gaining a bette r picture of how many stationary engines are used for emergency DR purpos es, how frequently these engines are operated, and where these engines are located. The EPA is al so requiring starting Janua ry 1, 2015, that existing emergency CI stationary RICE with a site rating of more than 100 brake HP and a displacement of less than 30 l/cyl that uses diesel fuel and operates or is contr actually obligated to be available for more than 15 hrs/yr for emergency DR use ULSD fuel . This requirement also extends to new emergency CI stationary RICE with a site rating of more than 500 brake HP and a displacement of less than 30 l/cyl located at a major source of HAP that uses diesel fuel and operates or is contractually obligated to be available for more than 15 hrs/yr for emergency DR. These requirements are specified in §63.6604(b) and (c) of the final rule, and the EPA belie ves this addresses the commenter’s request that ULSD be required for backup generato rs participating in DR programs.156 

### 3.3 Health and Overall Environmental Impacts

Proposed Rule Lacks Supporting Technical Info rmation on Air Quality and Health Impacts
3.3.1 Comment : Several commenters (1011, 1033, 1047, 1088, 1090) were concerned that the EPA has proposed this rule without adequate information to evaluate the impact of the rule on public health, considering that in the proposal the Agency clearly st ates that it does not have specific information about
the location of the affected sources. One commenter (1033) said that the EPA’s proposed rule lacks supporting technical information on the RICE that would be subject to the rule and the air quality and health impacts of the proposed rule. According to the commenter, these critical omissions include: the number of RICE that may take advantage of the proposed rule’s pollution control exem ptions, the locations of these source, the times at which these sources may operate, the public’s exposure to increased levels of diesel exhaust and fine particulate matter from these sources, the resulting public health harms from the increased exposure to diesel emissions, the resulting impact on communities that may bear a disproportionate share of the negative environmental consequences resulting from industrial, governmental and commercial operations or policies, the resulting im pact on the ability of states to attain and maintain the ozone and other air quality health standards; the impacts on futu re resource mixes in the electricity markets from allowing uncontrolled RICE into economic DR progr ams. Without this information, the commenter (1033), as well as the EPA, is unable to evaluate the proposed rule’s prospective impacts. Therefore, the commenter (1033) requested that th e EPA withdraw the proposed tem porary allowance for uncontrolled emergency RICE to particip ate in non-emergency DR. Another commenter (1090) noted that in the January 24, 2008 ANPR, the EPA used 2005 sales data to make an approximation th at 80 percent of the estimated 900,000 existing diesel RICE units are considered emergency units. The comme nter (1090) said at the time, the EPA asserted that 10 percent of
PM and NO x emissions from all stationary RICE units came from emergency engines and therefore only a small percentage of HAP was be ing emitted from these units. Howe ver, the commenter (1090) added, the definition of emergency stationary RICE used by the EPA at the time clearly excluded engines participating in DR and peak shaving programs. B ecause previous assumptions about emissions from emergency stationary RICE failed to account for th ese activities, the commenter (1090) was concerned that the EPA has made no changes to its assumptions for this proposal. The commenter (1047) said that th e EPA’s conclusion that these units will not be used often, and presumably that their effects will then be minimal, is not certain. In contrast, the commenter (1047) is157 concerned that the market for their services may expand, along with the resulting emission increases. On the other hand, if they are unlikely to be used ofte n, the commenter (1047) suggested that perhaps there is not a need for such an expansion in the hours dur ing which they can operate without meeting emission
limits.
Commenter 1090 added that ISO and RTO also lack information on DR activity. Citing the PJM’s May 2012 load activity report, the commenter (1090) said that 64.4 percent of the DR resources were unidentified, since curtailment service providers (CSP) simply opted out of providing more detailed information by choosing the ‘other’ category. In another exam ple, the commenter (1090) said that the Midwest ISO identified a total of 7,376 MW of DR resource in 2011 with over 40 percent (3,001 MW) identified as BTM generation and 930 MW as emergency DR. The commenter (1090) stated that the percentage of capacity from RICE units, specifi cally, is not known. One commenter (1033) said that there has been little change in available information since NESCAUM first attempted to identify the locations of stationary diesel backup generators in 2003, which estimated the possible existence at that tim e of over 30,000 units in the NESCAUM region with a combined capacity exceeding 10 GW. The commenter ( 1033) said that available national estimates suggested as many as 350,000 installed units with a capacity totaling more than 127 GW. According to the commenter, the order of magnitude difference in emissions from uncont rolled diesel engines (particularly during the ozone season) makes even a sm all fraction of the total diesel engines used for DR programs problematic for air qua lity, and the lack of informati on on their locations and potential
utilization as a result of the RI CE NESHAP proposed rule can pose significant problems for informed air quality planning. One commenter (1033) said that it has been stat ed (EnerNOC Review of Comments) that backup RICE have been rarely called upon by electric system operators to address emergency needs, and that this is likely to remain the case in the future. Th e commenter (1033) noted th at emergency RICE have not previously been allowed to participate in no n-emergency programs, and there is no historical experience from peak shaving or ot her non-emergency programs to inform air quality planners on the potential future impacts of expande d emergency RICE utilization. The commenter (1033) described capacity commitments within the PJM control area, c oncluding that it appears that a significant portion of the commitments is coming from entities deploying backup generators, either feeding directly to the grid or behind the meter generation. The commenter (1047) said that the EPA has not made a sufficient case for the need for such a significant expansion in the number of hours exempt from emission limits for DR and peak shaving158 (from 15 to 100), especially in light of the serious a dverse public health impact s that these emissions can cause. The commenter (1047) recommended that th e EPA collect additional information about the
number and location of the affected units and conduct additional modeling and analysis of the consequences of the rule befo re concluding that the expanded hours would not be problematic. Commenter 1011 added that the EPA also only estima ted the health benefits associated with the proposed changes for stationary SI engines. The commenter (1011) sa id that the EPA claimed that analytical limitations prevented it from providing a comprehensive estimate of PM 2.5 -related benefits and subsequently uses a benefit-per-ton approach based on the amount of NO x emissions that are expected to be reduced, as a surrogate for PM 2.5 . But, according to the commenter (1011), this method fails to consider the health benefits (or detriments) related to the proposed allowance for emergency DR and peak shaving because the EPA has not assessed th e reduction (or increase) in emissions from such use. Commenter 1011 strongly objected to the lack of analysis because of unknown information and argued that it is imperative that the Agency prov ide a complete analysis of the impact of allowing uncontrolled engines to run for emergency DR and peak shaving purposes. Until a thorough analysis is completed, the commenter (1011) said th at the proposal should be withdrawn. One commenter (1090) stated that the EPA lacked data to conclude that uncontrolled stationary
RICE located in remote areas will not be negatively impact public health. The commenter (1090) said that in establishing the definition of ‘remote stationary RICE’, the EP A used distance limits of 220 yards and 0.25 miles relating to housing density to qualify certain engine locati ons for pollution control exemptions. According to the commenter (1090), the EP A has not provided scientific data or evidence to support the conclusion that public health will no t be harmed if pollution control exemptions are granted to RICE units located in areas that meet these distance and housing density thresholds. Without this type of information, comment er 1047 did not believe the EPA cannot reasonably determine that the expansion of uncontrolled emissions will not have a deleterious effect on public health.

Response : The EPA is not finalizing the proposed tempor ary 50-hour allowance for existing stationary emergency engines located at area sources engaged in peak shaving and other non-emergency use as part of a financial arrangement with another entity, which was proposed to expire in April 2017. Instead,the final rule allows the us e of existing stationary emergency engines located at area sources for 50 hrs/yr prior to May 3, 2014, for peak shaving or non- emergency DR solely to provide leadtime before
the allowance is eliminated. In consideration of th e short compliance window between the final rule and the compliance dates of May 3, 2013 and October 19, 2013, the EPA finds it appropriate to provide159 some lead-time for sources to come into complian ce with the requirements that apply to non-emergency engines. The purpose of the proposed amendments was to address issues raised by various stakeholders through several petitions for r econsideration of the 2010 RICE NESHAP amendments and other communications. The EPA has acknowledged that it ha s limited information a bout the whereabouts of engines used for emergency DR purposes and how many engines are used for this purpose. However, as a result of this final rule, the EPA will be obtaini ng information on engines used for emergency DR purposes where these engines are either used for more than 15 hrs/yr or that are contractually obligated to be able to operate fo r more than 15 hrs/yr. Owners and operators of these engines must submit annual reports to the EPA, as specified in §63.6650(h) of the final regulations. The Agency will obtain information about the location of the engines, the type of engines being used for emergency DR, how frequently and when the engine operated for emerge ncy DR, and which entity dispatched the engine, among other things. This provision is also required for owners and operators of existing emergency engines at area sources of HAP that operate for non-emergency situations up to 50 hrs/yr under §63.6640(f)(4)(ii) of the final rule. Additionally, we have received updates to draf t data submitted from EnerNOC that included draft updates to PJM’s draft data collection results for Business Segm ents, Load Reduction Methods and On-Site Generators’ Fuel Type. Based on these update s (as of October 19, 2012), several changes to the
PJM initial draft data submitted ha ve been made (e.g., diesel fuel type usage was reduced from 82 percent to 63 percent, manufacturing load reduction for manufacturing has increased from 10 percent to 31 percent). 50
The EPA believes that the numbe r of hours of operation (50 hrs/y r) for emergency engines that it has used to model emissions from emergency engine s is still appropriate. The commenter has not shown that emergency engines would operate more than this, particularly given that the revisions finalized in this rule allow operation beyond 50 hours only in carefully circumscri bed emergency conditions. As the EPA has discussed in the impacts memorandum to the final rule 51 and elsewhere in this RTC document, the appropriateness of using 50 hrs/yr for purposes of estimating impacts because the EPA does not believe that the provisions finalized in this rule will lead to use of em ergency engines beyond the 50

50 Email from Don DiCristifaro, EnerNOC to Melanie King, EPA. Revised PJM Load Activity Report for Demand Response Summary. Draft Data Collection Results for Business Segmen ts, Load Reduction Methods and On-Site Generators’ Fuel Type. EnerNOC. December 21, 2012. 51 Memorandum from Tanya Parise, EC/R to Melanie King, USEPA, regarding RICE NESHAP Reconsideration Final Amendments - Cost and Environmenta l Impacts Memo. January 14, 2013.160 hour average use per year estimated in the 2010 rule. The 50 hour estimate is still appropriate because the engines are not expected to be used on average more than that. The EPA discussed this more in a
memorandum for the final rule. 47 Further, based on available information from a study conducted by the CA ARB, previously used to estimate the hour s of operation of emerge ncy engines (EPA-HQ-OAR2005-0029-0011) and also discussed in the 2010 final rule for existing CI engines (75 FR 9661), showed that emergency engines operate for a total of 31 hrs/yr on average for all purposes. Of that, maintenance and testing accounted for the largest portion at 22 hrs/yr. There is no r eason to believe that maintenance and testing hours would increase subs tantially in the future and the EP A believes 22 hrs/yr or less than 2 hours per month will sufficiently cover maintenance a nd readiness testing requirements. This means that a remaining 28 hrs/yr are left for other emergency use prior to reaching the Agency’s modeled estimate of 50 hrs/yr for total emergency usage. Again, as the record shows, for example in a summary of emergency DR events in Eastern PJM, 52 emergency DR events are typical ly brief, rare in occurrence, and normally last less than 6 hours. Emergency engines may not even be called upon to operate at all in a year. An emergency engine could hypothetically ope rate for emergency DR response for 28 hrs/yr and still be within the Agency’s modeled hours of opera tion. It is possible that em ergency engines could be called upon and respond for more than 28 hrs/yr, but it is unlikely based on hist orical data. With that said, there are many emergency engines, as stated that may not operate at all in a year for emergency DR and some that operate for very few hours. Th erefore, for purposes of estimating impacts from emergency engines, as a national average that is re presentative of all emerge ncy DR operation, the EPA believes that 50 hrs/yr is justifie d. Anything beyond 50 hrs/yr would not be supported by the facts in the record and the EPA does not have any information to support a particular number or how many engines would be operated more frequently than 50 hrs/yr. The EPA disagrees that it did not properly es timate the benefits of this rulemaking. The EPA’s approach for estimating PM 2.5 -related benefits has been extensively peer-reviewed and this approach is consistent with many previous EP A analyses. Specifically, the benefit-per-ton approach provides
estimates of PM 2.5 -related health benefits that reflect pr emature mortality as well as 11 morbidity endpoints. While there are uncertain ties inherent in using benefit-per-ton estimates, the resulting PM 2.5 - related benefits are just as comprehensive as t hose estimated using scenario-specific modeling. A key

52 See Attachment 6 of Letter from Richard H. Counihan, EnerNOC to Michael Horowitz, et al., EPA. February 29, 2012.Entitled “Addendum to Analysis of Emergency DR and Ozone Concentrations.” Prepared for EnerNOC by Blue Sky Environmental. February 2012. EPA-HQ-OAR-2008-0708-0839.161 limitation of this approach is that it does not provide an estimate of the associated ozone co-benefits, for which the EPA provides a qualitative assessment of these benefits.

Formaldehyde Regulation
3.3.2 Comment : One commenter (1082) does not dispute th at formaldehyde s hould be regulated. However, the commenter (1082) acknowledges that th ere are still ongoing disc ussions at the National Research Council (NRC) and Nati onal Academies of Engineering regarding the manner in which formaldehyde should be regulated. In light of the NRC’s expression that formaldehyde is subject to overly stringent regulatory actions re sulting from flawed determinations of risk by the Integrated Risk Information System (IRIS) data, the commenter (1082) said that allowi ng RICE units to be used in anticipation of, or during, emergenc y situations remains consistent w ith the EPA’s charge to protect human health under the CAA. The commenter (1082) a sserted that reduction in formaldehyde emissions can still be achieved if the EPA adopts the commenter ’s (1082) suggested hours of operation in the final rule. The commenter (1082) also argued that this overall reduction would not be harmed by removing the proposed rule’s “sunset” after August 16, 2017. The commenter (1082) stated that, as any engines used more than 1.1 percent of the hours in a year would be required to meet the EPA requirements, the suggested improvements would retain overall eff ectiveness and significantly reduce formaldehyde
emissions.

Response : The RICE NESHAP has been promulgated under s ection 112(d) of the CAA. It is not a riskbased rule, but based on available control t echnology for listed HAP (including formaldehyde). Therefore, the NRC’s report has no bearing on this CAA section 112(d) rule making. Although there are ongoing IRIS discussions with the NRC, there is no dis pute that there is the potential for adverse health risks associated with exposure to formaldehyde. The National Academy of Sc iences panel convened by the NRC’s report also found that the Agency sufficie ntly supported its conclu sions that formaldehyde can irritate eyes, noses and throats and cause respir atory lesions. It also ba cked the EPA's conclusion that formaldehyde exposure causes can cer in the nose and upper throat. 53 With that said, t he EPA will
review the health and risk con cerns for formaldehyde in the futu re under regulations covered under section 112(f) of the CAA.

53 Review of the Environmental Protection Agency’s Draft IR IS Assessment of Formaldehyde. 2011. Committee to Review EPA’s Draft IRIS Assessmentof Formaldehyde; NRC.162 In terms of the permitted use of emergency engi nes, the EPA agrees with the commenter that engines should be allowed to be used during emerge ncy situations, as defined in the final rule at §63.6675. The EPA does not agree, howev er, that emergency engines shoul d be allowed to be used in anticipation of emergency situati ons. The EPA is not finalizing the proposed temporary peak shaving allowance set to expire in 2017 because the allowance is not consistent with use of these engines as emergency engines, given that peak shaving is clearly a manner to ensure capacity in high-demand situations, rather than reliability in emergency situations. The allo wance is not needed to maintain electric reliability and alternative methods for meeting peak demand are available.

Adverse Health and Environmental Impacts
3.3.3 Comment : Some commenters (1033, 1090 and 1102) provide d an extensive summary of why they
believe that diesel exhaust a nd its components cause or contribute to significant health and environmental impacts. Two commenters (1033 and 1090) described how the complex mixture of fine particles and chemicals contributes to cancer risk, non-cancer health effects, respiratory conditions and heart conditions, acid rain, harmful ozone and smog le vels and visibility is impaired. The commenters (1033, 1090, 1102) noted that diesel exhaust has been classified as a known carcinogen by the WHO and State of California and as a probably or likel y human carcinogen by the EP A. One commenter (1090) said that the Agency’s failure to quantify a unit cancer risk for diesel exhaust is inconsistent with the extensive body of science that is in fact demonstr ating such risk. According to the commenter (1090), the fact there is uncertainty involved in quantifyi ng the dose-response relationship does not in any way mean that rigorous and quantified cancer risk anal yses cannot be produced. The commenter (1090) said that there are multiple approaches available to describe and even quantify uncertainty, and the EPA should move forward and quantify the number of can cer cases associated with exposure to diesel exhaust, as this is imperative to better assess the fu ll health effects of diesel emissions, as well as the benefits of reducing these emissions. The commenter (1090) concluded that once the EPA has quantified
the number of cancer cases associated with diesel exhaust, the full assessment of health effects and benefits will be able to more completely account fo r the advances in diesel engines and the impact of advanced technologies in reducing or altering cancer risk. The commenter (1090) then provided a more extensive discussion of the data supporting
conclusions that diesel exhaust is associated with a wide variety of non-cancer he alth effects (pages 8 to 10), health impacts of fine PM (“soot”) (pages 10 to12), health impacts of ground level ozone exposure (pages 12 to 13), health impacts of the more than 600 toxic chemicals contained in diesel exhaust (pages163 13 to 14) and health impacts of exposure to NO x , CO and non-methane hydro carbons (NMHC) emitted by uncontrolled SI RICE (pages 14 to 15). Commente r 1033 added that the RICE NESHAP exemptions
will result an increase in the utilization of uncont rolled RICE in non-emergency DR and peak shaving programs will lead to increased diesel exhaust dur ing the 5 years of the allowance. The commenter (1033) said that compounding the increase in diesel exhaust is the accompanying attribute that these relatively small and widely distribu ted sources are often located in h eavily populated areas and have low stacks with poor dispersion. The commenter (1033) concl uded that this leads to a higher likelihood that large segments of the general population living and working near stationary diesel engines will be exposed to increasing levels of HAP from diesel exhaust. One commenter (1047) said that th e EPA recognizes that diesel-fired RICE emit a substantial number of air pollutants that are harmful to human h ealth including diesel exhaust, criteria pollutants, volatile HAP and metallic HAP, in cluding some that are classified as carcinogens. The commenter (1047) stated that these emissions and the resulti ng air pollution (e.g., ozone) are linked to a variety of adverse health impacts, including such serious pr oblems as respiratory and cardiovascular ailments, cancer and premature mortality. The commenter (1047) concluded that the EPA should ensure that its final regulations adequately address emissions fr om RICE and their impacts on public health. In particular, the commenter (1047) is concerned that the EPA’s proposal to expand the hours for DR and provide an allowance of 50 hours until April 2017 for peak shaving may significantly increase diesel and other emissions, often in highly popu lated areas where many RICE ar e located, and adversely affect public health. Commenter 1102 said that the EPA’s proposal to allow uncontrolled engines to participate in emergency DR and peak shaving will expose the pub lic to high concentrations of a now confirmed carcinogen, exacerbating the air quality and health imp act to a public already exposed to high ground
level ozone and PM. Commenter 11 02 said that the EPA should w ithdraw its proposed amendments until it can develop a full assessment of the impact to human health and the environment.

Response : The EPA does not disagree that the pollutants in diesel exhaust are harmful to humans and
the environment. In EPA’s 2002 Diesel Health Asse ssment Document (Diesel HAD), exposure to diesel
exhaust was classified as likel y to be carcinogenic to humans by inhalation from environmental exposures, in accordance with the revised dr aft 1996/1999 EPA cancer guidelines. The EPA also concluded in the 2002 Diesel HAD that it was not po ssible to calculate a can cer unit risk for diesel
exhaust due limitations in the e xposure data for the occupational groups or the absence of a dose-164 response relationship. Since 2002, several new studies have been published which continue to report increased lung cancer with occupationa l exposure to older engine diesel exhaust. The newer studies add
to the evidence the EPA evaluated in the 2002 Health Assessment Document a nd further reinforce the lung cancer hazard concern. However, a systematic review of the new da ta would be needed before the
EPA could determine whether these new studies support the development of a dose-response relationship for diesel exhaust. As the rule is technology-based and not risk-b ased, determining a dose response relationship is not required as part of rule development. The RICE rule under section 112(d) of the CAA is not a riskbased rule, and is based on available control tech nology for emergency engines. The EPA will review risk in the next set of regulations under section 112(f) of the CAA. Under section 112(d), the EPA is currently requiring all existing and new non-emerge ncy diesel engines above 300 HP, which includes engines at major sources as well as engines at area sources, to reduce their HAP emissions significantly by using DOC, or other control measures to achieve pollutant levels commensurate with those achieved through DOC. Controls used to reduce HAP from dies el engines will also reduce PM and CO emissions, though the magnitude of reductions depends on the c ontrol device. Also, through the CI NSPS (40 CFR part 60, subpart IIII), all new non-emergency diesel e ngines are subject to the most stringent emission levels, via manufacturer certifica tion and compliance with nonroad Tier 4 emission standards, in most cases. New emergency diesel engines ar e also regulated in the CI NSPS to stringent leve ls (as stringent as, or more stringent than, the most stringent standards that were in ope ration at the time of the final CI NSPS rule). Owners and operators of existing small diesel engine s (less than 300 HP) and existing emergency diesel engines, must follow specified maintenance interv als to ensure their engines are operating properly and at peak efficiency. It was de termined in 2010 that checking and replacing the oil and oil filter, air cleaner, hoses, and belts are the mo st important components to maintain in order to ensure proper operation for minimizing HAP emissi ons. Therefore, the RICE NESHAP requires these parameters to be maintained or checked and repla ced on a regular basis. For the first time, the EPA is establishing requirements for exis ting emergency diesel engines le ss than or equal to 500 HP and existing emergency diesel engines at area sour ces. Prior to the 2010 regulations, there were no regulations in place for these statio nary engines. Therefore, the EPA is addressing a substantial number of diesel engines through differen t subparts and stages of rulemaki ngs and is subsequently limiting diesel exhaust emissions through aftertreatment were that was determined feasible or through maintenance practices. The EPA notes that the rule s promulgated under section 112(d) of the CAA are165 technology-based, and any future re gulations under section 112(f) of the CAA will take into account appropriate health and risk-based issues. As discussed elsewhere, the re visions allowing further use of em ergency engines in this rule limit use of emergency diesel e ngines to conditions directly rela ted to emergency use and critical reliability issues. The EPA does not believe that the pr ovisions finalized in this rule will lead to use of emergency engines beyond the 50 hour average us e per year estimated in the 2010 rule. Also, in this final rule, in a ddition to specifying very specific conditions during which emergency engines can be operated for emergency DR ope ration and non-emergency operation, the EPA is requiring that any emergency engine above 100 HP that operates more than 15 hrs/yr for emergency DR purposes or that is contractually ob ligated to operate for more than 15 hrs/yr must use ULSD fuel. The ULSD requirement will lead to HAP and other pollu tant reductions. Finally, the EPA is requiring that owners and operators of these engi nes be held further accountable for their operations by requiring them to submit annual reports to the EP A documenting their engine usage fo r emergency DR operation. This new information will be helpful to the EPA in future reviews of these engines.

Adverse NO 2 Health Impacts
3.3.4 Comment : The commenter (1033) discus sed the health impacts of NO 2 and noted that the localized
nature of NO 2 may not be readily-observed with the cu rrent national air monitoring network. The commenter (1033) said that uncontrolled older diesel RICE that predate Tier 1 emission standards have very high NO x emission rates, of which NO 2 is a primary component. The commenter compared NO x rates of uncontrolled pre-Tier sta tionary diesel engines with NO x rates of newer higher Tier-level diesel engines subject to emission limits. The commenter said that as another point of reference, a baseload coal-fired power plant equipped with SCR can have a NO x emission rate around 1.0 lb per MW-hr. This is over an order of magnitude less than an uncontrolle d diesel RICE, and even lower than most of the
newer Tier limits. The NO x difference is much higher (over two orders of magnitude) when diesel is compared to new combined cycle or simple cycle tu rbines that emit at about 0.1 and 0.2 lb per MW-hr, respectively.

Response : The EPA appreciates the comme nters’ concerns. The RICE ru le under section 112(d) of the CAA is not a risk-based rule, and is based on ava ilable control technology fo r emergency engines for listed HAP. Nitrogen dioxide is not a listed hazardous air pollutant. Th e EPA will review risk regarding listed HAP in the next set of regula tions under section 112(f) of the CAA.166 Adverse PM 2.5 Health Impacts
3.3.5 Comment : Commenter 1033 expressed concern regardi ng the health impacts associated with
PM 2.5 . The commenter (1033) expressed particular concern that incr eases in black carbon emissions from diesel exhaust suggest that potential public health problems can arise when multiple uncontrolled backup diesel RICE are collectively operating over l onger time periods to generate electricity in a localized densely populated urban area. The commenter (1033) stated that their concern is borne out in the air quality modeling st udies cited elsewhere in their comments on identified information gaps.

Response : The EPA appreciates the comme nters’ concerns. The RICE ru le under section 112(d) of the CAA is not a risk-based rule, and is based on ava ilable control technology fo r emergency engines for listed HAP. Also, PM 2.5 and black carbon are not listed HAP. The EP A will review risk in the next set of regulations under section 112(f) of the CAA. The EPA notes that se veral of the provisions in the
NESHAP will reduce emissions of PM 2.5 , and that the provisions adding requirements for use of ULSD for emergency engines in certain circumstances will reduce PM 2.5 emissions from such engines.

Amendments Will Have No Adverse Health or Environmental Impacts
3.3.6 Comment : Two commenters (1082 and 1314) support th e EPA’s conclusion that its proposed amendments will result in negligib le additional pollution and have no adverse health or environmental impacts. One commenter (1082) stated that it aske d Blue Sky Environmental (Commenter 1043 in this document) to review the use of RICE to respond to questions or assertions made during the EPA public hearing (conducted on July 10, 2012) on the RICE rule reconsideration wherein some witnesses stated that human health consequences were a certainty as a result of running RICE units under the number of hours that the Agency is considering under the re-pr oposed rule. The commenter (1082) asserted that the results included in Appendix A of its comments shoul d give assurance to the EPA and state agencies that the running of these RICE units do not cause exceedances of air regulations and may well mitigate against far worse human health effects resulting from extreme weather events (heat or cold). Thus, the commenter (1082) believes that the EPA’s proposed language will, at most, result in a negligible increase in air pollution. The commenter (1082) added that it is important to note that many RICE units are considered “dual-fuel” engines, and as such are operated prima rily on natural gas. According to the commenter (1082), roughly 90 to 95 percent of the fuel used by dual fuel engines is cleaner burning natural gas,167 resulting in lower emissions from ut ility RICE units than may have be en suggested by others during the public hearing. The commenter (1082) stated that DR does not necessarily represent a reduction in energy consumption and is therefor e not inherently environmentally beneficial. The commenter (1082) further stated that, although it is correct that some DR measures may involve a reduction in total electricity use, such as direct-loa d control of lighting or air-conditioni ng, this is not necessarily part of DR. The commenter (1082) explained that other types of DR may simply involve the shifting of energy use from one time period to anot her without a total reduction in us e. The commenter (1082) explained that, for example, a factory could shut down a pr oduction line during a peak period load curtailment request, only to increase production overnight. In such a case, the commenter (1082) asserted, the extent to which there is any environmental benefit would depend upon the mix of generation that is displaced or increased during on and off-peak time periods. Th e commenter (1082) added that this uncertainty regarding the environmental benefit from DR is su mmarized by the Regulatory Assistance Project in a study (May 2010) of the role of capacity markets in reducing carbon emissions. One commenter (940) noted that their 8 to 10 HP natural gas “WITTE” e ngines are several miles from the nearest receptors and the health risk associat ed with their emissions is minimal. They asserted that, since the standard is based on toxics and hea lth risk impacts, exclusion from the standard should
not be considered a roll back.

Response : No response is needed.

Electric Grid Stability Impact Considerations
3.3.7 Comment : The commenter (1142) believes that many states support the use of engines for emergency DR primarily because oc casional use of emergency DR is superior to having all emergency engines run in the event of a blackout. The comm enter (1142) added that while Delaware and its supporters claim that emergency DR is bad for the environment; numerous stat es disagree with this assertion. These states, according to the comment er (1142), understand the importance of having a subset of emergency engines availabl e to grid operators and utilities fo r a short time to avoid losing the electric grid rather than waiting fo r the electric grid to be lost, thereby causing enormous economic, environmental and health and safety damage.

Response : The EPA agrees.168 Environmental Impact and Equity Issues
3.3.8 Comment : One commenter (1001) stated it takes no pos ition on the environmental impact of the proposed rule nor the equity issues associated with whether the latitude provided to RICE resources is
inconsistent with the level of e nvironmental regulation of larger ge neration resources. The commenter (1001) asserted that these environmen tal and equity issues raise larger policy questions associated with the scope of environmental regulatio n as between large generation units and small RICE units that are uniquely within the province of the EPA to address.

Response : No response is needed.



### 3.4 Environmental Justice Impacts

Environmental Justice Analysis
3.4.1 Comment : One commenter (1090) asserted that the EPA failed to perform an environmental justice analysis of this rule in spite of the plentiful ev idence that suggests one should have been completed. The commenter (1090) stated that the proposed rule pr ovides special treatment for RICE units located in
remote areas and RICE units located in rural electric cooperatives and that the proposal is also likely to contribute to increased pollution in urban areas. According to th e commenter (1090), these special provisions and disparate impacts lik ely result in the Agency failing to meet its own environmental justice criteria for “fair treatment” and/or “meaningful involvement.” With respect to rural electric cooperatives, the commenter (1090) expressed that the EPA justifies its proposal to expand the use of uncontrolled RICE units for DR and peak shaving as strategies to “maintain the cost of power as low as possible” in some of the “most economically depressed areas of the country.” The commenter (1090) said that esta blishing pollution control waivers aimed at reducing costs to specific entities (cooperatives), while not considering public health impacts or trans-boundary pollution transport, could constitu te unfair treatment. The commenter (1090) added that failure to perform an environmental justice analysis also seem s inconsistent with the recently signed interagency “Memorandum of Understanding on Environmental Justice and Executive Order 12898,” which
reaffirmed the commitment of covered Federa l agencies in identifying and addressing “disproportionately high and advers e human health or environmental effects of its programs, policies and activities on minority populations and low-income populations.” The commenter (1090) further stated that the EPA is potentially creating inequities between cooperative members and RICE unit owners. The commenter (1090) repo rted that a cooperative member169 that is the owner of a RICE unit receives payments for participating in peak shaving and DR programs,
but does not share those benefits with other cooperative members. Th e commenter (1090) stated that while other cooperative members will r eceive benefits in the form of pot entially significant reductions in electricity costs, the costs of increased pollution to these local members are not taken into account. According to the commenter (1090), by waiving the po llution control requirements, the owner of the RICE unit is externalizing 100 perc ent of the pollution costs to other local members (realized through negative health impacts) while, potentially, capturing the majority of the benefits. The commenter (1090) believes that the EPA’s wa iver for pollution control requirements for SI RICE in remote areas could have significant public health impacts. The commenter (1090) expressed concern that potentially affected communities may not be aware that this rule could impact them because they do not have information about the existence or location of nearby RICE units, and therefore, may not have been meaningfully involve d in the process. The commenter (1090) added that this exemption seems inconsistent with the EPA’s r ecent actions to reduce toxic and criteria emissions at oil and natural gas operations, especially statemen ts in the April 17, 2012, final rule that acknowledged the powerful impact that RICE units have on facili ty-wide risk assessment for oil and natural gas operations where the EPA said that he risk is prima rily “driven by emissions from reciprocating internal combustion engines”. According to the commenter (1090), the EPA is cr eating a second-class of rural citizens within their remote areas definition by creating an incentive to locate uncontrolled RICE in areas that meet the “not located near a pipeline” portion of the remote areas definition. The comment er (1090) stated that the proposed rule changes may cause fewer people to be impacted because engines will be placed in remote areas, but the impacted people will be exposed to much more air pollution because of the elimination of basic controls and the higher num ber of engines near them. The commenter (1090) expressed that this portion of the rule is di rectly at odds with the Agency’s commitment to environmental justice, which aims to avoid dispar ate impacts through fair trea tment of all groups of people.

Response : Executive Order 12898 directs the EPA to the gr eatest extent practicable and permitted by law, to make environmental justice part of its mission by identifying and a ddressing, as appropriate, disproportionately high and adverse hum an health or environmental effects of its programs, policies and activities on minority populations an d low-income populations in the United States. Consistent with Executive Order 12898 and the Presidential Memorandum that accompanies it, the EPA’s environmental170 justice policies promote environmental justice by fo cusing attention and Agen cy efforts on addressing the types of environmental harms and risks th at are prevalent among minority, low-income and indigenous populations. Executive Orde r 12898 and the Agency’s environmental justice policies do not mandate particular outcomes from an action, but they demand that decisions involving the action be informed by a consideration of environmental ju stice issues. Additionally, Executive Order 12898 does not require that a demographic analysis be conduc ted. Due to data limitations as outlined in the preamble to the proposed rule, the Agency was not able to conduct a demographic analysis. The EPA discussed environmental justice in the preamble of this rule an d asked for public comment on the proposed rule. As noted in the proposal preamble, w ith regards to SI RICE, the EPA did not have and
has not received sufficient information on the location of the stationary RICE affected by this rule to conduct a public health impacts analysis of stationary RICE in remote areas. Given that the Agency did
not receive additional information re quired to conduct a demographic analysis for this rule, the proposal was informed by the data available. With regards to the EPA’s recent actions to redu ce toxic and criteria emissions at oil and natural gas operations, the subject facility-wide risk assessm ent referred to by the commenter (of which RICE unit emissions were included) was conducted for oil and natural gas operations because the rulemaking included a risk component under section 112(f) of the CAA. The RICE NESHAP is developed under section 112(d) of the CAA and is not a risk-based rule, but is based on available control technology for listed HAP. The EPA does not agree that the rule w ill create an incentive to locate stationary RICE in uncontrolled areas. The distinction for remote SI engi nes only applies to existing engines, so it would not be applicable for the placement of new engines. In addition, an engine must be located in a remote area as of the October 19, 2013, initial compliance date in order to be considered a remote stationary RICE. Thus, engines that are moved to remote areas after that date would not be able to qualify as

remote. In addition, in taking steps to understand the imp acts of the rule, the EPA considered impacts on the cost of electricity which has the potential to impose adverse economic impacts on a community. While the EPA takes no position on any potential ine quities between cooperative members and RICE owners, this assertion does not raise an environmenta l justice issue. Additionally, after this rule was proposed the Agency conducted activities to promot e meaningful public involvement by coordinating conference calls for environmental justice communiti es and for tribes. Additionally, EPA Region 10 has
conducted various forms of outreach around this rule in Alaska. The EP A did not receive any additional data to inform the decision making for this rule, a nd therefore the EPA was unable to develop additional171 requirements for rural units. Simila rly, the EPA also does not have any information to understand the impacts on these communities.

Insufficient Docket Support for No Envi ronmental Justice Impacts Conclusion
3.4.2 Comment : One commenter (1102) stated that the EPA ha s not included sufficient information in the docket to justify a no impact conclusion. Th e commenter (1102) noted that the EPA has not identified the locations of emergenc y generators that could participat e in the program, especially on HEDD when ozone concentration is high. The comme nter (1102) said that these generators, with typically short stacks and emissions released close to the ground, can have a significant impact on densely populated areas which tend to classified as environmental jus tice areas. Also, according to the commenter (1102), data show that the vast majority of emergency generators are older, diesel generators. The commenter (1102), said that the EPA has underestimated the air quality impacts due to assumptions about the amount of time emergenc y engines would run, how many engines are in existence, the emissions characteristics of the engine s, and that these engines are often co-located at hospitals and schools in densely populated areas. The commenter (1102) said that these potential environmental justice issues need to be analy zed further, consistent with Executive Order 12898. Another commenter (1076) stated the EPA does not know the envi ronmental justice implications associated with the proposed rule, because as the Ag ency has acknowledged, the Agency is not aware of the location of diesel engines. In the commenter’s (1076) opinion, it is possible that many diesel engines
will be located in urban areas with a high proportion of minority residents. Also, it is possible that diesel engines exist in low-income rural communities, th e commenter (1076) said. The emissions from such diesel engines are particularly dangerous given th e engines’ ground-level emissions. In the absence of more information about the location of the diesel engi nes in questions, it is impossible to state with any certainty whether the rule will disproportionately affect low-income and minority communities. The Agency must conduct a thorough analysis of the environm ental justice implications of the rule in order to comply with its own guidelines under Title VI of the CAA. Without such a review, the EPA would be arbitrary and capricious.

Response : As mentioned above because the Agency was not provided with the additional information required to conduct a demographic analysis for this ru le the EPA used what was available to inform the development of this proposal. Furthermore, the EP A has no data available that indicates that the locations of these engines are disproportionately in ar eas that are “classified as EJ areas.” In order to172 minimize the impact of the emissi ons from these sources, the EP A has limited the allowable non emergency operation to emergency s ituations when there are grid st ability concerns, and testing and maintenance necessary to ensure that the engine w ill operate properly. Availabl e information shows that these engines have historically rarely operated for DR purposes. 54 As mentioned above the EPA conducted as thorough an analysis of the EJ implications of this rule as was possible given the data made available to the Agency. In response to the remarks from commenter 1076, again, the EPA conducted as thorough an analysis of the environmental jus tice implications of this rule as was possible given the data made available to the Agency. The commenter stated, but provided no documentation, th at it is possible that many diesel engines exist in low-income communiti es, and the commenter provided no information to support a claim that such communities are disproportionately affected by emissions from such engines. Furthermore, there is no evidence showing that peopl e living in sparsely-populat ed remote areas would be at a disadvantage as a result of this rule.



### 3.5 Executive Order 13211

Energy Impact Analysis
3.5.1 Comment : One commenter (1011) stated that the EP A must provide a suff icient energy impact analysis to verify and confirm that the nation’s electrical grid is in fact in jeopardy and that emergency engines are absolutely necessary to ensure reliability and stability. Such an analysis, according to the commenter (1011), must be coordina ted with FERC and the different ISO and RTO. In the commenter’s (1011), the EPA cannot arrive at the conclusion in good conscience that the energy needs outweigh the environmental and health impact without such an assessment. Another commenter (1102) said that the EPA has not complied with Executive Order 13211 concerning regulations that signi ficantly affect energy supply, dist ribution or use. The commenter (1102) disagrees with the EPA’s vi ew that not allowing uncontrolled st ationary emergency engines to operate for longer periods of time in emergency DR programs jeopard izes electrical reliability. The
commenter stated that there is no documentation in the rulemaking doc ket of any actual situation when stationary emergency engines have been the most critic al aspect in stabilizing or saving the electric grid in a time of emergency. Instead, th e commenter (1102) said that the da ta show that when large amounts

54 Letter from Craig Glazer, PJM to Melanie King, EPA. Supplement Comments. Febr uary 14, 2011. EPA-HQ-OAR-2008- 0708-0813.173 of emergency generation is started the additional generation results in the backing down of a near equal value of the traditional (cleaner) generation. Commenter (1102) expressed that uncontrolled emer gency engines subject to the proposal would participate in an emergency DR program only when there is financial incentive to do so. The commenter (1102) further stated that, by facilitating the use of uncontrolled stationary sources in emergency DR programs, the EPA is creating a market for the serv ices of these uncontrolled engines. The commenter suggested that, if the EPA is concerned about the reliability of the electric grid, it must provide in consultation with the FERC, RTO and ISO, a suffic ient energy impact analysis to verify and confirm that the nation’s electrical grid is in jeopardy and the use of these uncontrolled engines is absolutely necessary to protect the reliabili ty and stability of the grid.

Response : The EPA has not claimed that stationary emergency engines ar e the only resource, or most critical component in stabilizing or saving the electr ic grid in a time of emergency. Stationary backup generators are part of a mixture of resources serving the electrical gr id, and the EPA understands that the electric grid receives DR and stability with and without stationa ry engines. These units are an important and useful resource to RTO and ISO as they are sma ll, quick-starting and reliable and can be used to assist in ensuring reliability of the electric grid. Additionally, the EPA believes th at limiting the ability of owners and operators of stationary emergency engines to use during periods in which th e regional transmission authority or equivalent balancing authority has declared an EEA Level 2 as defined in the North Ameri can Electric Reliability Standard EOP-002-3, Capacity and Energy Emergency a nd during periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency ensures that these engines are only used when necessary for stabilizi ng the electric grid in a time of emergency.174 

### 4.0 Existing Non

‐ Emergency Stationary SI RICE >500 HP Located at Area
Sources

4.1 Sparsely Populated/Remote Areas (Class 1)

4.1.1 Comment : Several commenters (882, 1002, 1047, 1056, 1004, 1069, 1070, 1071, 1084, 1089, 1095, 1096, 1098, 1105, 1119, 1128, 1133, 1145, and 1457) are supportive of the proposal to require maintenance-based management prac tices for existing non-emergency 4-st roke SI engines greater than
500 HP that are located at area sources that are re mote. One commenter (1105) also noted that it is supportive of retaining the requirements as proposed, otherwise significant compliance issues will need to be addressed. The commenter (1105) said that companies are waiting to comply with the RICE NESHAP for their area source engine s, pending the final rule. If the remote engine and alternative monitoring provisions are not finalized in a way that is substantially similar to the proposed provisions, companies will require additional time to install equipment, according to the commenter (1105).

Response : The EPA is finalizing main tenance practices for existing non-emergency 4SRB and 4SLB engines greater than 500 HP at area s ources that are remote, as proposed.

4.1.2 Comment : One commenter (1105) and commenters repr esenting the State of Alaska or with interests in Alaska (922, 924, 947, 974, 990, 1006, 1020, 1031, 1062, 1063, 1130, 1135, 1136, 1139, 1141, 1145, 1444) asked that the EPA make changes in order to simplify the ongoing annual remote status assessment to allow remote engines located on a pipeline segment to be able to use the 1⁄4-mile radius approach in the §63.6675 defini tion item (3) when annually re-evaluating status and use the Department of Transportation (DOT)-based method (item 2) to determine initial remote status. Commenter 1105 suggested the following revised langua ge for §63.6603(e) in order to allow flexibility for the annual evaluation and to impr ove the language in this section: (e) An existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more
than 500 HP located at area sources of HAP must m eet the definition of remote stationary RICE in §63.6675 on the initial compliance date for the engine, October 19, 2013, in order to be considered a remote stationary RICE under this subpart. (1) Owners and operators of exis ting non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP lo cated at area sources of HAP that do not meet the definition of remote175 stationary RICE in §63.6675 of this subpart as of October 19, 2013 must evaluate the status of their stationary RICE every 12 months are not remote engines and must comply with the management practice equipment standard in Table 2d of this subpart. (2) Owners and operators must keep records of the initial and annual evaluation of the status of the engine of existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of
more than 500 HP located at a rea sources of HAP that meet the definition of remote stationary RICE in §63.6675 of this subpart as of October 19, 2013 must: (i) Comply with the management practice ma intenance procedures in Table 2d of this subpart; (ii) Evaluate the status of thei r stationary RICE every 12 months. (A) Keep records of the initial and annual e valuation of the status of the engine. (B) For remote engines located on pipeline segm ents, the annual evaluation can be completed using the criteria in either (2) or (3) of the remote stationary RICE definition. (C) If the evaluation indicates that the stationary RICE no longer meets the definition of remote stationary RICE in §63.6675 of this subpart, the ow ner or operator must comply with all of the requirements for existing non-emergenc y SI 4SLB and 4SRB stationary RI CE with a site rating of more
than 500 HP located at area sources of HAP that are not remote stationa ry RICE within one year of the
evaluation.

Response : The EPA does not think the changes the commenters have suggested for revising the language of the proposed section §63.6603(e) are necessa ry or appropriate and the EPA does not agree with the commenter’s request to be able to use th e criteria in (3) of the remote stationary RICE
definition. The proposed language in §63.6603(e) is straightfo rward and clearly indi cates the requirements that apply for existing non-emerge ncy SI 4SLB and 4SRB engines above 500 HP located at area sources
that are remote. The EPA has therefor e retained this language in the fina l rule, but notes that this section is now §63.6603(f) in the final RICE NESHAP. In addition, Table 2d of the final RICE NESHAP also clearly indicates the requirements th at apply to these engines that ar e remote, i.e., in items 8 and 11.
Table 2d of the final rule also clear ly indicates the requirements that apply to existing non-emergency SI 4SLB and 4SRB engines above 500 HP at area sources that are not remote in items 9 and 12, respectively, if the engines operate for more than 24 hours per calendar year, or in item 5 if existing non-176 emergency SI 4SLB and 4SRB engine s above 500 HP at area sources are operated for 24 hours or less per calendar year. The EPA proposed that sources that are remote evaluate their status ev ery 12 months using the applicable criteria for being classified a remote stationary RICE in §63.6675 based on whether the engine is located on a pipeline segment or not. Owner s and operators of engine s in sparsely populated
areas would have to conduct a review of the su rrounding area annually to determine if the nearby population has changed. If the engine no longer meet s the criteria for a sparsely populated area, the owner and operator would have to comply within 1 year with the emission standards specified for engines located in populated areas. The criteria fo r defining a remote stationary RICE depends on whether the engine is located on a pipeline or not. If the engine is located on a pipeline, the remote definition is according to the DOT pi peline classification system. If the engine is not on a pipeline, the
rule restricts the definition to within 1⁄4 mile radius around the engine. The EPA justified the development of the pipeline and non-pipeline criteria in the preamble to the proposed rule. One of the reasons for using the DOT classification is becaus e it is an existing, well-established system that according to industry would cover many engines subject to the RICE NESHAP. The EPA is for the most part finalizing the definition of remote stationary RICE as proposed, at least as it pertains to the engines discussed in this comment and response. The EPA sees no reason to alter the proposed provisions for remote stationary RICE that would affect exis ting non-emergency 4SLB a nd 4SRB engines at area sources. Accordingly, owners and operators of en gines on pipelines must use criteria (2) and nonpipeline engines must use criteria (3) of the remote stationary RICE definition in §63.6675 of the final rule. The alternative option for non-pipeline engines to use the 1⁄4 mile radius criteria was developed specifically for those engines not on pipelines where the existing DOT classification system could not be used. The EPA does not see any reason why pipelin e engines should use different criteria for their
annual assessment of remote status versus what they use for the in itial evaluation, as the commenter requests. Owners and operators of pipeline engines must use the DOT approach specified in (2) of the definition of remote stationary RICE in §63.6675 a nd cannot deviate from the criteria followed during the initial designation assessment. Subsequent reviews must be conduc ted the same way for consistency. Therefore, the EPA is not including the change s the commenter requested in the final rule.

4.1.3 Comment : Some commenters (1011, 1026, 1076, 1090, 1102, 1132, 1144, and 1193) are strongly opposed to the changes the EPA has proposed for existi ng 4-stroke engines greater than 500 HP at area sources that are in sparsely populated areas.177 One commenter (982) noted that large SI engine s in sparsely populated areas represent the major portion of the engines use in the production of natura l gas, complementing the diesel engines used in drilling rig operations, electric generators, hydraulic fracturing pumps and recovery pumps. Commenters 982 and 1011 said that they do not agree with the proposed exemption for existing 4SRB engines above 500 HP in remote areas. The technology that would apply to these engines (NSCR) is a readily available, proven, and cost-effective way to re duce HAP emissions, the commenters (982 and 1011)
said. There are tens of thousands of these catalyst installations on st ationary 4SRB engines where most are in remote, unpopulated areas, according to the commenters (982 and 1011), who therefore dismissed arguments they believe are weak that claim that engi nes many be difficult to access, lack electricity or may be unmanned. The technology is passive, durable and has been successfully operating in remote locations for decades, without being manned, both co mmenters (982 and 1011) asse rted. Air/fuel ratio controllers may need periodic calibration and the cat alyst requires occasional cleaning, this is being done on thousands of existing NSCR installs toda y in remote locations, commenter 982 said. Commenter 982 also added that these engines have b een permitted by states with NSCR and air/fuel ratio controllers for years. Acco rding to the commenter (982), its members have installed tens of thousands of NSCR catalyst on 4SRB engines in re mote unpopulated areas, and the commenter (982) added that often times these engine s are clustered in close proximity to facilitate inspection and maintenance of several engines during a single site visit. The engines are in remote areas; however, the pollutants such as NO x , VOC and HAP are transported from region to region and ultimately ca use higher ozone levels far from their origin, the commenters (982 and 1011) said. The Agency should not go back on measures originally adopted and justified under the 2010 rule, commenter 1011 said. One commenter (1090) argued against the proposed waiver of pollution control requirements for
SI RICE located in remote areas because of the t oxic and criteria pollutant imp acts in remote areas. The commenter (1090) said that the EPA’s new standard s for RICE NESHAP under the definition of remote stationary RICE will replace proven and effective control technology requireme nts with management practice standards that involve replacing oil and oil filters, checking and replacing spark plugs, and checking and replacing hoses and belts. The commente r (1090) said that aside from viewing easily falsified logged maintenance schedules, the EPA has no way of verifying complian ce with this standard. One commenter (1090) said that th e EPA’s finding that this change to remote area provisions is acceptable ignores the impact of the definition of remote areas not a ssociated with pipelines. Despite remote stationary RICE that are not on gas pipeli nes (engines located in ar eas with five or fewer178 buildings meant for human occupancy in a 1⁄4 mile ra dius) still being subject to the far less strict management practice standard, the co mmenter (1090) said that there is not a similar, parallel accounting procedure in place for these engines as there is for class 1 pipeline areas. The commenter (1090) said that the EPA’s justification for re duced technology standards for engine s in class 1 pipeline areas relies on DOT pre-existing knowledge and oversight of these areas, but the EPA’s “less burdensome” justification for waiving pollution controls and in stead issuing management practice standards for remote stationary RICE not on gas pipelines is not reasonable since there is no comparable system of accounting or oversight in place. The commenter (1090) said that impacted residents in class 1 pipeline areas would likely enjoy better air quality because ev en the minimal management practice standards are more likely to be adhered to because of the pre-ex isting oversight for the DOT ’s pipeline classification system. In contrast, the commenter (1090) said, impacted residents not in class 1 pipeline areas are likely to suffer greater harms because lack of oversight is likely to resu lt in lack of compliance with the management practices. The commenter (1090) added that the EPA’s decision to create a cl ass of remote stationary RICE
should be abandoned because it definition is based on non-relevant factors. By using pipeline 1 area classifications, the commenter (1090) said that the EP A is claiming its factual or scientific analysis overlaps perfectly with a regulatory mechanism bear ing no relationship to air quality and air quality’s impact on human health. The commenter (1090) said that a pipeline classification system meant to guard against immediate, catastrophic, and dire events like pi peline explosions is irre levant to a system of emission standards and pollution control technology requirements. In contrast, the commenter (1090) said that the RICE NESHAP is pa rt of a statutory scheme meant to protect the public against health impacts from air pollution. The commenter (1090) concl uded that the types of systems needed to guard against these competing harms are incomme nsurate and do not inform one another. One commenter (1090) said that this provision creates unbalanced incentives. The commenter (1090) said that the intent of this rule seems to be based on concerns for i ndustry cost-savings during incidental placement of engines in remote areas. Howe ver, the commenter (1090) said, this intent is not served by this rule because remote area designati ons will likely be factors in future placement of engines. The commenter (1090) said that as industry factors in reduced costs from not needing oxidation catalysts or NSCR technologies into the calculus of where and when it places engines, people living in these remote areas are much more likely to be expos ed to more pollution. The commenter (1090) stated that this rule change may cause fewer people to be impacted because engines will be placed in remote179 areas, but the impacted people will be exposed to much more air pollution because of the elimination of basic controls and the higher number of engines near them. One commenter (1102) said that the impact of formaldehyde emissions, which may remain in the atmosphere for up to a day after being emitted an d contribute to the forma tion of photochemical smog
well downwind of the action emission s point, is being overlooked in th e proposal to provide exemption from controls in remote areas. The commenter (1102) a dded that modern, effectiv e controls are available that are suitable for unmanned operation, can be effec tively operated and monitored remotely and can be integrated into RICE operations that do not have access to offsite power. According to the commenter (1102), the EPA should consider possibl e limited exemptions for site-specific reasons (such as inability to provide or acquire adequate el ectric resources or remote site co mmunication) rather than provide a broad exemption for RICE in remote areas. The co mmenter (1102) described examples of NSCR control technology and said that it is a passi ve, durable technology that has been used in successful operation in many remote, unmanned facilities for years. This c onclusion is consistent with the EPA’s own impact analysis of the 2010 SI RICE NESHAP accordi ng to the commenter (1102). The commenter (1102) concluded that the public in less populated areas are no less entitled to the benef its of pollution controls and healthy air than the public located in more densely populated areas. Some commenters (1076, 1132 and 1144) requested that the EPA abandon a rule that creates separate classes of protection for residents ba sed on population density or location units. One commenter (1132) said that residents in rural areas require and deserve the same level of protection as other people. The commenter (1132) believes that ru ral residents will be ne gatively impacted by the proposal and commenter 1076 added that a significan t portion of the United St ates population may be living in areas where the engines in those areas will not be required to use afte rtreatment. This will cause increased exposure and health risks from engine emissions for this specific group of people, the commenter (1076) said. Commenters 1132 and 1144 objected the class distinction established by the EPA in the proposed rule, which follows the DOT classificati on system. In the commenter’s (1132) opinion, the DOT system regulates a categorical ly different aspect of natural gas operations and is therefore illequipped to address concentrations of stationary engines. Commenter 1144 said that the DOT system has nothing to do with air pollution. The commenter ( 1132) argued that the DOT regulations affect the safe transport of natural gas through gathering a nd distribution lines, and have no bearing on engines that are covered by the proposed changes. It is the commenter’s (1132) belief that the Agency is considering adopting a standard that is convenient for industry, as opposed to serving the interest and180 safety of the public. The DOT system that includes th e class location standard is in place to safeguard against pipeline failures and not transient air polluta nts, the commenter (1132) said. The potential impact radius, which is the “radius of a circle within which the potential failure of a pipeline could have significant impact on people of property,” the comme nter (1132), and the radius was not developed to address transient air pollutants that travel miles in the lower atmosphere. The commenter (1132) further discussed the inappropriateness of using the DOT cr iteria in the rule and argued that the EPA has
established criteria that are entir ely arbitrary. Commenter 1076 agreed that it is wrong of the EPA to base an air pollution regulation on criteria establis hed by the DOT regulation that deals with pipeline safety. The criteria under the DOT cl assification system are not releva nt, the commenter (1076) said. Commenter 1144 argued that emission s from stationary engines are not confined to the pipeline
corridor and that some of the HAP emitted from e ngines above 500 HP that burn natural gas from the pipeline are dense gases including radon that will settle into low lying areas near the compressor stations powered by the engines in question. So although there may not be any people liv ing within the Class 1 area they might live in a low lying area near the compressor station where the emitted radon will collect, the commenter (1144) said. The commenter (1144) said th at radon is radioactive, and is according to the EPA the leading cause of lung cancer among non-sm okers, accounting for 21,000 deaths yearly, the commenter (1144) added. One commenter (1076) urged the EPA to remove the re mote stationary engine definition from the rule provisions. Commenter 1144 cited to section 112( h)(4) of the CAA that states that: “(4) NUMERICAL STANDARD REQUIRED – Any standard promulgated under paragraph (1) shall be promulgated in terms of an emission standard whenever it is fe asible to promulgate and enforce
a standard in such terms.” One commenter (1144) noted that th e EPA established a numerical st andard for non-remote 4-stroke engines above 500 HP at area sources based on oxid ation catalyst and NSCR. The engines used at compressor stations in remote and non-remote area s are exactly the same a nd therefore a numerical standard is feasible for remote engines also, and th e commenter (1144) said that if a numerical standard can be promulgated for a type of engine, secti on 112 of the CAA does not allow a work practice or management practice standard to be applied to this same e ngine if it is located somewhere else. For that reason, the commenter (1144) said that the proposed rule conflicts with the CAA and cannot be
finalized. One commenter (1132) also expressed how the proposed rule would lead to an increase in pollution in areas with less than 10 houses in a 220-yard radius and said that this would further increase181 the air pollution in rural areas of southwestern Pennsylvania, which is an area that already suffers from poor air quality. The commenter (1132) stated that low population density does not correlate to outstanding air quality and mentioned areas with lo w population density having non-attainment issues. The commenter (1132) also noted that some specific ar eas have increased rates of diseases associated with air pollution. The commenter (1132) added that residents of southwestern Pennsylvania already experience significant health problems and that the proposed rule will only exacerbate these problems. The commenter (1132) concluded with stating that the EPA should fina lize a regulation that offers the same level of protection for everyone, regardless of where the engine is located. The commenter (1132) is opposed to using population density as the sole factor for determining ai r pollution regulation and urged the Agency at a minimum to keep the existing regulation as is. Commenter 1076 also said that it is wrong for the EPA to effectively create a group of s econd-class citizens in rura l areas, who seemingly are not deserving of the same level of protec tion as citizens in populated areas. Commenter 1076 additionally said the rule will underm ine state and tribal air permitting programs because it will weaken the best available control technology (BACT) and best available technol ogy (BAT) standards. Lastly, in the commenter’s (1076) opinion, the EP A ignores the effects of the tran sportation of pollutants that may impact the NAAQS in different areas. One commenter (1090) said that if the EPA fina lizes the remote areas portion of this rule, many state-run air permitting programs may be severely weakened. According to the commenter (1090), finalizing a rule that does not require oxidation catalysts or NSCR on may signal to states that BAT/BACT should be contemplated differently in these remote areas despite well-worn regulatory precedent. The commenter (1090) said that because BA T/BACT is an ever-tight ening standard resulting from increasing market penetration of pollution control technology, this rule could negatively impact that standard, delaying or rolling back reasonable advances in air quality. Commenter 1090 said that the 17 states with laws that prevent environmental sta ndards from being no more st ringent than the Federal standards, have to rely on the EPA rules to protec t public health and the environment. The commenter (1090) said that it is imperative that the Agency pu t in place, and keep in place, rigorous air pollution standards for stationary RICE that equallyprotect public health in all states.

Response : The EPA does not necessarily disagree w ith many of the commenters’ (982 and 1011) remarks regarding NSCR. The Agency has in the past made similar conclusions regarding the technology’s demonstrated capabilities and cost. Howeve r, the EPA proposed management practices for large existing non-emergency 4SRB engi nes at area sources remote from human activity to address valid182 concerns from industry about accessibil ity, infrastructure, and staffing th at relate to the remoteness of these engines. Also, compliance costs with the or iginal 2010 requirements were a concern because the requirements would have likely re quired NSCR. The EPA discusse d the reasons for its proposed changes in the preamble to the proposed rule (77 FR 33820). One of the things that those opposed to the 2010 rule argued in terms of the requirements for engines in remote areas was that the Agency did not consider population density and the difference in health impacts in remote areas versus more populated areas, and reasoned that th e EPA has flexibility to require less stringent standards fo r engines in remote areas. As discussed in the preamble to the proposed rule, the EPA does not agree with everythi ng petitioners argued, but the Agency does believe that there is reason to distinguis h between remote and non-remote areas for this group of engines. While NSCR and oxidation catalysts are feas ible and available for rich burn an d lean burn engines, the costs of the emission controls, including installation, ope ration and maintenance, testing, and monitoring requirements may be unreasonable when compared to the HAP emission reduc tions that would be achieved, particularly at these remote sites where other costs and limita tions come into play. While it is not impossible to install add-on controls on engines at remote locations, there are significant downsides
to such installation and continued maintenance and upkeep of the engine, control equipment and other associated monitoring and test appara tus. Because of the remoteness of these sites and because it is not practical to visit these engines (whi ch are located at sites that are often unmanned), costs to travel to these locations can be higher than other more centrally located engine facilities . In addition, according to industry, remote sites often only have one engine a nd sites are spread out a nd located far away from town. Getting equipment to these remote sites, e.g., te sting and monitoring equipment is a big issue, and according to engine operators of engines at remote s ites, access to their engines can be difficult due to
extreme weather conditions in certain areas. In some cas es, engines can also be hard to get to because of Bureau of Land Management land restrictions. Further, some commenters claimed that the Agency over-estimated the NO x reductions for the 2010 rule (75 FR 51570). There are no NO x reductions associated with adding oxidation catalyst controls to 4SLB engines and the NO x impacts estimated from the 2010 rule were only related to the requirements for rich burn engine s above 500 HP at area sources. Ho wever, the commenters claim that
because the NESHAP is intended to maxi mize reductions of HAP like formaldehyde, NO x reductions from rich burn engines are not necessarily guaranteed at the 97 percent contro l level, claiming that
calibration to maximize HAP re ductions are different than calibrations to maximize NO x reductions and there is a very specific operating window to control all parameters to optimize NO x reductions from an183 NSCR. States that are concerned w ith criteria pollutants from large engines at area sources that are remotely located can require further emission contro ls from these engines to achieve the reductions needed for these pollutants. State control of criteri a pollutants through SIP meas ures, particularly in nonattainment areas, is the method most di rectly applicable in the CAA, par ticularly as it relates to existing sources, to dealing with areas that are in non-attainment for criteria pollutants. In the context of a national rule directed at regulati ng HAP emissions from existing SI e ngines at area sources in remote locations, the EPA believes it is no t appropriate to require aftertr eatment-forcing numerical emission
standards. The EPA is finalizing manageme nt practices for existing non-e mergency 4SRB engines above 500 HP at area sources that are in sparsely populated areas. Regularly scheduled intervals for checking, inspecting, and replacing the oil and oil filter, spark pl ugs, hoses and belts will ensure that the engine is operated and maintained properly. The engine owner a nd operator will know the status of the engine’s components and can make sure they remain in prop er condition and continue to perform the necessary functions to support proper engine operation, reduce HAP, and minimize emissi ons. These are the type of management practices that are gene rally in use to protect the engine. In response to criticism about using the pipeline cl assification system to define remote engines, as discussed in the preamble to the proposed rule and in RTC 4.1.2, the DOT system is a wellestablished, already implemented system that is curren tly in use in the field. According to industry, the DOT system would overlap well with existing large SI engines affected by the rule. While the DOT system was not created for the same purpose as the EPA’s current regulation, it s intent in delineating engines that are close to populations from engines that are remote is similar to the EPA’s intent and its provisions are transferable to this rule for the purpose of delineating remoteness. Given the advantages of an existing system and in the absence of a better way to define remote engines, the EPA retains the decision that following the DOT system is the best approach for this rule. Regarding the lack of DOT oversight that w ould be associated with those engines not on pipelines, which are instead subject to the 1⁄4 mile ra dius criteria for determini ng remote status, the EPA notes that owners and operators of these engines are subject to recordkeeping requirements. As specified in the final rule at §63.6603(f), owners and operators must evaluate the remote engine status every 12
month and records of the initial a nd ongoing annual remote status evalua tions must be kept. In addition, owners and operators of these e ngines (as well as engines on pipelines) must keep records of the maintenance conducted on the engines, as re quired by §63.6655(e)(3). Records of maintenance conducted have to be readily accessible for expedi tious review by the enforcement authority, as184 specified in §63.6660(a) of the final rule and accordi ng to §63.10(b)(1) of the General Provisions to 40 CFR part 63. Failure to meet these requirements would be a deviation.
The EPA also believes that there is little chan ce of this rule causing significant future movement of engines to remote locations. This subcategor y affects only existing engines and once this rule becomes effective, there will be little incentive for a s ource that has already put on controls to be moved to an area where no controls are required. In response to comments about how pollutants are transported, the commenters did not provide specific data showing that the HAP of interest trav el very far, given the low emission point of these sources. On the other hand, the EP A received modeling information fr om other commenters to assess pollutant concentrations, which wa s conducted using the EPA’s ISC3 and two model natural gas-fired 4SLB and 4SRB engines above 500 HP. 55 The results of the dispersion m odeling indicated that there is rapid decrease in the concentra tion within short distances where the maximum concentration for all stack heights from the 4SLB engine occurred at less than 50 meters and from the modeled 4SRB engine
at less than 130 meters. Both distances are well be low the distance criterion of 1⁄4 mile for non-pipeline engines. The EPA notes that this modeling informa tion was provided only for 4- stroke SI engines and would need to be further reviewed, but it is relevant in responding to the comment. While other pollutants su ch as CO, VOC, and NO x may be reduced by this rule, the focus on the Agency’s review is on HAP. In terms of concer ns associated with radon being emitted, which commenter 1144 mentions, the EPA does not have a ny tests showing radon e missions from engines. Radon is radioactive, hazardous, and a carcinogen existing all across the United States, but the commenter did not refer to any te sts and since the EPA does not ha ve any data showing radon being emitted from engines and does not have any informa tion from catalyst vendors that would indicate that radon is reduced through catalytic converters, whic h converts hydrocarbons to CO, water vapor and carbon dioxide (CO 2 ), the EPA would not expect radon to be reduced by the controls required by the regulation. Radon is typically mi tigated via other measures. While people in rural areas are entitled to protection from air pollu tion, the remoteness of engines from sizable human populations and infrastruc ture is a reasonable criterion to review in determining subcategories. It is wo rth noting that the EPA’s legal impetus for this rule is a provision of the CAA dealing with urban air toxics.

55 Memorandum from Jim McCarthy and Jeff Panek, IES to Lisa Beal, INGAA. Concentration versus distance profiles from reciprocating internal combustion engines – Dispersion modeling results for two example engines from previous INGAA modeling. July 27, 2011EPA-HQ-OAR-2008-0708-0849.185 Regarding the comment that the CAA does not a llow work practice standards for these engines, the engines being regulated are at area sources, a nd the provisions for area sources, at CAA section 112(d)(5) allow for requirements which provide for GACT, includi ng management practices. The provisions for remote engines are management prac tices designed to ensure proper maintenance and operation of the engines, which will protect against emissions caused by poor maintenance or operation. In response to concerns regarding BAT/BACT, this provision should not necessarily undermine BAT or BACT in general since those programs most often include direct examination of criteria pollutant emissions and this regul ation is directed towards HAP. Th e choices are not necessarily the
same under BAT/BACT and the decision-makers for su ch determinations will ma ke their own choices. Further, the EPA believes that it is appropriate to examine issues of co st effectiveness and the particular effects regulations have on sources, and that the anal ysis provided in this rule should not be seen as inappropriate simply because it results in regulatory relief. Regarding the States that have laws that prevent standards from being more stringent than the EP A standards, this is a choice made by the elected representatives of those states. The EPA cannot make national rulemaking decisions based on the choice of certain states to make the policy choice not to pr omulgate more stringent st andards than the EPA. In addition, to the extent such states have issues concerning non-attainme nt of NAAQS, they are required to meet the provisions of section 110 of the CAA despite any such laws.

4.1.4 Comment : One commenter (1136) added that if the re mote versus non-remote subcategories are not retained in the final rule, the equipment standa rd and alternative monitoring provisions should still retained for any area source that requires a catalyst.

Response : No response is needed.



### 4.2 Populated Areas (Class 2

‐ 4)

4.2.1 Comment : Some commenters (1004, 1070, 1089, and 1323) are supportive of the proposed changes for existing 4-stroke SI e ngines above 500 HP that are at area sources in populated areas. One commenter (1004) believes that requiring an equi pment standard and reducing the testing and monitoring burden will yield emissi on reductions while lowering the administrative and financial burden on affected sources. Specifically, some commenters, including commenters 1070 and 1323 said that they support shorter duration portable analyzer CO tests and high temperature shutdown in lieu of having to continuously monitor parameters in order to demons trate compliance. Commenter 1070 also believes the proposal for these engines adds flexibility, while reducing testing and monitoring costs. Commenter186 1089 also supports simplified compliance, specifi cally the less rigorous testing and monitoring requirements in the form of allowing portable analy zers to measure CO and relying on high temperature shutdown devices as opposed to continuous monitoring. Although supportive of the proposal to allow high temperature shutdown devices as opposed to continuous parametric monitoring system (CPMS), one commenter (1323) noted that because of the timing of when this proposed requirement came out, it has already gone through a contractor bid to retrofit its engines with controls and CPMS in order to meet the October 2013 compliance deadline. Therefore, because of the late proposal of this alte rnative requirement, the commenter (1323) said that additional compliance time is needed in order to reverse planned monitoring methods based on the final
rule.

Response : No response is needed. Regarding the need for more time, the comment er may be able to receive more time through a request for extension w ith its appropriate permitting authority, although given that this revision was intended to reduce bu rden, the commenter may be able to meet the requirements within the time provided in the regulations.

4.2.2 Comment : One commenter (1038) said that the final RICE rule established emission limits for non-emergency 4-stroke engines based on the MACT floor, but now the EPA proposed that these same units be required to install controls without regard to whether they can meet the limits without controls. The commenter (1038) added that th e EPA has not provided a rationale for this change or for the additional requirement to test these required cont rols annually and to auto matically shut down the engines if certain temperatures ar e exceeded. The commenter (1038) said that if the proposal is adopted, these engines already meeting the emission limits would have to unde rgo the cost of installing and testing controls, resulting in no environmental benefit.

Response : For certain other categories of engines subject to the RICE NESHAP, emission limits can be met either with a concentration option or a percent reduction requirement, without a specific requirement for added emission contro ls. However, the requirement that was proposed and that is being finalized for existing non-emerge ncy 4-stroke engines above 500 HP at area sources that are in populated areas is not the same as those standards. The requirement being finalized in this action for these engines is an equipment standard, which is wh at was determined to be suitable for existing large187 non-emergency 4SLB and 4SRB engine s at area sources of HAP emi ssions remote from human activity. The concentration levels specified in items 13 and 14 of Table 5 of the final RICE NESHAP are not
numerical emission limitati ons, but are compliance dem onstration levels to verify that the catalyst is functioning correctly. When the EPA promulgated the 47 ppm by volum e, dry basis (ppmvd) standard in 2010, it did not have any evidence of, nor did it believe there to be, any engines that could achieve an engine-out level of 47 ppmvd without the use of aftertreatment. The commenter did not provide data or information showing that this is possible. The EPA contacted th e commenter for additional information to clarify the
claim made. Commenter 1038 indicated that at the time the comment was subm itted, the commenter had information suggesting that there was a unit (or units ) that could meet the li mits without controls. However, since that time, the commenter (1038) determin ed that it was not certain this was the case and is in the process of installing controls on the engine s. The CO level of 47 ppmvd is based on test results available from four 586 HP Caterpillar 3412LE engine s at Thunder Creek Compressor Station. All four engines were equipped with oxidation catalyst. The CO was reduced by more than 80 percent for each engine. The EPA has numerous test reports for stationary 4SLB engine s without add-on controls and the engine-out CO levels are much higher than 47 ppm vd, clearly demonstrating that aftertreatment is needed to meet an engine-out level of 47 ppmvd. Th erefore, the EPA remains convinced that the CO level of 47 ppmvd for 4SLB engines is only attain able with aftertreatment, and has no information indicating otherwise. Therefore, th e EPA disagrees with the commenter’s statement that this revision of the regulations for these engines cr eates any new requirement that woul d not have been necessary under the preexisting regulations. The EPA disagrees with the commenter that it ha s not provided a rationale for the requirement to test the required controls annually and to automatically shut down the engines if certain temperatures are
exceeded. The EPA discussed the rationale for both requirements in the preambl e to the proposed rule. The annual catalyst check is required to ensure cata lyst activity and the temperature requirement is intended to protect the catalyst. By monitoring the catalyst input temper ature, the owner and operator is alerted in cases where the engine temperature be comes too high and could negatively affect catalyst performance. A high temperature shutdown device au tomatically tracks the engine temperature and based on the temperature set point will turn off the e ngine if that critical temperature is reached. The high temperature shutdown device was added as an a lternative option to monitoring the catalyst inlet temperature continuously. The EPA believes the require ments are appropriate as proposed and the EPA188 does not see a compelling season to finalize requirements that are di fferent than what was proposed
based on the comments received.



### 4.3 Definition of Remote

4.3.1 Comment : Several commenters (1063, 1092, 1098, 1105, 1106, and 1133) recommended that the EPA clarify what constitutes a remote engine or revise the proposed definition. Commenters 1098 and 1133 said that the concept of the DOT classificati on system is not familiar to contract compression providers or other operators not directly involved in pipeline tr ansportation. One commenter (1133) asked that the EPA clarify what is meant by a pipeline segment. The commenter (1133) also requested that engines provided by operators who do not operate or control the pipeline (i.e., contract compression companies) be allowed to use the 0.25 mile radius around the engine in place of the 1-mile pipeline segment criteria. Two commenters (1136 and 1145) sa id that the EPA should revise §63.6603(e) that allows remote engines located on a pipeline segment to be able to use the 1⁄4-mile radius approach in the §63.6675 definition item (3) when annually re-evaluati ng status and use the DOT-based method (item 2)
to determine initial remote status. The commenter (1136) said that this revi sion would still address the EPA’s intention to prohibit operators with engines on pipelines to sel ect the most favorable option in item (2) or (3) of the definition when determining whether an engine is remote. The commenter (1136) provided suggested regulatory language. Many oper ators do not know their DOT classification and may
not be able to determine their DOT classification b ecause they do not have ownership or responsibility of the pipeline(s) in question, the commenters ( 1098 and 1133) said. For that reason, the commenter (1133) suggested as an alternative th at operators who do not operate or control the pipeline (i.e., contract compression companies) be allowed to use the 0.25 mile radius around the engine, which would be
much more attainable than the DOT pipeline-based approach. Commen ter 1098 similarly said that the EPA should allow sources to use the non-pipeline crite ria even if the engine is located on a pipeline because it would be easier to apply. The first change the commenter (1105) suggested was that in keeping with the definition of “ambient air” in the CAA, which does not includ e on-site areas that are access limited, the proposed definition should be modified to exclude buildings ow ned or leased by the owner/operator of the engine. The commenter (1105) believes that th e proposed definition could be read to include buildings that are part of the RICE MACT affected facility, but inclus ion of onsite buildings and structures in determining if an engine is remote would be inconsistent with the basic pre mise that the purpose of the RICE NESHAP is to protect ambient air. In the commen ter’s (1105) opinion, remote status should be based on189 off-site buildings and structures. Commenter 1106 agr eed with this assertion. The commenter (1105) did not think that it would be appropr iate to include onsite buildings such as for example office, lab, compressor house, auxiliary/emergency equipment hous e, garage, maintenance shop, storage shed, etc. in determining applicability of a remote engine in a sparsely populated area. The commenter (1105) requested that the Agency explain in the preamble to the proposed rule that the owner’s onsite buildings and structures are excluded in determining whet her an engine is remote. Commenter 1096 also recommended that buildings within the facility boundary be excluded from the remote definition and commenter 1063 similarly said that the EPA should revi se the definition of remote stationary RICE such that owner-operator buildings are not included when conducting the building count that determines rule applicability. Commenter (1136) added that becau se the CAA definition of “ambient air” does not include on-site areas that are access limited, the remo te engine definition should be revised to exclude these types of buildings. The commenter (1136) added that multiple rooms within a single owner/operator facility structure should not be co nsidered as separate dwelling units. The commenter (1136) provided suggested regulatory text. One comment er (1145) said that the definition of remote engine should be clarified to specifically addr ess owner-operator onsite buildings. Co mmenter 1105 recommended the following specific additions to 63.6675, items 2 and 3, represented in bold underlined

text: (2) Stationary RICE located on a pipeline segmen t that meets both of the criteria in paragraphs (2)(i) and (ii) of this definition. (i) A pipeline segment with 10 or fewer build ings intended for human occupancy within 220 yards (200 meters) on either side of the centerline of any continuous 1-mile (1.6 km) length of pipeline. Buildings or structures located within the fac ility property or fenceline are precluded from the building count for the purpo se of this definition. Each separate offsite dwelling unit in a multiple dwelling unit building is counted as a separate building inte nded for human occupancy. (ii) The pipeline segment does not lie within 100 yards (91 meters) of either a n offsite building or a small, well-defined outside area (such as a playground, recreation area, outdoor theater, or other place of public assembly) that is occupied by 20 or mo re persons on at least 5 days a week for 10 weeks in any 12-month period. The days and weeks need not be consecutive. The building or area is considered occupied for a full day if it is o ccupied for any portion of the day. (iii) For purposes of this paragraph (2), the term pipeline segment means all parts of those physical facilities through which ga s moves in transportation, including but not limited to pipe, valves, and other appurtenance attached to pipe, compressor units, metering stations, re gulator stations, delivery190 stations, holders, and fabricated assemblies. Stationary RICE located within 50 yards (46 m) of the pipeline segment providing power for equipment on a pipeline segment are part of the pipeline segment. Transportation of gas means the gathering, transmission, or distribution of gas by pipeline, or the storage of gas. Buildings or structures located within the fa cility property or fen celine are precluded from the building count for the pur pose of this definition. A building is intended for human occupancy if its primary use is for a purpose involving the presence of humans. (3) Stationary RICE that are not located on gas pipelines and that have 5 or fewer buildings intended for human occupancy within a 0.25 mile radius around the engine. Buildings or structures located within the facility property or fencel ine are precluded from the building count for the purpose of this definition. A building is intended for human occ upancy if its primary use is for a purpose involving the presence of humans.
Commenter 1106 made similar recommendati ons to the language in the rule.

Response : The EPA is finalizing the defini tion of a remote stationary RICE as proposed with the added criteria in (2)(i) and (3) of §63.6675 that buildings with four or more st ories are not included as remote engines. The term is defined in §63.6675 of the final ru le. The term pipeline segment is explained within the definition at (2)(iii) of §63.6675. The EPA believes th at the definition in the regulation is sufficient. The EPA does not believe that it is appropriate to allow owners and operators of any engines on pipelines to meet the alternative, 1⁄4 mile radius criteria provided in (3) of §63.6675, including owners or operators who do not operate or control the pipeline. Entities such as contract compression companies
that the commenters mention must use the remote stationary RICE criteria specified in (2) of §63.6675 for pipeline engines. The EPA specifically adopted the DOT pipeline classification system and followed the DOT approach in the stationary RICE NESHAP fo r consistency with the DOT and to take advantage of a well-established classification system with cons iderable overlap with engines affected by the RICE NESHAP. The alternative, 1⁄4 mile radius approach in (3) of §63.6675 is reserved for owners and operators of engines not on pipelines who cannot us e the DOT classification and was included in the rule for the sole purpose of having an available me thod for determining remote engine status for nonpipeline engines. The EPA disagrees with the commenters that on- site buildings should not be included in the definition of remote stationary RICE. The number of buildings and amount of human activity that may take place in any buildings or structures, on- or offs ite, is a reasonable indicator of remoteness, as the number of on-site buildings is reasonably related to infrastructure, access, availability of personnel, and191 effects of the pollution. The definition was intended to include onsite buildings and structures, and such structures are included in DOT’s ap proach. The EPA has therefore retain ed this inclusion in the final rule and is not adopting the la nguage recommended by commenters.

4.3.2 Comment : One commenter (1092) requested that EPA clarify the proposed definition of “remote stationary RICE” when finalizing the rule changes, as there appears to be some ambiguity in the proposed language which could have an impact on which RICE can be classified as remote. For example, according to the commenter (1092), the preamble and proposed rule language both clearly indicate that all existing DOT Cla ss 1 locations would meet the de finition of “remote” under RICE MACT by default. The commenter (1092) stated they are unclear how to evalua te existing engines at non-DOT regulated locations and asked if the EP A is proposing a requirement to conduct the DOT classification process for ev ery pipeline segment associated with t hose locations. If this is the case, commenter (1092) asserted this will be an extens ive effort for natural gas production and gathering stations with several pipeline segments entering a nd exiting the facility as production lines are exempt from DOT regulation and are rarely analyzed for class location ma king this definition of “remote” difficult to apply since the data is just not ava ilable like it would be for a DOT-regulated facility.

Response : Any engine that is located on a pipeline segment as that term is define d in paragraph (2)(iii) of the definition of “remote stationary RICE” in §63.6675 of the final rule must use the criteria in paragraph (2) of the definition of “r emote stationary RICE” to determine whether the engine is classified as remote under the rule, regardless of whether the pipeline segment is DOT-regulated or not. Regarding the comment that it would be difficult to appl y the criteria for non-DOT regulated pipeline, the commenter has the option of not cl assifying its engines as remote and meeting the requirements for engines that are not in remote areas.

4.3.3 Comment : Two commenters (929 and 1092) noted concern about possible inconsistencies resulting from inserting the DOT pipeline classification criteri a directly into the §63.6675 definition of a remote stationary RICE. Instead, the commenter (929) recommended that the EPA should incorporate by
reference the classification criteria of 49 CFR part 192 into the definition of remote stationary RICE. The commenter (929) stated that the definition of pipeline segment included in §63.6675 is inconsistent
with the DOT definition included in 49 CFR 192.1. The commenters (929 and 1092) added that the
definition criteria does not account for the provisions of 49 CFR 192.5(c) that allow an operator to192 “cluster” or reduce the amount of pipe that is e ffected by a higher class location. The commenter (1092) believes that as DOT rules have provisions for ev aluating clusters of buildings when classifying locations (see 49 CFR 192.5 and 192.8), it seems possible that existing sites could meet the definition of remote under DOT rules, but not under RICE MACT as proposed if the clus tering provisions are not
also clarified in the final RICE MACT rule. Co mmenter (1092) stated the preamble and recent EPA webinars suggest that the EPA inte nded to be “consistent” with DOT in the proposed RICE MACT rule and, thus, believes that any existing location that is DOT regulated would use the classification already
determined for DOT as the same basis/criteria fo r evaluating its remote status under RICE MACT. Similarly, commenter (1092) added, for sites that are not currently regulated by DOT, it would stand to
reason that the same criteria used under DOT for de termining the remote stat us (including clustering provisions) would be applied under RICE MACT. The commenter (1092) believes that it is the EPA’s intent for criti cal terms used in RICE MACT
to have the same definition/meani ng as the historical DOT interpreta tion of these terms (rather than proposing a unique/different definition for the purposes of the RICE MACT rule) and suggests that the EPA consider adding this specificity to the definiti on of “remote” in the final version of these proposed
revisions. The commenter (929) stated that, while the DOT classifications are made periodically in accordance with 49 CFR 192.609, there may be a discrepa ncy between the DOT classifications and the
determinations made in accordance with the requirements of the proposed rule. According to the commenter (929), this would add burden to operators to make such determinations given the different
criteria and does not meet the intent of the reducing operator burden as indicated in the preamble of the rule. The commenter (929) added that, by incorporating the classification criteria directly into the rule instead of by reference, there is potential for di screpancies due to regulatory changes to the DOT regulatory criteria. According to commenter 929, given the DOT requ irement to classify pi pelines and the EPA’s intent to use this alignment to reduce the burde n on operators, the commente r (929) recommended that the provisions of §63.6603(e) in the proposed rule be m odified to allow operators to use a determination
conducted in accordance with 49 CFR 192.609 that was conducted in the past 12 months to determine applicability and pipe line classifications. One commenter (929) asked the EPA to clarif y how an engine that provides power to the pipeline segment equipment is classified under secti on (2)(iii) of the definition of remote stationary RICE in §63.6675 of the proposed rule. The commenter (929) suggested that it is the EPA’s intent to193 determine the classification of the engine based on the perpendicular distance to the pipeline and classification of the pipelin e at such point and seeks verification of the same.

Response : It is unclear why the commenter believes the definitions are inconsistent as written. Therefore, the EPA contacted the commenter to clar ify why the commenter thought that the definition of pipeline segment included in §63.6675 is inconsistent with the DOT definition included in §192.1 of 49 CFR. In response to this question the commenter i ndicated that the nomenclat ure used in the proposed rule was not consistent with that of DOT regulati ons, for example, the commenter said that the DOT regulations define a pipeline and not a pipeline segment, which the proposed rule uses, and a class location unit and not a pipeline segment, which the proposed rule also uses. The commenter said that (2)(ii) of the definition at §63.6675 does not account for the criteria of a class location unit (an onshore area that extends 220 yards (200 meters) on either side of the centerline of any continuous 1- mile (1.6 km) length of pipeline). For thes e reasons, the commenter felt the language creates confusion and initially recommended the following language: “A remote stationary RICE is a RICE that is either 1) Pa rt of a pipeline (as defined in §192.3) that has a location unit classification of 1, as dete rmined by the criteria set forth in §192.5 or 2) A RICE that is located within 50 yards of a class 1 pipeline and that provide power to equipment that is part of that pipeline.” However, the EPA does not wish to directly incorporate the DOT regulations in the RICE NESHAP, given that such regulations can change ove r time, which is why the class location criteria was included directly in the proposed changes to the ru le. Directly referring to the DOT regulations would leave the Agency with no control over this portion of the definition of remote stationary RICE should the DOT make any revisions to 49 CFR part 192 lead ing to unintended consequences within the RICE NESHAP. Therefore, the EPA does no t think it is appropriate to in corporate the suggested language. Subsequently, the EPA asked the commenter for specifi c revised text that woul d fit within the language that was proposed, as opposed to merely referri ng to 49 CFR part 192, while still addressing the commenter’s concerns. In the end, the commenter dete rmined that any alternative language not referring
to the actual DOT classification would be too conf using and therefore offere d no alternative revised language.
The EPA thinks it is reasonable to allow owners and operators to use a determination conducted
in accordance with 49 CFR 192.609 that was conducted with in the past 12 months in order to determine applicability to satisfy the requirements in the proposed §63.6603(e), which is now §63.6603(f) in the194 final rule. This will minimize the compliance burden and take advantage of al ready existing available
information. In terms of classifying engines that are not located on the pipeli ne, but that are within 50 yards (46 meters) of the pipeline segment providing powe r for equipment on a pipeline segment, which are part of the pipeline segment as specified in the de finition of remote stationary RICE in (2)(iii) of §63.6675, to determine this, the owner or operator should draw a perpendicular line to the pipeline and
evaluate that distance. The EPA believes this answer the commenter’s question.
The EPA also contacted the commenter and aske d for clarification on th e commenter’s remarks regarding clustering and why not including th e provisions of 49 CFR 192.5(c) would cause a discrepancy. The commenter responded as follows: “The clustering provisions of the rule allow the opera tor to reclassify certain sections of pipeline by shortening the length of the segment subject to the higher classification criteria. This is a standard practice within industry and in accordance with DOT requirements. As such, if operators rely on previous DOT pipeline classification for NESHAP applicability determinations they run a risk that the classification criteria of the pipeli ne would differ from that require d by the NESHAP as written (without such clustering provisions). This would mean that a new DOT classification may have to be made for each engine based on the NESHAP criteria and differi ng from the existing DOT classification dataset, contrary to EPA’s intent to reduce operator burde n by utilizing existing classification criteria.” In response to this issue, where th ings are not clear in the RICE NE SHAP EPA intends that, as long as the DOT regulations are not inconsistent with th e EPA rule, interpretations should generally follow DOT practice. The EPA does not believ e the clustering provisions, if it is as indicated by commenters, is inconsistent with the language in the final rule regarding the definition of a pipeline segment.

4.3.4 Comment : One commenter (1095) said that it supports the definition of remote in §63.6675 of the proposed rule. Commenter 1457 supports using the DOT pi peline classification system and said that it is reasonable and well-established and will improve implementation and reduce compliance burden.

Response : No response is needed.



### 4.4 Management Practices

4.4.1 Comment : Two commenters (1098 and 1133) expressed general support of the management practices for existing 4-stroke engi nes greater than 500 HP at area sour ces that are remote, but had some195 concerns regarding the interval s for performing maintenance. Th e commenters (1098 and 1133) believe that the intervals should be longer for larger engine s because they have increased capabilities compared to smaller size engines. This capability allows engines to extend the maintenance interval, the commenters (1098 and 1133) said. In the commenter s’ (1098 and 1133) opinion, extended maintenance intervals are clearly less costly for the owner an d operator, but longer intervals also reduces the environmental impacts that is asso ciated with disposing waste oils and traveling to remote locations. Therefore, commenters 1098 and 1133 recommended that the EPA specify that the maintenance be conducted every 2,160 operating hours (90 days). Th e commenters (1098 and 1133) in its comments discussed the specifics of maintaining engines as it relates to oil changes, spark plugs, and inspecting belts and hoses. The reasons that allow larger engi nes to extend their oil change intervals include increased oil capacities, improved o il grades/synthetics, and the use of oil sweetening systems, the commenters (1098 and1133) said. In terms of spark plugs, the commenters (1098 and 1133) said that larger engines use better quality, mo re expensive spark plugs that last much longer than 1,440 hours. The commenters (1098 and 1133) asserted that if owne rs and required to change the spark plugs every 1,440 hours of operation, the higher quality more expensiv e spark plugs might not be able to be used because of the cost. The commenters (1098 and 1133) said that in the natural gas industry, it is standard operating procedures to change belts and hoses annually, and these compone nts are checked at an
interval consistent with established mainte nance intervals which can exceed both 1,440 and 2,160 operating hours.

Response : The EPA agrees with the commenters that it is appropriate to extend the intervals for conducting maintenance for existing large 4-stroke e ngines at area sources. Conducting maintenance too frequently when not needed is not beneficial a nd can be a waste of resources and have negative environmental impact. Because larg er engines have increased capabili ties compared to smaller size engines, maintenance intervals can be extended to less frequent interval s of every 2,160 hours for changing the oil and filter, and inspecting and repl acing as necessary, the spark plugs, hoses, and belts. Therefore, the EPA has specified in items 8 and 11 of Table 2d of the fi nal RICE NESHAP that maintenance should be conducted every 2,160 hours of operation or annually, whichever comes first.

4.4.2 Comment : Three commenters (1105, 1136 and 1145) comment ed on the oil analysis program. Two commenters (1105 and 1136) asked that the EPA allow ow ners who use an oil analysis program up to 5 days to complete an oil change in order to prev ent issues related to weather, weekends/holidays,196 accessibility to distant sites, etc. th at could cause the owner to be unable to address oil change issue. One commenter (1145) said that at least 7 days should be allowed for an oil change.

Response : The EPA agrees that the 2 days that were provided in the proposed rule at §63.6625(i) and (j) for completing the oil change where the oil analysis indicated that the condemn ing limits were exceeded was not an adequate amount of time because it did not consider weekends and holidays. However, the EPA does not think that 5 or 7 days are needed in or der to change the oil, even with potential weather, accessibility, and scheduling issues. The EPA believes that 2 business da ys is a sufficient amount of time, and has therefore specified at §63.6625(i) and (j) of the final rule that the engine owner or operator must change the oil within 2 business days or before commencing operation, whichever is later.

4.4.3 Comment : One commenter (1092) requested considera tion of alternative monitoring parameters under the optional oil analysis program to which exis ting engines in remote ar eas are now proposed to be subject and that the EPA add a footnote to Table 2d of the RICE NE SHAP that specifically allows a facility to petition the EPA for the use of alternative work practices, such as alternative monitoring parameters, under this General Provision.

Response : Sources already have the option to petition th e Administrator for alternative work practices under 40 CFR 63.6(g) as specified in Table 8 of the RICE NESHAP.



### 4.5 Performance Testing/Catalyst Check

4.5.1 Comment : A number of commenters (1075, 1089, 1095, 1105, 1136, 1323, and Alaska commenters (922, 924, 947, 974, 990, 1006, 1020, 1031, 1062, 1063, 1130, 1135, 1136, 1139, 1141, 1145, and 1444)) believe that it is not necessary to require simultaneous pre- and post-catalyst measurements for area source engine s that require catalytic control a nd that it should be optional to do so. In the commenter’s (1105) opinion, if the EPA doe s not allow sequential testing for pre- and postcatalyst measurements, then only the initial testin g requirement in 63.6630 should be required to be simultaneous. According to the co mmenter (1105), the short duration of portable analyzer tests do not justify the use of multiple analyzers as long as proper quality control (e.g., ca libration) is used and operating conditions do not change. Also, the co mmenter (1105) does not believe the costs and complexity associated with duplicat e test equipment is justified e ither, something that is further197 exacerbated for engines with multip le stacks. Commenter 1075 submi tted similar comments and is of the opinion that measurement accur acy would not be materially affected by allowing sequential
measurements where the measur ements are close in time. Commenter 1095 agreed with these statements. One commenter (1089) indi cated that it would accept simultane ous testing for the initial test, but for the subsequent annual testing, sequential te sting should be permitted. One commenter (1136)
said that the EPA should make th e requirement to conduct simultaneous pre- and post-catalyst tests for area sources optional. The commenter (1136) said that the EPA should either a llow sequential testing or only require the pre-test to be simultaneous. A ccording to the commenter (1136), the short duration portable analyzer tests required in §63.6640(c) do not wa rrant the use of multiple analyzers as long as proper quality control (e.g., calibration) is used a nd operating conditions do not change. The commenter (1136) also noted that the added cost and comple xity introduced by requiring duplicate test equipment and sample lines is not justified, particularly for engines with mu ltiple stacks. Another commenter (1145) said that the EPA should eliminate the requirement to c onduct simultaneous pre- and postcatalyst tests.

Response : The EPA disagrees with the commenters and simultaneous pre- and post-catalyst measurements will remain for performance testing. The portable analyzers are not expensive and even with multiple stacks, no more than two analyzers ar e necessary since they can be moved from one stack to the next. These devices are easy to use and hence training someone to use these devices is straightforward. In cases where an affected source does not have two staff members available to conduct the test, the work can be contracted out. Moreover, the test does not necessarily require two people to run. A single person can set up each analyzer separately and set them to begin sampling; then you may use the data gathered while each analyzer was runn ing. Or if the space permits, a single person could start each analyzer at the same time. Further, give n that portable analyzers give immediate results, it would be easy for someone to manipul ate the circumstances of the test to alter the results, if the rule allowed sequential testing. Also, CO is a product of combustion and combustion parameters are easily changed on RICE. In addition, simultaneous testing is th e only way to truly test the capture efficiency of the catalyst even though engines typically operate at steady state. In addition, the EPA is already allowing a portable analyzer versus a continuous emission monitoring system , which is a significant reduction in cost. For these reasons, the EPA is reta ining the simultaneous tes ting requirement for preand post-catalyst testing in the fina l rule. Lastly, the EPA is providing an alternative option to meet a concentration level instead of a percent reduction standard. This would elim inate the need for two198 analyzers since only the engine outlet would be m easured if owners and ope rators opted for this
alternative under the rule.

4.5.2 Comment : One commenter (1052) asked that sources be allowed to demonstrate compliance by testing one engine only where a group of units are the same make, model and model year.

Response : The EPA disagrees with the commenter that owners and operators should be allowed to demonstrate compliance with the rule by testing only one engine if the facility has several engines of the same make, model and model year. There is no guara ntee that simply because the engines are of the
same make and model and manufactured at the same time that the engines w ould perform similarly in the field. The engines are no longer equivalent af ter operation has begun because of operational differences, deterioration, and the types of malfunctions the engines have had. Emissions are affected by
these activities and therefore the EPA cannot be certain that emissions would be equivalent for all the engines. Consequently, the EPA has not included the commenter’s request in the final rule.

4.5.3 Comment : One commenter (1080) said that the use of CO and total hydrocarbons (THC) for formaldehyde is not necessary because published EP A methodologies and protoc ol gasses already exist to measure engine formaldehyde emissions directl y. According to the commenter (1080), these methods are presently being used in the field for the meas urement of formaldehyde compliance, and are widely accepted by the EPA and other international standard s testing organizations, including the American Society for Testing and Material s (ASTM). The commenter (1080) sa id the methods are EPA Method 320 - Vapor Phase Organic & Inorga nic Emissions by Extractive FTIR and ASTM D6348 - 12 Standard
Test Method for Determination of Gaseous Co mpounds by Extractive Direct Interface Fourier Transform Infrared (FTIR) Spectroscopy. One commenter (965) stated that the focus of the RICE MACT should be on controlling HAP emissions from existing and newly constructed RICE and not to impose limit on CO emissions without the intent to reduce CO emissi ons. Commenter 965 asserted that, since CO is used as a surrogate fo r HAP, enforcing management practi ces, rather than a numerical limit for CO, for existing non-emergency CI engines located at remote areas is more appropriate. Commenter (1080) raised several other issues related to the pr oposed change in testing procedure (the commenter also provided supporting data for these conclusions):

 Dataset – Dresser - Waukesha: The use of only one dataset to base the acceptable use of surrogates for the actual air toxic measurement it self is not acceptable. Data collected from199 hundreds of test facilities dem onstrate that there are not good correlations between CO and formaldehyde, THC and formaldehyde, and CO a nd THC on rich burn engines greater than 500
HP.

 Compliance Testing Guidelines: The use of arbitrarily set 15 -minute time intervals for compliance testing and the use of Portable Emissions Monitors for published the EPA compliance reference methods is not technically supportable.

 Private Sector Business Losses: Many small-sized companies will lose income by eliminating the compliance revenue for dir ect formaldehyde testing. Many companies geared up and had purchased capital equipment specifically accepte d by the EPA for formaldehyde testing on RICE engines.

 Test Cost: The cost of the use of a Portable Emissi ons Monitor (PEM) unit for CO and THC is significantly lower than published EPA methodologies, but does not define the true emissions of a rich burn engine. The proposed alternatives to the EPA and ASTM methods 320 and D6348, respectively, do not follow published EPA guidelines for a 15-minute samp ling period instead of three 1-hour runs. Fifteen minutes of testing on a rich burn engine does not represent actual emissions. When factoring in th e widely accepted practice of co mpliance measurement intervals
of three 1-hour runs with a dditional QA/QC requirements, the cost of an Instrumental EPA
Method 25A for THC or EPA Method 10 - Instru mental method for CO are equivalent in manpower and required time. Only the initial cap ital cost for an instrument to measure formaldehyde directly makes costs higher.

 Accuracy and Public Health: The acceptance of a less accurate measurement from a PEM to measure a surrogate with a poor correlati on with the listed h azardous air pollutant, formaldehyde, undermines the intention of the section 112 of the CAA which may be summed up as using the best available m easurement practices to ensure co mpliance of emissions in area sources to protect public health and welfare. The commenter (1080) said that the only way to pr operly follow the CAA guidelines is to determine emissions and violations of emissions by prope rly measuring the target compound of interest, formaldehyde. According to the commenter (1038), if th e technology exists and there is a direct way to measure the target compound of interest accuratel y, with published EPA me thodologies, and does not put any undue burden on industry, the EPA should act in the interest of the public health and welfare and not deviate or reduce the accuracy of those measured emissions by the use of poorly understood surrogates and less accurate emi ssions measuring technologies.200 Response : The EPA agrees there are published and ava ilable EPA methods for measuring formaldehyde
emissions. These methods are still in cluded in the final rule if owne rs and operators should choose to demonstrate compliance with the standards in terms of formaldehyde. However, the EPA is including an option in the final rule for owners and operators of 4SRB engines to demonstrate compliance with the 76 percent formaldehyde reduction emi ssion standard by testing emissions of THC and showing that the engine is achieving at least a 30 percent reduc tion of THC emissions. Ex isting 4SRB engines at populated area sources also have the choice of eith er meeting a 75 percent CO reduction level or a 30 percent THC reduction. The purpose of these alterna tive compliance options is to provide for less expensive and less complex, but equally effective, me thod for demonstrating compliance than testing for formaldehyde, where this has been determined to be appropriate. Not all sta tionary 4SRB engines will be able to use the alternative compliance options, i. e., where a formaldehyde concentration standard is required, owners and operators must test usi ng existing measurement methods available for formaldehyde such as Method 320 (FTIR) or 323 of 40 CFR part 63, appendix A, or ASTM D6348-03,
that the commenter cites. As discussed in RT C 5.2, data reviewed by the Agency shows a strong relationship between the reduction of THC and the re duction of formaldehyde and therefore it is suitable to allow sources to demonstrate compliance with a THC percent reduction requirement. The use of appropriate surrogates is commonplace in the regula tion by the EPA and has been upheld. In the case where the rule allows compliance to be demonstr ated via testing for CO or THC for existing 4SRB engines above 500 HP at area sources that are in populat ed areas, the EPA notes that this requirement is designed to merely ensure that the catalyst is worki ng so there is not a need for an extremely accurate test. To maintain a reduced testing burden, the EPA is allowing this option for these sources as formaldehyde tests remain more expensive and require more expertise. The EPA believes that testing for
CO or THC emissions is an appropriate alternative to testing for formaldehyde to ensure the catalyst is working properly and the EPA also believes that the testing of CO and THC does fairly track the emission reduction percentages for formaldehyde. Th e EPA does not agree with the comment that management practices, rather than a numerical level fo r CO, are more appropriate since CO is used as a surrogate. The commenter did not provide any informa tion to show how the use of a surrogate pollutant justifies a requirement for management pr actices rather than a numeric level. Regarding the commenter that submitted data that it believes demonstrated there is not a good
correlation between CO and formalde hyde for 4SRB engines, the EPA note s that it has not stated that
there is a direct correlation between emissions of CO and emissions of form aldehyde on a concentration201 basis for 4SRB engines at area source s of HAP. Rather, the option to me asure CO is only to show that the catalyst is functioning correctly and is reducing emissions. The co mmenter also did not provide any detail whatsoever about the data, such as the condi tions under which the engines were tested or the methods that were used. The EPA cannot really ev aluate the data without also having the underlying information about the testing. This is also true of the data submitte d with the comment that 15 minute
test runs were not sufficient. The commenter did not submit any information to show that the actual costs of testing using EPA Method 320 or ASTM Me thod D6348 are comparable to testing using EPA
Methods 25A or EPA Method 10. Informati on that EPA has gathered in the past 56,57,58 showed that testing for formaldehyde is considerably more expens ive than testing for CO or THC, and the EPA has the discretion to consider the cost and feasibility of testing when establishing the emission standards.

4.5.4 Comment : One commenter (1449) requested flexibility in the load range requirements when testing for formaldehyde. The commenter (1449) asse rted that, establishing a load range may be necessary for NO x , but for formaldehyde, concentrations are lower at high load due to higher combustion temperature which creat es less formaldehyde and also in creases catalyst reactivity. The commenter (1449) offered to provide test results ill ustrating this. The comment er (1449) reported that it typically conducts generator testing at 60 to 80 percent load ranges. The commenter (1449) asserted that another issue with testing generators at 90+ percent load range is that load transients at such high loads can cause the electrical systems to trip off line and shut down.

Response : There is already flexibility in the test load range for engines at area sources and engines less than or equal to 500 HP. The EPA does not specify that performance testing must be conducted at a specific load for these engines. These engines must be tested according to normal operating conditions. For more information, see response to question 31 in the EPA’s Questions and Answers document http://www.epa.gov/ttn/atw /rice/20120717riceqaupdate.pdf . The EPA has specified in the final rule that

56 See Attachment C and L of Letter to Melanie King, ESG/SPPD/OAQPS from Matthew Todd, American Petroleum Institute (API) Reciprocating Internal Combustion Engine Na tional Emission (RICE) Regarding National Emission Standards for Hazardous Air Pollutants (NESHAP) Proposed Revisions – Emission Contro l Cost Analysis Background for “Above the Floor” Emission Controls for Natural Gas-Fire RICE (November 2, 2009). EPA-HQ-OAR-2008-0708-0279. 57 Memorandum from Bradley Nelson, EC/R to Jaime Pagán, EPA. Summary of Portable Analyzer Testing Costs for Stationary Internal Combustion Engines. December 8, 2008. EPA- HQ-OAR-2008-0708-0024. 58 Memorandum from Bradley Nelson, Alpha-Gamma Technologies, Inc. to Sims Roy, EPA/OAQPS/ESD/Combustion Group, Portable Emissions Anal yzer Cost Information, August 31, 2005. EPA-HQ-OAR2005-0030-0057.202 the only engines that must be test ed within plus or minus 10 per cent of 100 percent load are the stationary RICE listed in §63.6620(b)(1 ) through (4) of the final rule.

4.5.5 Comment : One commenter (1095) asked that th e EPA clarify the language in §63.6603 and §63.6620(d) of the proposed rule to prevent co nfusion about the required test duration and recommended the following revision: “Compliance with the numerical emission limitations established in this subpart is based on the resu lts of testing the average of three 1-hour runs using the testing requirements and procedures in 63.6620 and Table 4 to this subpart. Each test run must last at least 1 hour unless otherwise specified in this subpart. ”

63.6620(d) “You must conduct three separate test runs for each performanc e test required in this section, as specified in 63.7(e)(3). Each test run must last at least 1 hour unless otherwise specified in this subpart

. ”

Response : The only engines that are not subject to de termining compliance based on the results of testing the average of three 1-hour runs are the engi nes in §63.6630(e) of the fi nal rule. The EPA agrees that it would be appropriate to clarify in §63.6620(d ) that a run duration of less than one hour may be specified in subpart ZZZZ for certain engines.

4.5.6 Comment : One commenter (1038) objects to the requireme nt to perform testing on an annual basis irrespective of whether THC or fo rmaldehyde is to be tested. The commenter (1038) noted that the current rule only requires testing every 5 years or 8,760 hours of operation, and changing to an annual test eliminates the cost savings that allowing the alternative could achieve. The commenter (1038) said that the EPA has not justified the increased testing frequency and believes that it is an unnecessary and burdensome requirement.

Response : It appears the commenter may have interpre ted Table 3 of the proposed rule incorrectly because the requirement in item 4 is to test every 8,760 hours of operation or 3 years for engines that are operated for more than 24 hours per calendar year a nd that are not limited use. Limited use engines would have to test every 8,760 hours of operation or 5 years, per item 5 in Table 3. Regardless, the testing frequency the EPA proposed and is finalizi ng for existing remote gr eater than 500 HP area source 4-stroke engines is more frequently than under the 2010 rule for these engines. More frequent203 testing is reasonable considering that the EPA is allowing portable devices and requiring lower test duration, which lowers the testing cost and burden s ubstantially. The cost of testing is also further reduced because the EPA is permitting sources to te sting for THC and CO, which are pollutants that are less expensive to test for versus formaldehyde. Al so, the EPA is not requiring as much monitoring on these engines and consequently there is a reduction in monitoring costs as well. Lastly, requiring more frequent testing is justified because on a cumulative basis the testing cost is substantially less because fewer engines are subject to this requirement.

4.5.7 Comment : One commenter (1063) said that the fina l rule for CI RICE should eliminate the requirement to conduct a performance test each time th e catalyst is changed, because this is contrary to the intent of the rule language in Tables 3 and 5 that indicate that no subsequent performance tests are required for CI RICE greater than 300 HP and less than or equal to 500 HP located at an area source. Alternatively, the commenter (1063) suggests, the EPA should clarify that the source test required to reestablish the values of the opera ting parameters when you “change” the catalyst reveres to a change in catalyst type or vendor, not when there is only like-kind replacement of the catalyst.

Response : The EPA disagrees. The requirement to conduc t a performance test after the catalyst is changed is necessary to ensure that the engine is st ill in compliance with the applicable standards. The replacement catalyst needs to be veri fied just as if it was being placed in a different engine. This requirement is different from the subsequent te sting requirements and does not conflict with the language in Tables 3 and 5 of the final rule rela ted to subsequent testing. The language in §63.6640(b) has been retained in the final rule and upon a catalyst change the owner/operator must conduct a performance test to demonstrate complian ce with the requirement emission limitation.

4.5.8 Comment : One commenter (1323) supports extending th e frequency of compliance testing to annually after demonstration of compliance.

Response : No response needed.



### 4.6 Test Methods204 4.6.1 Comment : One commenter (1131) requested that the EP A allow additional test methods to comply with the THC reduction requirement. Specifically, th e commenter (1131) asked that the EPA allow the
use of EPA Method 25 and its associated low level modification referred to as conditional test method (CTM)-035 and South Coast Air Quality Management District (SCAQMD) 25.3. The commenter (1131) said that CTM-035 is the SCAQMD standard test method for measur ing low level VOC emissions for over 10 years and is compatible with measuring e xhaust emissions from clean combustion sources. The commenter (1131) attached the meth od itself to the comment letter.

Response : The EPA maintains that EPA Method 25A is the preferred method to demonstrate compliance with the THC reduction re quirement. However, sources may request approval of the use of an alternative method, as provided in 40 CFR 63.7.

4.6.2 Comment : One commenter (1449) said that although it appreciates the inclusion of testing requirements that allow the use of a portable anal yzer, and the referencing of the simpler CTM-034 procedure, instead of ASTM D6522, the commenter (1449) believes that ther e are still provisions in CTM-034 that are more complex than necessary. The commenter (1449) claimed that portable analyzers have improved since CTM-034 was written. The comment er (1449) indicated that prescribed threephased measurement and calibration cycles descri bed in Appendix A of the method are no longer
needed to assure the electrochemical cells are fres h. The CO concentrations required by the rule are generally lower than measurements made when CTM-034 was developed so there is less concern, according to commenter 1449. Moreover, cell degrad ation is better understood, the commenter (1449) added. Analyzer manufacturers now provide specific guidance on preser ving cell health during the test by noting concentration and test duration, or employing dilution t echniques. For example, Testo specifies that a hydrogen compensated CO cell can measure for 15 minutes st raight at 250 ppm, and
follow with a 10 minute fresh air ri nse. A single 15 minute measuremen t would satisfy the requirements in §63.6640(c) of the rule without performing complicated three-phased sampling runs. The same is true of calibration. Therefore, the co mmenter (1449) requested that the Appendix A of CTM-034 include a provision that would allow single or alternative number of “pre-sampling calibrations”, and “postsampling calibrations” when manufacturer's instruc tions for assuring cell health are followed. The
“Measurement Data Phase Performance Check” of section 31.1 (Note: the EPA assumes commenter 1449 means section 13.1 since there is no section 31.1) would not be required fo r tests with a single “measurement data phase” because cell performance would not be compromised. However, Appendix A205 would still require periodic cell performance checks as required in section 13.3, “Repeatability Check,” even if single measurements are used.

Response : The commenter appears to have incorrec tly commented on the requirements of CTM-034, which is not required by subpart ZZZZ. The EPA deve loped a test procedure that is based on CTM-034 and is codifying that procedure (“ Protocol for Using an Electrochemi cal Analyzer to Determine Oxygen
and Carbon Monoxide Concentrations from Certai n Engines”) in appendix A to subpart ZZZZ. The provisions of CTM-034 that the commenter was concer ned with are different than the procedures in appendix A to subpart ZZZZ.

4.6.3 Comment : One commenter (1323) expressed support fo r the proposal to allow shorter duration emission testing using a portable analyzer.

Response : No response is needed.206 

### 5.0 THC/CO Compliance Demonstration Option

5.1 Comment : Many commenters (1002, 1038, 1098, 1004, 1070, 1084, 1089, 1095, 1104, 1105, 1112, 1145, and 1457) said that they are supportive of pr oviding an alternative compliance demonstration option for 4-stroke SI en gines greater than 500 HP at area sour ces. The commenter (1105) also said it supports using THC as an alternative to formalde hyde measurements for co mpliance verification for 4SRB engines that meet a per cent reduction. Two commenters (1004 and 1089) noted that measuring formaldehyde is difficult and expensive to do in the field. The commenter (1004) is supportive of the alternative THC option as it provides a more effec tive, simpler and less expensive method to comply with the rule. Commenter 1070 said that THC is a good indicator of catalyst performance for gas-fired engines. Commenter 1089 also said that THC re duction from natural gas-fired engines is a good indicatory of catalyst performance on engines. One commenter (1104) suppor ted the EPA’s proposed compliance demonstration option for those engines that are currently subject to 76-percent or greater formaldehyde reductions. The commenter (1104) stated that this is an excellent example of a lower-cost option that will achieve the same or greater emission reductions and just the type of regulatory improvement that the EPA shoul d pursue on a regular basis.

Response : No response is needed.

5.2 Comment : Three commenters (953, 982 and 1095) said that they are supportive of using CO as a surrogate for formaldehyde for 4SRB engines. Commenter 1095 also supports the use of portable analyzers and the option to use a high temperatur e shutdown device. Two commenters (953 and 982) said that CO is easy to measure due to the similari ties of CO and formaldehyde molecules in diffusivity rates and reaction kinetics properties and requested that the EPA require a 93 percent CO reduction. The commenter (953) indicated that it did not find any s upport in the docket for the claim that 75 percent CO efficiency correlates to 76 percent formaldehyde ef ficiency for 4SRB engines. The commenter (953) said that previous studies have indi cated that a 93 percent CO efficiency is needed to obtain a 76 percent formaldehyde reduction for 4SLB engines, and the co mmenter (953) believes th e same CO efficiency should be adopted for 4SRB engines. The commenter (953) submitted supporti ng information and data in its comments supporting the commenter’s (953) claim that 93 percent CO reduction is possible on 4SRB engines. Further, the commenters (953 and 982) sa id that both control technologies that would be used to reduce HAP emissions from 4SLB and 4SRB engi nes, that is, oxidation catalyst and NSCR, are207 both cost effective and widely available. The comme nters (953 and 982) said that requiring the same CO standard for both types of engines would put both engine technologies on equal footing and not provide an incentive for one technology over another. With that said, the commenters (953 and 982) ad ded that using CO effi ciency for 4SRB engines can be challenging because of the sensitive nature of the engine out CO levels, which can be easily affected by the air/fuel ratio. The co mmenter (953) noted that running the e ngine slightly lean, that is, 1- to 2-percent excess oxygen (O 2 ), can be used as strategy to achieve higher CO reduction, but the
downside is substantial increases in NO x emissions. Therefore, the commenter (953) believes the parameters must be tightly contro lled and in order to ensure this, the commenter recommended that the EPA also require proper management practices for NSCR operation to ensure the engine is correctly
calibrated for air/fuel ratio control. In contrast, one commenter (1076) said that usin g CO emissions as a surrogate for formaldehyde
emissions is not based on sound science. The comment er (1076) asked that this option be removed from
the rule and said that it contradicts the EPA’s earlier findings that testing never indicated that there is a correlation between formaldehyde a nd CO emissions for rich burn e ngines to the degree that was demonstrated for lean burn engine s, and that the EPA determined at that time that CO was not an appropriate surrogate for formalde hyde for rich burn engines. The commenter (1076) does not believe the proposal provides any evidence that at this point intime it is acceptable to use CO as a surrogate and
therefore said that the EPA cannot allow CO to act as a surrogate for HAP emissions for rich burn engines.

Response : The EPA proposed an equipment standard th at required the installation of NSCR to reduce HAP emissions for existing stationa ry non-emergency SI 4SRB RICE that are in populated areas. The proposed rule required these engines to demonstrate that the catalyst achieves at least a 75 percent CO reduction or a 30 percent THC reduction. The EPA di scussed in the preamble to the proposed rule, beginning at 77 FR 33815 the events leading up to a nd the justification for the June 2012 proposal to allow THC and CO testing as alternatives to form aldehyde testing for certai n rich burn engines. Among
some of the reasons the EPA finds it appropriate to allow THC and CO to be tested instead of formaldehyde are cost and ease of measurements, partic ularly because some of the engines affected are in remote, sparsely populated areas. Therefore, the EPA is retaining this requireme nt in the final rule to demonstrate compliance by showing a 30 percent or mo re reduction in THC emis sions or 75 percent or more in CO emissions. These alternative complian ce measures are supported by various industry groups,208 including engine manufacturers, engine operators in the oil and gas industry, power companies, as well as some state agencies. Different engine operators concur with the EPA that THC is a good indicator of catalyst performance. The EPA is also adding another option that allows the owner and operator of the engine to demonstrate that the catalyst achieves a CO concentration level of 270 ppmvd at 15 percent
O 2 . This concentration level represents a 75 perc ent reduction from typical uncontrolled emissions from existing stationary non-emergency SI 4SRB RICE a nd is the CO standard required for new SI 4SRB engines in the NSPS for stationary SI engines. The EPA agrees with commenters that NSCR is capable of reduci ng CO emissions by more than 75 percent from rich burn engines and the EPA is not claiming that a 75 percent CO reduction efficiency correlates to 76 percent reduction in formaldehyde. Th e EPA also agrees with other commenters that there are similarities between CO and formaldehyde emissions trends although a direct correlation has not been established. With that said, the EPA is not setting a MACT numeri cal emission limitation standard for existing non-emergency 4SRB stationary RICE greater than 500 HP at area sources that are remote, but rather a standard base d on GACT and in this case, an equipment standard. The equipment standard being finalized for these engines at area sources is different than the standard where a 76 percent formaldehyde reduction is required, which is th e standard for existing a nd new rich burn engines above 500 HP at major sources. The 75 percent CO reduc tion efficiency is provided as an option to the initial compliance demonstration and is to ensure proper catalyst activity on a regular basis later on. Since the purpose of this test is to ensure the cat alyst is working, the EPA be lieves that a CO reduction of 75 percent is sufficient, because a 75 percent reduc tion in CO clearly shows th at the catalyst is active and working. The Agency does not disagree that a 93-percent CO reduction is possible on 4SRB engines; however, it is not logical to establish a 93 percent CO efficiency for 4SRB engines simply because this reduction level correlated to a 76 per cent formaldehyde reduction for 4SLB engines based on previous studies. In fact, the prev ious studies that the commenter referred to indicated that the CO efficiency was quite variable from 4SRB engines and a 76 percent formaldehyde efficiency did not correlate to a 93 percent CO reduction in that study. 59 As the commenters note, the EPA was unable to demonstrate a sufficient relationship between CO emissions and HAP emissions for the original 2004 RICE NESHAP and could not at that time use CO as a surrogate for HAP for rich burn engines as the Agency did for lean burn engines. Engine manufacturer Dresser-Waukesha, who provided data to the EPA that showed that a strong relationship

59 Memorandum from Melanie Taylor and Jennifer Snyder, Alpha -Gamma Technologies, Inc. to Sims Roy, EPA OAQPS ESD Combustion Group. January 7, 2004. EPA-HQ-OAR-2002-0059-0665.209 exists between the percent reducti on of THC and the percent reduction of formaldehyde (the surrogate for HAP) for engines using NSCR, has previously indicated to the EPA that it believes that the Agency was not able to establish a relationship because ther e was insufficient data available at that time, but that such a relationship may exist. As discusse d in the preamble to the proposal Dresser-Waukesha provided data to the Agency from testing that wa s performed showing that that THC reduction across the catalyst is an appropriate surr ogate for HAP reduction across the cat alyst. Because of what the EPA believes demonstrates a strong relationship between percentage reductions of THC and percentage reductions of formaldehyde from 4SRB engines using NSCR based on th e available data, using THC as an alternative compliance option is justified. Again, the EPA is not using CO as an actual surr ogate of HAP emissions in the final rule, but using the CO test (and THC test) to ensure the cata lyst is working on rich burn engines subject to an equipment standard. Although the EPA has not been able to demonstrate in the past a sufficient enough relationship between CO and HAP e missions from rich burn engines, the Agency does believe that the testing of CO does fairly track the emission reduc tion percentages for formal dehyde and certainly shows that a catalyst is functional.

5.3 Comment : One commenter (953) indicated concern over the proposal to use THC as a surrogate for formaldehyde and questioned whether this is appropr iate. The commenter (953) argued that there is no
indication that there is a correlation between THC and formaldehyde after the catalyst has been in operation for several thousand hours, and the data used by the EPA appears to be have been on a degreened catalyst, the commenter (953) said. Therefore, it is uncertain whether 30 percent THC reduction will ensure 76-percent fo rmaldehyde reduction on a long term basis. However, if the EPA finalizes a THC reduction as a surrogate for HAP reduction, the commenter (953) indicated that 30- percent THC efficiency is easily achievable long-t erm with NSCR. Commenter 982 voiced very similar concerns as commenter 953 did, and similarly concluded that as a wo rst-case scenario, using THC is reasonable. However, more work is needed to study the effects on THC reduction over time, the commenter (982) said. One commenter (1076) said that using THC emis sions as a surrogate fo r formaldehyde emissions is not based on sound science. The commenter (1076) believes the proposal ignores available technology and would be detrimental to public h ealth if it goes final. The comment er (1076) referred to the DresserWaukesha data the EPA analyzed for the proposal a nd said that the manufacturer does not account for a number of critical variables. For instance, the data did not account for catalytic deactivation nor did it210 account for the difference between the type of fuel being used, i.e., pi peline-quality versus gathering-line gas, the commenter (1076) said. The commenter (1076) added that, as catalyst deactivation occurs, there may be a difference in the rate the various HC catal yze, which means it is not certain that a 76-percent formaldehyde reduction is being achieved even though THC is being reduced by 30-percent. The commenter (1076) urged the EPA to properly study a ll aspects and factors fo r formaldehyde reduction and not adopt the proposed THC compliance demonstra tion option, but retain the current requirement to test for formaldehyde.

Response : The EPA disagrees that it is inappropriate to use THC in or der to demonstrate compliance with the rule for 4SRB engines. Information the EP A analyzed indicated that a 30 percent reduction in
THC emissions would lead to a substantial reduction in formaldehyde emissions, by at least 76 percent. For compliance demonstration purposes, the EPA still beli eves it is appropriate to allow sources to test for THC emissions, based on the data that was review ed at the time of the proposal. The commenters did not provide any information to show that the reductions would not c ontinue over a long-term basis, and the commenter goes on to say that 30 percen t THC reduction is achievable long-term.. Regarding the comment that the proposed us e of THC as a surrogate does not account for catalyst deactivation, the commenter did not provide any da ta or information to show that this should be a concern because a catalyst that was deactivated was still achieving the required reductions of THC. The commenter also did not provide any data to s upport its contention that ga thering line quality gas would lead directly to catalyst d eactivation that would then lead to compliance with the THC standard even though formaldehyde was not being reduced.

5.4 Comment : One commenter (1098) asked that the EPA clar ify what is meant by THC in the rule to make it clear what is required when demonstrat ing compliance with the THC optional demonstration option. The commenters (1098) pointed to 40 CFR part 60, subpart JJJJ, which includes a definition of VOC that references §51.100(s) of 40 CFR, but a f ootnote to Table 1 of that subpart indicates that formaldehyde is not included in the VOC calculati on. The commenter (1098) said that it understands THC to be every organic compound in the gas comp rised of carbon and hydrogen that burns in the presence of a flame or the “tot al gaseous organic concentration of vapors consisting primarily of alkanes, alkenes, and/or ar enes (aromatic hydrocarbons).”211 Response : Volatile organic compounds and THC are di fferent pollutants. Volatile organic compounds are a list of specific pollutants and THC is defined by the test method used for measuring the pollutants. For the purposes of this rulemaking, THC is m easured by EPA Method 25A. EPA Method 25A does not measure individual compounds; it is a carbon co unting method (it counts carbon molecules). For example methane (CH 4 ) has 1 carbon, and propane (C 3 H 8 ) has 3 carbons. The EPA has specified in the
final rule that sources must measure THC emissi ons using Method 25A, reported “as propane” because propane is the gas most typically used as the calibra tion gas. The requirement to report “as propane” is simply a reporting request and does not imply that propane is in a ny way related to natural gas or formaldehyde.

5.5 Comment : One commenter (1098) requested that the rule provide an alternative emission standard for existing rich burn engines above 500 HP that must meet either a 75 percent reduction in CO or a 30 percent reduction in THC in terms of concentration. Specifically, the commenter (1098) requested that a CO ppmvd standard be included in the rule, which w ould ensure consistency with requirements for other engine types that have the choice to meet a concentr ation limit, but would also provide a cost effective method to testing. This way, compli ance would not necessarily have to be based on percent reduction and the tester would not have to employ two anal yzers to make simultaneous measurements, the commenter (1098) said. According to commenter 1098, uncontrolled CO emissions for a 4SRB engine is between 1,000 and 1,500 ppmvd at 15 percent O 2 , which means that a post- catalyst CO exhaust level with a 75-percent reduction efficiency would be between 250 and 375 ppmvd at 15 percent O 2 . Under 40 CFR part 60, subpart JJJJ new 4SRB engines are s ubject to a 270 ppmvd CO limit and the commenter (1098) asked that the EPA adopt the same standard for existing 4SRB e ngines above 500 HP in this rule. This would create consistency between the two regulations, increase enforceability and simplify compliance, the commenter (1098) said.

Response : The EPA agrees with the commenter that it is appropriate to add another compliance option that allows the owner and operator of an engine to demonstrate that the catalyst achieves a CO
concentration level that is cons istent with a 75 percent reduction from typical uncontrolled emissions from existing stationary non-emerge ncy 4SRB RICE. Therefore, the EPA has included an alternative standard in the final rule of 270 ppmvd at 15 percent O 2 . As noted by the comment er, this limit also creates consistency with the CO st andard required for new SI engines in the NSPS for stationary SI engines under 40 CFR part 60, subpart JJJJ.212 

### 6.0 Provisions for Sources in Remote Areas

6.1 Remote Areas of Alaska

6.1.1 Comment : Several commenters (874, 877, 924, 946, 964, 974, 1006, 1020, 1031, 1056, 1062, 1063, 1071, 1105, 1130, 1135, 1136, 1139, 1141, and 1145) expressed that they were supportive of the changes the EPA has proposed that affects stationary engines located in remote areas of Alaska. In addition, some commenters (877, 974, and 1031) agreed with the EPA that GACT for existing stationary
CI RICE located in the redefined “remote areas of Alaska” should be defined as the management practices for non-emergency stationary RICE less than or equal to 300 HP as listed in Table 2d of the proposed regulation, rather than th e numerical emissi on limits for CO. Some commenters (877, 924, 946, 974, 1031, 1062, 1130, and 1135) agreed that it is appropriate to remove the reference to the Federal Aid Highway System (FAHS). Commenter 877 said that this change correctly recognizes that remote areas acce ssible by the marine highway system face the same unique challenges as those areas not accessibl e by the FAHS. Some commenters (946, 964, 974, 1031, 1062, and 1135) added that areas accessi ble by the FAHS, but not connected to the Alaska Railbelt Grid face the same unique challenges as those areas no t accessible by the FAHS. Commenter 1130 said that
more than two dozen road and Alaska Marine Hi ghway System (AMHS) connected remote Alaska communities faced with staggering fuel, freight, and maintenance costs would otherwise be ineligible for the cost saving regulatory relief currently afforded under the remote area definition.

Response : No response necessary.

6.1.2 Comment : One commenter (1139) said that the rule shoul d return to the original interpretation of
FAHS/AMHS definition that is cons istent with 40 CFR §69.51, which defi nes the areas as “geographical areas of Alaska designated by the State of Alaska as being accessible” by the FAHS. The commenter’s (1139) historical approach stemme d from motor vehicle rulemakings and defined accessibility by the FAHS as only the AMHS ferry te rminals that have regular, year-r ound, drive-on/drive-off service as presented on the DOT April 2006 National Highwa y System Map. However, the commenter (1139) said, the EPA now appears to interpret accessible by the FAHS to include a ll AMHS ferry ports. The commenter (1139) noted that those additional ports include isolated communities (e.g., Kake, Pelican, Cold Bay, King Cove, Sand Point, False Pass, etc.) that are ports with seasonal and/or intermittent one time per week or per month connections to th e AMHS. Commenter 922 said that the EPA should213 explicitly grant an exemption to remote power generation systems th at are not served year-round by the
FAHS.

Response : The EPA has not changed the interpretation of which areas are not considered accessible by the FAHS. Communities that do not have regular, year -round, drive-on/drive off ferry service are still not considered accessible by the FAHS.

6.1.3 Comment : Several commenters (877, 974, 1031, 1056, and 1130) generally agreed with the first two criteria of the applicability definition, but sa id that the EPA should de lete the third criterion regarding 12 MW units and the 500-hour operating li mit based on the 10-year rolling average. Some commenters (877, 974, and 1031) said that the nameplate capacity of a stationary source has no effect on the unique infrastructure and environmental challe nges that the EPA alrea dy recognizes are genuine
obstacles for remote Alaskan communities. The comme nters (877, 974) said that a backup diesel plant
that meets the first two criteria should be able to use management practices. The commenters (877, 974, 1031, 1056, 1130) added that the 12-MW value appears to be arbitrary and incons istent with other air quality regulations that clearly defi ne EGUs as those greater than or equal to 25 MW. In conclusion, the commenters (877, 974) said that if the EPA maintains the nameplate capacity requirement, it should be changed to be 25 MW. One commenter (1444) said th at the 12-MW limit based on syst em capacity means that some utilities, like the Copper Valley Elect ric Association (CVEA), may not be nefit from the other changes to the remote area definition. Specifically, the commenter (1444) said that the definition in the rule conflicts with other parts of the revised rule, es pecially the page 117 definition that sets a 12-MW condition on generating “capacity of area sources,” wh ich apparently means each power plant, not the power output of the utility as a whole. The commenter (1444) added that utilities that cover large service area may have many small generating un its that in total generate more than 12 MW, but these emissions are geographically disbursed. If this change is not made, the commenter (1444) said that these utilities cannot afford to pay substantially higher rates if they are not exempted from the standard. However, other commenters (1006) support se tting a 500-hour run limit based on a 10-year average because it recognizes the fact that for re newable energy based Alaskan system such as the commenter’s (hydro power), in most years actual run time would be far below this limit, but in an emergency there may be a year with a higher r un time. Other commenters (877, 974, 1444) objected to the 500-hour operating limit based on a 10-year rolli ng average. The commenters (877, 974) said that214 the unique conditions in remote areas of Alaska pr esent obstacles to implem enting a numerical emission standard in such communities. The commenters ( 877, 974 and 1031) said that it is unclear what timeframes should be used to calculate the 10-year rolling average, particularly whether the data set would include data collected prior to implementa tion of the infrastructure improvements related to renewable energy. Two commenters (877 and 1031) sa id that the current rules ignores current investments in renewable energy and would diver fu ture investments away from additional renewable energy infrastructure in order to fu nd cost control equipment that w ould be required to meet numerical emission standards on engines that ra rely run today. For example, comment er (877) stated that if the 10- year rolling period were to begin with a 2003-2012 data set, then the renewable energy infrastructure developments recently constructed as a result of the Alaska Renewa ble Energy Fund grant program are disregarded. The commenter (877) explained that th e grant program allowed them to build a new wind energy resource which has significantly reduced th e amount engine hours since mid-2009; however, the proposed rule would still exclude one of the commen ter’s (877) diesel power plants from the "remote area of Alaska" definition because of higher histori cal engine use during the company’s pre-wind era. One commenter (1444) agreed with re quests to allow sufficient flexibility for the Agency to approve a utility exemption without compliance with the full 10- year rolling average requi rement to reflect past and future system improvements that reduce emissi ons. The commenter (1444) said that without this change, Ketchikan ratepayers will be facing more than $500,000 a year burden to meet the revised air standards for a backup generator that the EPA clea rly intended to spare Ketchikan from having to upgrade. Two commenters (974 and 1031) added that as the 10-year rolling average moves into the future, it is unclear how affected remote Alaska co mmunities would be able to shift from costly and complex numerical emission limit requirements to the more reasonable management practice requirements, or vice versa, if a community’s lo ad growth resulted in exceeding renewable energy supply. One commenter (874) suggested an alternative to the third criterion such as allowing flexibility in how many years to include in the rolling averag e calculation. The commenter (874) gave an example of how a shorter averaging period can more accurate ly reflect current and future probability of remaining below the cap as renewable energy become s available. Another commenter (964) said the definition should allow exceptions for extenuating circ umstances such as loss of transmission lines. The commenter (964) added that in some areas, the bulk of the hydroelectric generation is supplied to the
load centers on non-redundant transmission lines. Re pairs to inaccessible lines are difficult and may impossible for substantial periods.215 One commenter (877) also stated that the thir d criterion also includes a confusing sub-criterion that the location of a stationary source greater than 12 MW in nameplate capacity can still be considered
to be within in a “remote area of Alaska” if th e engine is used exclus ively for backup power for renewable energy and is used less than 500 hrs/yr on a 10-year rolling average. The commenter (877)
stated that this condition is unr easonably complex and unclear. The commenter (877) stated that the historical use of diesel engines, of which remo te Alaska communities like Kodiak are required to maintain in redundant back-up capacity to ensure relia bility on our isolated micro-grids, has no effect on the unique infrastructure and environmental challe nges that the EPA alrea dy recognizes are genuine obstacles to implementing a numerical emissi on standard in our remote island community. Some commenters (877, 974, 1031 and 1130) said that the 10-year recordkeeping requirement on stationary sources would conflic t with Alaska Admin istrative Code 18 AAC 50.326(k)(B)(7) and/or other air program requirements such as Title V that establish a 5-year record retention period. Because of this, the commenter’s (877) comp iled engine hour data only go back to 2006, and this may be true for other stationary sources (974, 1031). One commenter (1130) asked what forms of elec tric generation the definition of “renewable energy” includes. The commenter (1130) suggested that the EPA use the definition of “renewable energy” as provided under the Renewable Energy Fund program managed by the commenter. Another commenter (964) said the term “renewable energy” should be clarified to include hydroelectric energy. One commenter (1139) said that the EPA should wo rk with operators who rely on intermittent renewable energy to craft an appr opriate energy products test for th eir engines. One commenter (1130) asked if the definition of backup power” only occurs in an emergency (such as when a renewable energy generator or transmission line fails) or does it include “normal” circumstances (such as when hydroelectric project water levels are not sufficient to provide 100 percent of the power requirement)?

Response : As described above, most commenters were gene rally supportive of the first two criteria the EPA proposed to establish under an expanded definiti on of a “remote area of Alaska,” but raised concerns regarding the third criteri on. The EPA proposed that areas of Alaska that are accessible by the FAHS and that met all of the following criteria w ould also be considered remote and subject to management practices under the rule: (1) the stationary CI engine is located in an area not connected to the Alaska Railbelt Grid; (2) at least 10 percent of the power generated by the engine per year is used for residential purposes; and (3) the generating capacity of the area source is less than 12 MW, or the engine is used exclusively for backup power for renewable energy a nd is used less than 500 hrs/yr on a 10-year216 rolling average. After considering the public comme nts received on the proposed criteria, the EPA is finalizing the first two criteria as pr oposed, but finalizing a slightly diff erent third criteri on. In this final rule, existing CI engines at area sour ces of HAP are considered remote if they meet the first and second criteria above and they are either at a source w ith a generating capacity less than 12 MW, or used exclusively for backup power for renewable energy. Based on public comments received on the proposal, the EPA is not finalizing the limitation that the engine be used less than 500 hrs/yr on a 10- year rolling average. The EPA agrees with commente rs who indicated that ba sing the applicability on the previous 10 years of operation would ignore r ecent investments in renewable energy that have significantly decreased engine hours of operation in recent years. This change should also simplify the applicability determination for sources and avoid any real or perceived i ssues regarding access to
historical records. In terms of the generating capacity of less than 12 MW that remains as part of the criteria in the final rule that commenter 1444 indicated concerns about, the EPA clarifies that this is the capacity of the area source. According to research conducted, genera ting systems at area sources in sparsely populated areas are generally smaller than 12 MW. Specifically, the EPA di d not find any community type generating facilities in the non-ra ilbelt area above 12 MW. Therefore, after looking at small remote communities that this provision was intended to be li mited to and determining that all were less than 12 MW, the EPA believes 12 MW remains appropriate as the cutoff. According to information the Agency
received from the CVEA 60 and information from EPA Region 10, generating plants owned by the
CVEA will be able to take advantage of this provision. No inform ation was provided to the Agency to
indicate otherwise. The EPA did not receive any compelling arguments that would support using a different system capacity limitation and believes that 12 MW is the appr opriate cutoff for distinguishing the areas of Alaska in conjunction w ith the other criteria of the defin ition to determine which CI engines would be subject to management practices. The EPA does not think there is reasonable justification for providing prime power stationary engines at facilit ies generating more than 12 MW with remote area status, and believes these engines should be subject to the requirements that apply to non-emergency engines. Most certainly the EPA does not agree that the system capacity limitation should be set at 25 MW. The RICE NESHAP is a different regulation th an the NESHAP for Coal and Oil-Fired Electric Utility Steam Generating Units, which commenters refe r to, and the RICE NESH AP addresses different, much smaller sources than that regulation and the EPA does not think it is appropr iate to set the capacity

60 Letter from Robert A. Wilkinson, CVEA to Stephen Page, EPA. RICE NESHAP. January 10, 2012. EPA-HQ-OAR-2008- 0708-0848.217 threshold at 25 MW under this rule merely for cons istency with other requirements that apply to much larger units. The EPA is also defining “backup power for renewabl e energy” in this final rule as engines that provide backup power to a facility that generates el ectricity from renewable en ergy resources, as that term is defined in Alaska Statute 42.45.045(l)(5): “r enewable energy resources ” means (A) wind, solar, geothermal, waste heat r ecovery, hydrothermal, wave, tidal, ri ver in-stream, or hydropower; (B) lowemission nontoxic biomass based on so lid or liquid organic fuels from wo od, forest and field residues, or animal or fish products; (C) dedicated energy crops av ailable on a renewable basis; or (D) landfill gas and digester gas. This change provides clarity to sources and should be fa miliar to them. The EPA believes that adding this definition also clarifies th at such generators are allowed to operate under the remote definition. The definition of backup power for renewable energy has been added to §63.6675 of the final rule and Alaska Statute, Title 42 – Public Utilities And Ca rriers And Energy Programs, Chapter 45 – Rural and Statewide Energy Programs, Ar ticle 1, Power Assistance Programs, Sec. 42.45.045. Renewable energy grant fund and recommendati on program, effective May 3, 2012, has been incorporated by reference at 40 CFR §63.14(d)(10).

6.1.4 Comment : One commenter (1139) said that the propos al should clarify how to treat a source classification change that causes exempt Alaska e ngines to become subject to the emission limits. For example, the commenter (1139) aske d, if a CI engine was part of a source whose generating capacity was limited to less than 12 MW by its distribution sy stem and community growth requires changes in the distribution system that rem oves this limitation, then the comme nter (1139) asked if the emission and ULSD standards apply immediately, or if there would be a compliance schedule.

Response : If changes are made to the source that resu lt in the engine no longer meeting the criteria specified in §63.6603(b)(2), the engine should comply with the applicable requirements for an engine that does not meet the criteria in §63.6603(b)(2) (i.e , emission limitations, cr ankcase emission controls, ULSD) at the time the engine no long er meets the criteria in §63.6603(b)(2).

6.1.5 Comment : Some commenters (877, 946, 974, 1031, 1062, 1130 and 1135) supported the provision that at least 10 percent of the powe r generated by these engines per ye ar should be used for residential purposes combined with the requirement that the re mote definition should onl y consider engines not
connected to the “Alaska Railbelt Grid. Some of the commenters (877, 946, 974 and 1062) added that218 these two criteria reflect a reasonable approach to describe the type of Alaskan communities and electrical systems that serve remote residential populations wher e the impact of higher energy costs is of greatest concern. Commenter 1130 proposed to use the de finition of “residential customer” as used in the Power Cost Equalization (PCE) program, to de fine “residential purposes.” According to the commenter (1130), the PCE definition provides a basi s that is readily understood by remote Alaska villages. One commenter (1063) disagreed that there s hould be any requirement for residential power production in the remote definition. The commenter (1063) said that RICE located in industrial facilities rather than in towns and villages (e.g., Alyeska’s pipeline pump stations) are much more remote from public activity and have far less impact on public hea lth than remote RICE such as engines providing residential power that are located at or near human activity. Accordi ng to the commenter (1063), remote
industrial facilities share the same extreme weathe r conditions, reliance on on-site power, and high costs unique to Alaska. One commenter (1139) said that the EPA should clarify that an owner or operator may use readily available system information such as residential and non-residen tial sales records to ascertain if an engine on that system meets th e criterion. The commenter (1139) adde d that it is unclear whether an industrial, military, or housing c ontractor camp operator such as a remote mine or exploratory drilling operation would be classified as residential purpose s and the EPA should clarify the term “residential purposes” consistent with the intent of the propose d rule-making to ensure both clients and regulators have a clear understanding on how to make this dist inction. One commenter ( 922) said that the EPA should clarify that the 10 percent residential use in the exemption applies to electricity generation supporting bunkhouses, laundry services and galley serv ices that support a seafood processing industry facility.

Response : The EPA agrees with the commenters that it is a ppropriate to limit the remote classification to engines that are used at least pa rtially for residential purposes, where the impact of higher energy costs is of greatest concern. The EPA agrees that an ow ner or operator may use readily available system
information such as residential and non-residential sales records to ascer tain if an engine on that system
meets the criterion. The EPA does not agree that it would be appropriate to us e the definition of “residential customer” as used in the PCE program, to define “residential purposes” because the definition of219 “residential customer” in the PCE program includes residential locations that are also engaged in commercial activity. The EPA disagrees with the comment that ther e should not be any requirement for residential power production in the remote definition. The EP A is also clarifying that for the purposes of considering if the 10 percent resi dential criterion is met for the ex ample of bunkhouses, laundry services and galley services that support a co mmercial or industrial f acility (such as a seafood processing) where the common control and operation of the units is a commercial or industrial s ource, the power serving
such situations would not be considered to be resi dential. The intent of these provisions is to be responsive to the comments that presented to the Agency compelling evidence, documenting the need to ease the burden on electrical systems that serve re mote residential populations, where the impact of higher energy costs is of greatest concern. Alaskan communities face long, cold, often very wet winter weather, with extended periods of low light levels, that necessitates planning and preparedness to cover community power needs should there be a failure in the primary power system, which is most often hydroelectric. Communities not connected to the Railbelt grid are isolat ed and must be able to self generate all of the power needed by the communi ty. Therefore many communities utilize very large diesel engines to serve as back up. Use of the engi nes by the isolated community utility operators is strictly minimized due to the high co st of diesel fuel which must be passed on to the residential rate payers. For example in Ketchikan, Al aska, when only hydropower is used, the typical residential electric cost is 9.58 cents per KW-hr. This cost is comparable to the cost of electric ity in Portland, Oregon, at 10.1 cents per KW-hr. In Ketchikan, when diesel-fired generation is necessary, the cost of electricity increases to 34.58 cents per KW-hr. As an example of the limited amount of time the engines are used when in place as back-up to hydropower, Ketchikan us ed their engines, over a ten year period, for only 3.7 percent of the possible hours in that time peri od. The sparse population in non-Railbelt communities
in Alaska means that for the isolated utilities that serve those areas there are few customers to bear the costs of electricity generation. Fo r example CVEA serves 3,800 customers (8000 area residents) in a geographic area larger than many states. Long dist ances to metropolitan areas, complications due to weather, and lack of transportation lead to a greater costs for the installation of controls when compared to Alaskan communities on the Railbelt grid, or commu nities in the continental United States. Cost of living index information has been presented, documen ting that communities that are not on the Railbelt grid have a cost of living substantially higher than Alaskan communities on the Railbelt grid, or
communities in the continental United States. Cons idering the greater cost of living for community members, who are in many cases near or below pove rty levels, and how sparse the population is that220 may be impacted by emissions, the benefits of placi ng controls on engines in these remote Alaskan communities does not outweigh the incr eased costs that would be borne by the rate paying customers in
these communities. Engines that service operations that are under common control of a commercial or industrial enterprise are in a substantially different situatio n. Commercial and industrial installations are better
suited to the use of aftertreatment emission control devices because th ey have appropriate facilities, finances and personnel to handle engines that use aftertreatment.

6.1.6 Comment : Some commenters (1062, 1130 and 1141) sa id that the EPA should expand the
definition of remote areas of Alaska under the NSPS to align with the NESHAP definition. One commenter (1062) noted that if the same remote area r econstructs an existing engine or installs a model year 2014 or later diesel engine, the area will be subject to the full final NSPS Tier 4 emissions requirements, which are not viable or sustainable in small, isolat ed grid communities. Commenter 1130 added that aligning the existing N SPS definition with the new NESHAP definition will avoid regulatory confusion, complexity and unwarranted cost and provi de the regulatory relief to rural Alaska utilities and communities intended by the EPA.

Response : The requirements in the NSPS for stationary e ngines in remote areas of Alaska are not the focus of this rulemaking and are outsi de the scope of this final action.



### 6.2 Expand Remote Category to Include CI Engines

6.2.1 Comment : Several commenters (871, 882, 933, 1002, 1004, 1047, 1056, 1063, and 1078) said that the EPA should establish a remote area category fo r CI engines as well and extend GACT/management practices to remote CI engines also. One commenter (1056) argued that it makes no sense to require costly emission controls on CI engines that are in sparsely populated areas that conceivably achieve no health based benefit. Several commenters representing Alaska groups also agreed and said that the EPA should expand the types of sources subject to the remote provisions and a pply remote management GACT to offshore diesel CI engines and remote CI RICE. Commenter 1004 said that the arguments made for establishing a remote category of existing SI engines is equally valid for CI engines as well. According to one commenter (882), it has about 40 CI engines above 300 HP at area sources in the221 Monterey Bay Area District that ar e used for agricultural field irrigati on and would be required to install oxidation catalyst for HAP control under the rule. E ach engine would be classified as a “remotelylocated agricultural engine” as defined in California ’s ATCM for Stationary CI Engines, commenter 882 said. Two commenters (882 and 1047) said that langua ge could be added to the rule to define a “remotely-located agricultural engine.” These engines are located in Federal attainment areas and should not be required to install aftertr eatment and be subject to testing and monitoring, the commenter (882) believes. According to the comment er (882), the CA ATCM found that the toxic risk from these engines is minimal. The commenter (882) would be suppor tive of management-based practices for these engines. The commenter (882) recommended that the language from the CA ATCM for the definition of remote be considered, which reads as follows:

“Remotely-Located Agricultural Engine means a stationary diesel-fueled CI engine used in agriculture that is: (A) Located in a Federal ambient air quality area that is designated as unclassifiable or attainment for all PM and ozone NAAQS (Title 40, Code of Federal Regulations, section 81.305); and (B) located more than one-half mile from any residential area, school, or hospital. Commenter 933 said that there are several engi nes located on the US Navy San Nicolas Island,
which is located more than 25 miles from the mainla nd and is not open to the public. There are several stationary CI engines at this location, some whic h will require add-on emission controls, the commenter (933) said. All fuel is barged to the island, accordi ng to the commenter (933) a nd the engines will need
to use new fuel for add-on control. The commenter (933) requested that th e engines on San Nicolas Island be exempted entirely or exempted from having to install add-on controls. One commenter (1063) said that the EPA should revise Table 2d, Item 1, by adding “nonemergency, non-black start CI remote stationary RICE less than 300 HP,” or explain why CI RICE
located in remote areas have been treated differ ently under the proposed rule. Another commenter (965) requested that EPA reconsider the numerical limits specified in Table 2d of the RICE MACT for nonemergency CI engines with rated capacity greater than 300 HP and allow demonstrating compliance with the RICE MACT by meeting the work practice standards. Two commenters (1002 and 1047) asked the remote exemption proposed fo r certain existing SI engines at area sources of HAP emi ssions also be extended to existing remotely located agricultural CI engines at area sources of HAP emi ssions in Federal attainment and unclassifiable/attainment areas and areas that do not significantly impact non-attainme nt areas. Assuming these e ngines are distant from222 human activity, the commenter (1047) believes that it is appr opriate to not include requirements that
would necessitate aftertreatment a nd extensive testing and monitoring.

Response : The issue of extending a remote category defi nition to CI engines and establishing GACT management practices was not discussed at proposal and the EPA cannot address these CI engines in this final rulemaking. The EPA was obligated in 2010 to address HAP emissions from CI sources not already addressed in 40 CFR part 63, subpart ZZZZ and finalized those standards to meet its statutory obligation under sections 112(d), 112( c)(3) and 112(k) of the CAA to regul ate all existing area source CI engines. The EPA did not find it appropriate to estab lish a category for remote s ources at that time and finalized standards to regulate existing stationary CI engines located at area sources on a nationwide basis. The EPA believes that the CAA provides the Agen cy with the authority to regulate CI engines at
area sources nationwide and the EPA has not contemplated reconsideri ng this decision for the current
RICE amendments based on a lack of sufficient reasons from public comm enters to justify revisiting this
issue. The rule already requires maintenance practices fo r a substantial portion of existing stationary CI engines at area sources, i.e., existing stationary CI engines less than or equal to 300 HP and existing emergency CI engines. Existing stat ionary CI engines less than or e qual to 300 HP represent close to 75 percent of CI engines at area sources. 61 Existing emergency CI engine s represent 80 percent of all stationary CI engines. Therefore, in total, more than 540,000 existi ng CI engines, or more than 90 percent of CI engines at area sources are currently subject to management practices under the rule. The technology needed to meet the emission standa rds required for the relatively small portion of remaining existing CI engines at area sources is DOC combined with OCV. Both technologies have been proven effective on diesel engi nes for decades and are clearly av ailable. The EPA has previously evaluated the cost of these systems and determined that the emission re ductions that would be achieved by the combined use of these two controls would outweigh the costs for non- emergency engines above
300 HP. 62 Therefore, the Agency disagrees with commenter 1056 that controls are costly for this group of engines. The EPA believes it is appropriate to require such controls on this group of CI engines, in both well populated and sparsely populated areas, becau se contrary to the commenter’s claim, there are

61 Memorandum from Bradley Nelson, EC/R to Melanie King, EPA. Impacts Associated with NESHAP for Existing Stationary CI RICE. February 17, 2010. EPA-HQ-OAR-2008-0708-0329. 62 Memorandum from Bradley Nelson and Tanya Parise, EC/R to Melanie King, EPA. MACT Floor Determination for Existing Stationary Non-Emergency CI RICE Less Than 100 HP and Existing Stationary Emergency CI RICE Located atMajor Sources and GACT for Existing Stationary CI RICE Located at Area Sources. February 15, 2010. EPA-HQ-OAR2008-0708-0327.223 health based benefits associated with PM 2.5 , which were presented in the 2010 final rule (75 FR 9670).
More information on the EPA’s deter mination and the cost of these dies el controls can be found in the
docket. 63,64 The cost per ton of HAP rem oved for non-emergency engines that operate for long periods of time is reasonable, using an annual operating scenario of 1,000 hrs/yr. Engines operating more frequently than 1,000 hrs/yr would have a more favorable cost per ton and HAP emissions are significantly reduced via DOC and OC V. A 300 HP diesel engine opera ting for 1,000 hrs/yr with these
controls would see a HAP reducti on of at least 0.01 tpy or about 22 lbs/yr. A 500 HP and a 1,000 HP engine would reduce their HAP emissions by 37 and 75 lbs/yr, respectively. If the engine operates more frequently, for instance, 4,380 hrs/yr, HAP reductions w ould be close to 100 lbs/yr for a 300 HP engine and 164 and 328 lbs/yr for a 500 HP and 1,000 HP engi ne, respectively. The PM reductions from a 500 HP engine operating for 1,000 hrs/yr would be 105 lbs/yr and from a 1,000 HP engine 210 lbs/yr. The VOC reductions would be around 1, 000 lbs/yr from a 500 HP engine operating for 1,000 hrs/yr and more than 2,000 lbs/yr from a 1,000 HP engine. Lastly, as commenters 1076, 1101 and 1140 discusse d extensively in their comments on these proposed amendments and summarized in comment 1.2.13 of this RTC document, diesel emissions are hazardous and lead to wide range of health issues. Establishing a remote/sparsely populate area category for this group of engines, similar to what was done for certain large existi ng non-emergency SI engines is not appropriate. Therefore, the Agency maintains th e previous decision that diesel oxidation catalyst
controls in combination with OCV on existing non-emergency stationary diesel engines above 300 HP at all area sources is feasible and justified and is nece ssary to protect public health and the environment in
all areas.



### 6.3 Offshore Sources

6.3.1 Comment : A few commenters (1004, 1020, 1071, 1105, 1145, 1464, 1465, and 1467) asked that stationary non-emergency CI engine s greater than 500 HP located at offshore facilities be subject to maintenance practices instead of emission limits. Commenters 1004, 1105 and 1464 said that offshore stationary CI engines should also be included in the definition of a remo te stationary engine and that the

63 Memorandum from Bradley Nelson, EC/R to Melanie King, EPA. MACT Floor and MACT Determination for ExistingStationary Non-Emergency CI RICE Greater Than or Equal to 100 HP Located at Major Sources. February 15, 2010. EPAHQ-OAR-2008-0708-0332. 64 Memorandum from Bradley Nelson and Tanya Parise, EC/R Incorporated to Melanie King, USEPA, Cost per Ton of HAP Reduced for Existing Stationary Compression Ignition (CI) Reciprocating Internal Combustion Engines (RICE). February 11, 2010. EPA-HQ-OAR-2008-0708-0290.224 maintenance-based management practi ces that apply to remote stationa ry SI engines should also apply to offshore stationary CI engines in areas remote from human activity.
Several of the commenters indicated that there are weight and space constraints, and accessibility to offshore platforms that limit th e ability to install controls and c onduct performance testing of offshore engines. Commenters also stated that there would be minimal impact from the emissions of these sources because of the significantly lower HAP emission ex posure and effect on human health from these offshore sources compared to urban areas, and for these reasons argue d for maintenance-based requirements. The regulatory burden is substantial and the commenter (1105) also said that most platforms are far from shore and su bstantially greater than the onshor e 1⁄4 mile criteria. The commenter (1020) added that potential health impacts resulti ng from CI engines located on remote offshore facilities is no greater than the risk posed by re mote SI engines requiring management practices. The commenter (1071) explained that the potential hea lth impacts from CI engines on remote offshore facilities would be no greater than the risk posed by remote SI engines that the EPA is proposing management practices for. The commenter (1020) urged the EPA to consistently apply regulatory compliance requirements for SI and CI non-emergency engines located at remote areas. The commenter (1020) provided additional information on the feasibility and costs for add-on cont rols to meet emissions limits for mobile offshore drilling units and exploratory drilling rigs. In support of its position, commenter 1467 offered the following arguments: 1. It is impossible for offshore industry vessels to obtain marine engines that simultaneously
meet both the International Mariti me Organization (IMO) requirements and the EPA’s requirements for non-marine engines. The commenter (1467) included an attachment (Attachment 1 to the commenter (1467) letter) that outlined IMO/other requirements a nd how the application of the cited requirements affects the means by which the stationary RICE NESH AP can be met. In summation, they provide that:

 The engine original engine manufacturer (OEM ) will not certify an engine to IMO and EPA
standards and that standards ofte n differ from state to state and ar e considerably more expensive.

 The IMO has not yet approved a pr actical method for m easuring PM and as such will not set a limit for something it cannot measure.

 Existing IMO Maritime Safety Committee-645 guidelines stipulate active redundancy for station-keeping requirements, resu lting in multiple engines having to be kept online at low loads nearly all the time. 2. Maintenance systems imposed on offshore drilling vessels are well maintained and documented and the commenter (1467) believes that th ey exceed the management practices proposed by225 the EPA for SI engines and those cu rrently required in the rule for smaller CI engines. The commenter (1467) provided an attachment (Atta chment 2 to the comment (1467) le tter) that presented offshore maintenance system practices based on OEM input. The specific exam ple provided includes maintenance plans generally followed for good operati on of diesel engines where twice daily logs of running conditions are mandated by class are followed a nd engine lubrication oils are analyzed every 30 days by an oil analysis company for specified properties.
3. Installation of a DOC is an enormous undert aking that could require extensive structural modifications, development of new maintenance re quirements, increased safety procedures and hazardous material handling plans that ultimately would not seem to ba lance out the small gain achieved in the reduction of CO emissions. The commenter pr ovided two attachments (Attachments 3 and 4 to the comment letter). Attachment 3 provi ded information regarding the instillation of a DOC and the reasons why it is considered a major project where the engi ne rooms would need to be shutdown during the installation. The commenter (1467) also provided that a full engineering survey would be required to
finalize costs and downtime. Attachment 4 indicate d that the predominant engine used for main generating units on offshore drilling platforms are large bore, medium speed diesel engines. The commenter (1467) believes, based on an analysis pe rformed, that CI RICE, especially at the sizes commonly found offshore, are not a large emitter of CO and the reduction of CO by use of a DOC is not a cost effective proposition given the safety and size constraints encountered offshore. In addition, the commenter (1071) compared the CO emissions from 4-stroke SI engines to CI engines and said that requiring management practi ces on remote CI engines above 500 HP would not have a significant impact on overall CO emission levels on sources regulated under the rule. Additionally, the decrease in HAP re ductions from exempting large CI engines in remote areas versus
the loss in HAP reductions from SI engines being proposed to be exempt is substantially lower, the commenter (1071) said. The commenter ( 1071) also said that it is not co st-effective to apply controls to these engines and perform the testing requirement s these engines are subject to under the rule. According the commenter (1071), ther e are additional costs involved in retrofitting oxidation catalyst controls on stationary engines that are offshore, and also argued as commenter 1105 did, the technical challenges related to the installa tion of oxidation catalyst on engines at offshore facilities, including weight and space constraints. The commenter (1071) sa id that offshore facilitie s are subject to weight and space constraints to ensure that the facility meets stability and buoyancy requirements for safety
reasons. Offshore facilities are also designed and built to maximize space and additional space is often not readily available to make re trofits, the commenter (1071) said. Adding more weight could require226 structural changes, which is one element that wa s not included in the EPA’s cost analysis, the commenter (1071) added. The commenter (1071) provi ded a cost example for a 6,610 HP engine and
showed the various cost elements , arriving at a total cost of $389,557 for an oxidation catalyst with annual operating costs of $71,697, and estimated the cost per ton of HAP reduced at $289,685. The commenter (1071) cited to the cost per ton of non -emergency engines between 100 and 300 HP that the EPA calculated at $265,000 and where the EPA stated “although add-on cont rols are technically feasible for these engines located at area sources, control co sts are high and EPA believe s that it is possible to achieve reasonable controls using management practi ces.” The commenter (1071) said that the cost per ton it has calculated for its sources is higher and ther efore believes based on that same rationale that the EPA made for 100 to 300 HP non-emergency CI engines that management practices should also apply to CI engines above 500 HP at offshore platforms and exploratory drilling rigs. One commenter (1020) submitted extensive co mments to support thei r claim that CI nonemergency engines with rated capacity greater th an 300 HP located at offshore sources should be allowed to demonstrate compliance with the RI CE MACT by meeting the management practice standards similar to that of CI non-emergency engines with rated capacity 300 HP or less. The commenter (1020) said that the same reasonable st akeholder concerns apply to both engine groups. According to the commenter (1020), Outer Continental Shelf (OCS) facilities qualify as remote sources according to the criteria specified in §63.6675. The comme nter (1020) said that most of the remote offshore CI engines of concern are located in equa lly, if not more, remote locations. The commenter (1020) added that the basis for EPA’s proposal to exempt existing stationary non-emergency CI RICE greater than 300 HP located at area sources in Al aska not accessible by th e FAHS from meeting the
numerical CO emission limitations should also apply to CI non-emer gency engines at OCS offshore facilities. The commenter (1020) de scribed several issues related to conducting performance tests at offshore facilities such as scheduling and cost challe nges related to lack of qualified testing companies and difficulty of scheduling tests during high load operations, which are not typical. The commenter (1020) concluded that costs associated with emissi on controls, testing, and m onitoring requirements for CI engines would also be unreasonable when co mpared to the HAP emission reductions achieved considering that the CI engines are located in the same sparsely populated ar eas as the SI engines. The commenter (1020) supports and agrees with commenter 1071 and their detailed review of
the EPA’s GACT discussion and annua lized cost equations. The comment er (1020) has similar concerns that the engines used as a basis for development of the RICE MACT emission standards did not have information representing large CI engines (9,000+ HP ) located at offshore facilities. Referencing the227 commenter 1071’s letter, the comment er (1020) said that when incl uding additional costs associated with technical challenges for installation and opera tion of controls to comply with the numerical emission standards for CI engines, the cost-effectiveness per ton of HAP reduced is greater than the
amount the EPA determined to not be cost-effectiv e for existing stationary CI non-emergency engines
between 100 HP and 300 HP located at area sources. On this basis, the commenter (1020) believes that GACT for existing stationary CI no n-emergency engines greater than 300 HP located at area sources on offshore facilities should be management practices, not add-on emission controls. One commenter (965) asserted that the rationale for allowing management practices for existing SI stationary RICE greater than 500 hp located in “remote areas” and the rationale behind broadening of th e definition of “remote sources in Alaska” to allow more existing non-emer gency CI engines to co mply with management practices in lieu of numerical standards also applies to non-emergency CI engines. The commenter argued that non-emergency CI engi nes at offshore facilities face similar concerns (e.g., offshore operations are often conducted seve ral miles from the shore where re liance on CI engines for supplying power is needed, subject to higher operating and co mpliance costs compared to onshore area sources). Commenters 1105 and 1145 recommended that the remote area definition should designate Cook Inlet, Alaska as remote engines. Commenter 1105 stat ed that the issue is that multiple rooms within a single owner/operator facility stru cture could be interpreted as separate “dwelling units” under the criteria in item (2)(i) of the definition of remo te stationary RICE in 63.6675.The commenter (1105) mentioned as an example platforms in inland waters su ch as those in Cook Inlet and within the coastal
areas of Louisiana and Alabama are not excluded unde r item (1) of the definition and may have living quarters that would inappropriately be considered multiple dwelli ngs/buildings. The commenter (1105) said that an office that houses a control room, meeti ng/lunch room, locker room, offices, etc. could also be considered a multip le dwelling building.

Response : The EPA agrees that manageme nt practices are more reasonable as GACT for existing nonemergency stationary CI RICE larger than 300 HP on vessels operating on the OCS because of the concerns regarding technical infeasibility and cost for emission controls. Th e EPA did not receive any public comments indicating that HAP emission cont rols were generally available and had been demonstrated for the large engines on the vessels. The EPA understands that vessels on the OCS can, among other things, face stri ct weight and space constraints, whic h limit control and testing options. Specifically, offshore vessels must adhere to weight and weight distribution limits for stability and buoyancy purposes necessary for safety reasons. The EPA did not intend to establish regulations for228 offshore mobile source vessels in its NESHAP rulemaking. At the tim e of the rulemaking, the EPA had not made any determination regarding whether e ngines on vessels operating in the OCS would be considered subject to the NESHAP and the EPA did not take into account such engines when promulgating the final NESHAP for existing engi nes. It is the EPA’s understanding that offshore operators are primarily concerned w ith the application of aftertreatme nt controls to their main power engines. These main power engines are several thousa nds of HP in size and on vessels there are usually at least four of these engines, several more in some cases on cert ain OCS vessels. The catalyst needed for these engines would be substantial. In addition to the space and weight limitations that offs hore facilities face, there are issues with catalyst fouling from the low-load engine operation of the engines of concer n. The United States Coast Guard requires that the main engines operate betw een 25 and 50 percent load, stipulated under IMO, according to offshore operators. 65 Because of low load operation of the main propulsion or power plant engines, the environment for effective catalyst function is not ideal and issues with engine backpressure are a concern. Lastly, there is minimal catalyst vendor experience with retrofitting these large engines on the OCS, plus limited testing companies available. In a letter from engine manufacturer Wartsila to Transocean, Wartsila indicates concerns with the a pplication of an oxidation catalyst for Transocean’s
vessel. 66 To comply with the requirements of the RICE NESHAP would not be co st effective, according to commenters, and the Agency agre es. It would not be reasonable to impose emission standards under
the rule that would necessitate the use of oxi dation catalyst or other technology to reduce HAP
emissions because of technical fe asibility and the costs would be prohibitive. For information on the analysis of impact of engines on OC S vessels, see the rulemaking docket 67 . The EPA agrees with commenters that engines on vessels on the OCS aff ected by the RICE NESHAP should be permitted to comply with the rule by following maintenance practices , similar to those require d for smaller (less than 300 HP) existing stationary diesel engines. The EPA reached out to operators 68 of these engines and asked for recommendations on management practices that would be appropriate for engines on offs hore vessels on the OCS. The EPA

65 Email from Douglas Robertson, Statoil to Melanie King, EPA. U.S. Coast Guard Requirements. June 6, 2012. EPA-HQOAR-2008-0708-1452. 66 Letter from Quentin Stewart, Wartsila North America Inc, to Douglas Robertson, Transocean Offshore Int. May 18, 2012. Attachment “Toioxycat 2 document” of EPA-HQ-OAR-2008-0708-1454. 67 Memorandum from Tanya Parise, EC/R, Incorporated to Melanie King, EPA. RICE NESHAP Reconsideration Final Amendments - Cost and Environmen tal Impacts. January 14, 2013. 68 Email from Donald Evans, Statoil to Melanie King, EPA. September 27, 2012. Maintenance Schedules for CI Engines at Offshore Locations. EPA-HQ-OAR-2008-0708-1450.229 discussed the maintenance schedule for larger CI engines with the Offshore Operators Committee (OOC) (commenter 1071 in this document), who initiall y indicated the maintenance items in Table 2d of the proposed rule are appropriate, but that main tenance schedules vary from manufacturer to manufacturer. Therefore, OOC re quested that the EPA require a dherence to the manufacturer’s specifications. However, the EPA cannot simply use th is non-specific requirement in the rule and leave the final decision up to manufacturers regarding proper maintenance of CI engines. With that understanding, the OOC indicated that the maintenan ce schedule in Table 2d of the proposed rule are also reasonable for engines on vesse ls in the OCS and are preferred over performance standards. The EPA also received input from the International A ssociation of Drilling Cont ractors who similarly indicated that the maintenance prac tices and intervals in Table 2d of the proposed rule are suitable for stationary CI engines on offshore drilling vessels on the OCS. 69 Consequently, the EPA is finalizing the following management practice requirements for exis ting non-emergency CI RI CE greater than 300 HP
on offshore vessels that ar e area sources of HAP: • Change oil every 1,000 hours of operation or a nnually, whichever comes first, except that sources can extend the period for changing the oil if the oil is part of an oil analysis program as discussed below and the condemning limits are not exceeded; • Inspect and clean air filters ev ery 750 hours of operation or annua lly, whichever comes first, and replace as necessary; • Inspect fuel filters and belts , if installed, every 750 hours of operation or annually, whichever comes first, and replace as necessary; and • Inspect all flexible hoses every 1,000 hours of op eration or annually, whichever comes first, and replace as necessary. These sources may use an oil analysis program in or der to extend the specified oil change requirement. The analysis program must at a minimum analyze the following three parameters: Total Base Number, viscosity and percent water content. The analysis must be conducted at the same frequencies specified for changing the engine oil. If the condemning lim its provided below are not exceeded, the engine owner or operator is not required to change the oil. If any of the condemning limits are exceeded, the engine owner or operator must change the oil within two business days or be fore continuing to use the engine, whichever is later. The condemning limits are as follows:
• Total Base Number is less than 30 percent of the Total Base Nu mber of the oil when new; or

69 Email from John Pertgen, International Association of Dri lling Contractors to Melanie King, EPA. November 11, 2012. Maintenance Schedules for CI Engines at Offshore Locations. EPA-HQ-OAR-2008-0708-1476.230 • viscosity of the oil has changed by more than 20 percent from the viscosity of the oil when new;

or • percent water content (by volume) is greater than 0.5. Owners and operators of these exis ting stationary CI RI CE must develop a maintenance plan that specifies how the management practices will be met a nd keep records to demonstrate that the required management practices are being met. The EPA has not accepted the suggestion of co mmenters to promulgate only management practices to marine stationary platforms. The co mments do not indicate that the engines used on these platforms are sufficiently disti nguished from other stationary engines to justify not requiring aftertreatment for such engines. Th e final NESHAP established in 2010 clearly applied to such engines. Consistent with previous Agen cy decisions, the EPA maintains th at add-on controls are feasible on offshore platforms. In spite of possible size and existing space constraints, control technology vendors have been able to put in aftertreatment, such as in mobile source engines for example. Further, several engines that would be located on platform s would under the RICE NESHAP already be subject to management practices, such as area source dies el engines that are less than or equal to 300 HP. Existing major source engines less th an or equal to 300 HP would also be subject to only maintenancebased requirements. It is expected that several engi nes on platforms might be of this size or smaller, such as for instance crane engine s, pumps, and other support-type e ngine equipment on platforms, and would not be subject to numerical aftertreatment-for cing standards. With that said, for engines that would necessitate aftertreatment, cat alyst vendors have indicated that catalysts can put in a silencer, which is typically part of engines on offshore platforms, therefore requiring no additional space. 70 The EPA has not accepted the suggestion to in clude Cook Inlet RICE in the definition of applicable waters because this would make the de finition inconsistent with that used by the DOT
definition of OCS waters . Also, the EPA notes that to the extent waters in the Cook Inlet are sufficiently non-remote and the platforms have a high enough num ber of buildings intende d for human occupancy such that they do not meet the criteria for remote e ngines under the final regulati ons, it is appropriate to have these engines treated as non-remote.

6.3.2 Comment : Two commenters (1463 and 1470) said that meeting current and future ozone NAAQS will require additional emissions reductions, not le ss and that relaxing requirements for RICE on OCS

70 Email from Melanie King, EPA to Tanya Parise, EC/R, Incorp orated. Information on Catalyst Installation. February 17, 2010. EPA-HQ-OAR-2008-0708-0333.231 sources is counter to their goals to decrease emi ssions that contribute to the formation ozone. The commenters urge the EPA not to include any relaxa tion or exemption for any RICE located at OCS sources. One commenter (1463) expre sses concern regarding requests to “relax” or “exempt” CI engines from the requirements which they would otherwise have to comply with as part of an OCS source. The commenter said that granting such requests would not adequately, and equally, protect the health and welfare of the public. The commenter reiterated th at EPA could, instead, consider possible limited exemptions for site-specific reasons , but it should not provide an acr oss the board exemption for RICE
that are not located in more dens ely populated areas. The co mmenter reports than a OCS source could be considered to be a remote location in the ocean, but the emissions from OCS s ources can be transported to onshore areas, some of which may be classified as non-attainment for ground level ozone or another pollutant, and should be controlled via proven control technologies. Another commenter (1470) representing several St ates (some of which who are represented by commenter 1463) on ozone transport issues disagrees with any exemption or relaxation from the current requirements for any RICE that operate as, or are lo cated at, an OCS source as such a relaxation may
hinder the member states’ efforts to attain and main tain the current and futu re ozone NAAQS. As the commenter stated it provided in previous comments, the commenter does not support an across the board exemption for RICE located in less densely populated areas, as emissions from OCS sources can be transported to densely populated onshore areas, some of which ma y be designated non-attainment for ozone or another pollutant. The commenter (1470) s upports its position by pointing out that the EPA recognized the impact of offshore emissions by taki ng steps to implement a coordinated strategy to address emissions from ships and ocean going vessels in Emission Control Areas (ECA). The commenter (1470) quoted the EPA fact sheets as stating:
“the U.S. coastline and much of the interior of the country will experience significant improvements in air quality due to reduce PM and ozone from ships complying with ECA standards. Coastal areas will experience the largest improvement s; however, significant improvements will extend
hundreds of miles inland to reach non-attainment areas. 71 ” Commenter 1470 stated that many areas in the OT R are designated as non-attainment for ozone. The commenter reports that many of the non-attainment areas are ne ar “wind energy areas” that are highly populated, in addition to othe r communities along the coasts of the rest of the contiguous United States. According to the commenter, in order to provide an adequate level of air quality to coastal

71 http://www.epa.gov/otaq/regs/nonro ad/marine/ci/420f10015.htm#3232 communities, the EPA must require more than “m anagement practices” to minimize emissions from RICE on OCS sources. Further, the commenter reports that they are only aware of one OCS source in the Atlantic Ocean and any new OCS source in the A tlantic Ocean would be a new source of emissions and should be required to control all sources of its e missions and costs of such control can and should be budgeted for within projects.

Response : The EPA acknowledges the concer ns about the emissions from these engines. However, the EPA must set the standards for these engines based on section 112 of the CAA, which indicates that the EPA may elect to promulgate standards or requireme nts for area sources ‘‘which provide for the use of generally available control technologie s or management practices . . . .” As discussed in the response to comment 6.3.1, the EPA received very convincing in formation from commenters indicating that there are significant concerns about th e technological infeasibility of retrofitting existing CI engines on offshore vessels on the OCS with oxidation cataly st control. Based on this information, the EPA determined that management practices are more reasonable as GACT for existing non-emergency stationary CI RICE larger than 300 HP on vessel s operating on the OCS and is finalizing management practices for these engines. The EPA did not recei ve any public comments indi cating that HAP emission controls were generally available and had been demonstrated for the large engines on the vessels.

6.3.3 Comment : One commenter (1461) stated that the main tenance practices for remote SI engines prescribe frequencies in which oil and oil filters must be replaced (the earlier of every 1,000 operating hours or annually), air cleaners must be inspect ed (the earlier of every 1,000 operating hours or annually) and hoses and belts must be inspected (t he earlier of every 500 operating hours or annually). Commenter 1461 requests that a similar set of mainte nance practices be utilized as the compliance demonstration for offshore CI engines. The comme nter explains that the proposed oil change out requirement under 40 CFR 63.6625(i) may not be feasible in certain operating scenarios in which taking an additional engine out-of-service could result in an unsafe working condition. Examples provided: 1. If more than one engine was flagged for oil ch ange at a time, potential issues could arise with available redundancy required for emergency situations making it infeasible to change out more than one engine within the two day time frame. 2. If an engine is off-line for maintenance th ereby limiting the availa ble engine redundancy in reserve for required operations or w eather conditions, it may not be feasib le to shut down another engine due to a failed oil analysis.233 3. If environmental conditions (loop current, high wi nd/sea state) require the use of all engines or a large portion of available engines such that an e ngine could not be remove d from standby operation for redundancy purposes.

4. If immediate repairs were on-going with a re lated auxiliary system, (e.g., Heat Exchangers, Pumps, Piping), this could limit available redundancy and directly interfere with shut down of a flagged engine for an oil change. The commenter (1461) requested that a safety exemption be provided with the proposed work practice standards to ensure that the RICE MA CT rule does not preclude offshore operators from providing a safe working environm ent while satisfying the requirement to minimize target HAP emissions from CI engines. The commenter’s (1461) opinion is that such an exemption should delay the timing of the oil change process until such time as a safe operating condition could be achieved that allows for completion of the oil change procedures.

Response : The EPA does not agree with the commenter that it would be appropriate to provide an exemption in the rule from performing the required ma nagement practices at the required intervals. The owner/operator of the engines should take their oper ational needs into account when planning how they will comply with the applicable requirements. If an owner/operator has special and unique operating situations that they believe justify an adjustment to the management practices in the rule, the EPA notes that owners/operators may work with state pe rmitting authorities pursu ant to 40 CFR subpart E (‘‘Approval of State Programs and Delegation of Federal Authorities’ ’) for approval of alternative management practices for their e ngines. Subpart E implements sec tion 112(l) of the CAA, which authorizes EPA to approve alternative state/lo cal/tribal HAP standards or programs when such requirements are demonstrated to be no less st ringent than EPA promulgated standards.

6.3.4 Comment : One commenter (1466) believes that it is appropriate to require any non-propulsion CI engines such as generators, cranes, and pumps on off-shore drilling vessels to meet the same requirements as land-based engines in the RICE NESHAP, including the numer ic emission limits. The
commenter states that section 328 of the CAA requires that for OCS so urces located within 25 miles of a State’s seaward boundary (an area which contains virtually all of their State’s (California) OCS oil and gas activity), the air pollution requirements that w ould be applicable if the source were located ...on
shore...” The commenter said that section 328 of the CAA is an important tool in helping to ensure that234 the air quality impacts of OCS sources are properly addressed and do not adversely impact onshore air quality and public health. The comme nter believes that, when off-s hore drilling vessels are an OCS source pursuant to the OCS Air Regulations, codified at 40 CFR part 55, the non-propulsion CI engines should be subject to the same NESHAP requireme nts as land-based stationary CI engines. Response : The EPA does not agree with the commenter that it cannot establish different requirements depending on the location of an engine. The EPA ha s established different requirements in other instances in the RICE NESHAP, fo r example existing CI engines at area sources in remote areas of Alaska. The EPA believes that it has appropriate ly determined GACT for existing CI engines on offshore vessels on the OCS to be management practi ces, for the reasons discussed in the response to comment 6.3.1. This decision does not change the fact that new non-propulsion engines would continue to be subject to other requirements, whether th ey be mobile source requirements or OCS source requirements like compliance to the NSPS.

6.3.5 Comment : One commenter (1469) surveyed its member companies regarding their experience with retrofitting Category 3 marine dies el engines with DOC and none of the companies had any direct experience installing DOC on these engines. According to the comme nter, several of the member companies did however have experience with the installation of DOC on Ca tegory 2 marine diesel engines (engines from 5 to 30 l/cyl), like those on ferry and tug boats, as well as on similar-sized engines used on locomotives. The commenter (1469) re ports that SCR systems have also been used extensively on these Category 2 marine diesel engi nes. The commenter (MECA) has issued a report
entitled “Case Studies of the Use of Exhaust Em ission Controls on Locomotives and Large Marine Diesel Engines (September 2009),” wh ich includes select case studies on the installation of DOC and/or SCR systems on large marine diesel engines. Th e report is available at the following website: www.meca.org/galleries/default-file/L oco%20Marine%20Case%Studies%20update%200909.pdf

. Generally, commenter 1469 believe s that the technological feas ibility of installing DOC on Category 3-type CI RICE on offshore drilling vessels is feasible and that issues regarding catalyst fouling have available engineering solutions (e.g., hi gh sulfur fuels contribute to plugging, consumption
of too much lube oil can contri bute to plugging). The commenter (1469) provided that the use of low sulfur fuels, reducing consumption of too much lube oil, increasing the substrate cell size (which is a specification that catalyst suppliers can easily ch ange in their designs; on MECA member company recommended a cell density of around 100 cpsi). The commenter (1469) also responded to concerns regarding the issue of a “yellow plume” due to the oxidation of nitrogen oxide (NO) to NO 2 . The commenter (1469) af firmed that a DOC will235 promote NO and O 2 to NO 2 , which can, in some cases cause the exhaust to look ye llow or brown. The commenter reports that this issue is not different fo r OCS sources that it is fo r land-based sources being retrofitted with DOC. According to the commenter ( 1469), one of their member companies found that a DOC designed for 70 percen t CO reduction is small enough that it does not significantly affect opacity. Commenter 1469 stated that, where NO 2 is a concern, the catalyst can be reformulated to virtually
eliminate NO 2 formation. The commenter (1469) referred to a report in support of their assertion that is being prepared by a member company that documents testing conducted and offered to submit the EPA a copy once it becomes available. The commenter (1469) also reported that an SCR system can also be
installed to reduce emissions of NO x . Commenter 1469 indicated that although offshore drilling vessels are remote, these drilling operations still employ on-site workers and personnel that would be exposed to diesel emissions if requirements are relaxed and pollutants such as NO x , PM and VOC can be transported over great distances, which can result in highe r pollution levels in areas far fro m where the pollutants originated.

Response : The EPA appreciates the info rmation submitted by the comme nter regarding experience retrofitting large marine diesel engines with oxi dation catalyst. The information submitted by the
commenter shows that there is no experience retrofitting large marine diesel engines with oxidation catalyst, which supports the conclusion discussed in the response to comment 6.3.1 that management practices rather than emission controls are GACT fo r these engines. The commenter indicates that an SCR system may be necessary to addr ess concerns about emissions of NO 2 , which would further
increase the cost of emission contro ls for these engines. However, NO 2 is not a listed hazardous air pollutant. The EPA acknowledges the c oncerns about emissions from thes e diesel engines, but believes it has appropriately set the standa rds for these engines based on the requirements of section 112 of the CAA, which require EPA to base the standards on contro ls that are generally available for these engines,
which the EPA has determined to be management practices.

6.3.6 Comment : One commenter (1468) commends the EPA fo r seeking means to apply the NESHAP and NSPS to the unique equipment and circumstances found on the OCS. The commenter is particularly interested in how the EPA distinguishes between OCS production operations where stationary sources are clearly involved and exploration/ delineation activities where stationa ry sources may not be involved. The commenter (1468) disagrees with the conclusi on by the EPA that mobile marine sources can become subject to the stationary source standards so lely as a result of the operation of 40 CFR part 55236 (because they are on or attached to an OCS source). The commenter ( 1468) provides that the definitions for nonroad engine under 40 CFR 1068.3 and definition of marine engine under 40 CFR 94.2 in support of their position. According to the commenter, the EPA applied these definitions in a 2007 memorandum dealing specifically with engines on a jack-up rig: 72
40 CFR Part 94 defines a “marine vessel” as having the meaning given in 1 USC 3. The definition in 1 USC 3 very broadly includes ever y craft capable of being used as a means of transportation on water. In this respect, EPA has prev iously determined that the definition of "marine vessel" includes such craft as ocean-going and inland wa terway barges. In keepi ng with this logic, EPA would also generally consider a jackup rig to be c overed by this definition of “marine vessel” since it is basically a barge and is used for transportation of drilling equipment on water. Thus, the rig and any compression ignition engine insta lled on the rig would be subject to Part 94 according to the applicability provisions found in §94.1 (see http://www.epa.gov/otaq /cert/dearmfr/cisd06012.pdf for guidance on appropriate certification requirements for portable auxiliary engines). I underline “generally” in the above sentence because there's a potential exception to this statement. Although, as you state, jackup rigs typically remain in one locati on for about 6 months and are then repositioned, if it ever became the case that a rig remained at a location for more than 12 consecutive months, a compression ignition engine installe d on the rig could be considered a stationary engine and thereby subject to 40 CFR part 60, subpart IIII, according to the applicability provisions found in 40 CFR 60.4200. In summary, the commenter (1468) believes that:

 RICE used in oil and gas exploration/delineation activities be deemed a stationary source subject to the NESHAP or the NSPS for engines only if th ey are employed in a single location for more
than 12 months and that this 12-month standard be explicitly stated in the final NESHAP for
RICE

 Oil and gas exploration and delin eation activities should be viewed distinctly by the EPA when considering application of stationary sour ce standards under 40 CFR part 55. The commenter asserts that engines used for exploration and delineation are on mobile equipment (i.e., marine vessels) that typically does not stay at a singl e location for 12 months or more. The commenter believes that these engines should be treated differently than engines that are bolted into place and can be considered stationary. In the comme nters’ opinion, for thes e engines (engines that

72 Memorandum from Justin G. Greuel, Heavy Duty & Nonroad Engine Group, Compliance & Innovative Strategies Division, Office of Transportation & Air Quality to Carl Thiele of Caterpillar, August 22, 2007.237 are bolted into place and at a single location for 12 months or more), it is appropriate to require similar maintenance practices as thos e proposed for remote SI engines.

 Marine engines (as defined by 40 CFR 94.2), whet her on an OCS source or not, that are at a single location for less than 12 months are not subject to the NSPS or NESHAP stationary
source because NSPS and NESHAP do not apply to nonroad engines (defined at 40 CFR 1068.30), marine vessel engines are nonroad engines, and neither section 328 of the CAA nor 40 CFR part 55 changes the nonroad engine status of marine vessel engines located on or attached to OCS sources. The commenter reports that the EAB appears to share their view that Part 55 does not require nonroad engines in the OCS to be treated differently than nonroad engines
elsewhere 73 : Specifically, simply because EPA has identified an OCS source as regulated under the CAA, and subject to the requirements of pa rt 55, does not mean it can avoid the next necessary step of determining the scope of the “stationary source” for PSD purposes. This interpretation is further suppor ted by applicable legislativ e history. One of Congress’ purposes in giving EPA authority to regulat e air pollution sources on the OCS was to require similar treatment of onshore and offshore po llution emitting activities by “applying the same air quality protection require ments as would apply if the OCS sources were located within the corresponding onshor e area.” S. Rep. No. 101- 228, at 77 (1989). The regulatory definition of “stationary source ” establishes the basic unit of analysis – i.e., what emissions units must be included as part of a single source – for determining whether the PSD program’s min imum PTE thresholds are ex ceeded and a PSD permit is required. There is nothing in the plain langua ge of the statute that indicates Congress intended to replace the unit of analysis used for determining onshore applicability of PSD permitting with the new con cept of “OCS source” when de termining PSD applicability offshore. To the contrary, the statute dem onstrates that where Congress intended the “OCS source” to be the unit of analysis fo r determining applicab ility of a permitting program it did so expressly. [emphasis added]

Response : The RICE NESHAP does not on its face apply to mobile sources, including marine vessels. However, the regulations applicable to sources on the OCS, codified at 40 CFR part 55, specify that

73 September 14, 2007 Environmental Appeals Board decision in re: Shell Offshore Inc., Kulluk Drilling Unit and Fronteir Discoverer Drilling Unit; OCS Appeal Nos. 07-01 & 07-02, pp 31-34238 vessels are OCS sources when they are (1) permanently or temporarily attached to the seabed and erected thereon and used for the purpose of explor ing, developing or producing resources there from, within the meaning of section 4(a)(1) of the OCS La nds Act (43 U.S.C. §1331, et seq.); or (2) physically attached to an OCS facility, in which case only the stationary sources aspects of the vessels will be regulated. 40 CFR 55.2. The EPA does not agree with the commenter that marine engines cannot be subject to stationary source requirements such as NESHAP. The exclusion of nonroad engines from the definition of “stationary reciprocating internal co mbustion engine” in the RI CE NESHAP is overridden by the regulations in 40 CFR part 55 that specify the conditions under which vessels are subject to stationary source requirements. The EPA previously responded to the issue raised by this commenter in the response to comment F.4 in the “Response to Co mments for Outer Continen tal Shelf Prevention of Significant Deterioration Permit No. R10OCS/PSD-A K-09-01, Shell Gulf of Mexico Inc. Frontier Discoverer Drillship, Chukchi S ea Exploration Drilling Program. United States Environmental Protection Agency, Region 10, Seattle, Washington.”

6.3.7 Comment : One commenter (933) requested clarifica tion on the “remote offshore” designation for SI engines and asked if this would apply to an offs hore oil platform in either the OCS or state waters. The commenter (933) read the provision as a pplying to an OCS offs hore oil platform.

Response : Per the definition of remote stationary RI CE in the final rule at §63.6675 of the RICE NESHAP the remote offshore designation is classified as an offshore area that is beyond the line of ordinary low water along that portion of the coast of th e United States that is in direct contact with the open seas and beyond the line marking the seaward limit of inland waters.

6.3.8 Comment : One commenter (1004) asked that owners and operators of OCS engines be exempt from having to evaluate their engi ne status every 12 months base d on the lack of potential human
habitation at OCS locations.

Response : The rule does not require an annual reevalua tion of status for th e OCS vessel engines.

6.3.9 Comment : Two commenters (1461 and 1462) supported th e EPA’s consideration of additional information presented during the co mment period and the implementati on of maintenance practices to reduce emissions of target HAP from CI engines located at offshore facilities.239 Response : No response is needed

6.3.10 Comment : One commenter (1462) indicated that it agrees in concept with the comments raised in support of extending the same manage ment practice standards to CI e ngines located on offshore vessels that the EPA has proposed for SI engines located in remote areas. Commenter 1462 said that a similar extension is appropriate and should also apply to CI diesel engines that may be used during the construction phase of Offshore Wind (OSW) pr ojects or for periodic monitoring purposes. The commenter provides that diesel engines that may be used at OSW faciliti es would face similar infrastructure, environmental and operational resource constraints and challenges as engines located on offshore vessels. The commenter reports that these e ngines would be used in remote areas well offshore in virtually unpopulated or at best sparsely populated areas during OSW construction or maintenance. The commenter asserts that the potential health imp acts resulting from diesel CI engines used at OSW facilities would pose no greater risk than the risk s posed by remote SI engines requiring management practices and requests that the EPA incorporate a si milar subcategorization for CI engines used at remote locations including offshore vessels and OSW facilities as the EPA has recently proposed for SI engines located in remote areas.

Response : The commenter did not provide any detailed data or information similar to that provided for engines on offshore vessels to show that the instal lation of emission controls would be technically infeasible for diesel engines used on OSW projec ts. Therefore, the EPA does not agree with the commenter that it would be appropria te to require management practices rather than emission limits for these engines.240 

### 7.0 Stationary Agricultural RICE in San Joaquin Valley (Tier 1

‐ 3 Relief)

7.1 Comment : A number of commenters (909, 938, 1004, 1038, 1043, 1052, 1056, and 1060) supported the proposal to include relief for Tier 1, Tier 2, a nd Tier 3 certified engines. Commenter 938 expressed specific support for changes made to address conflicts with existing rules and regulations in California, such as the San Joaquin Valley Air Pollution Cont rol District’s Rule 4702 – Internal Combustion Engines, and the Statewide ATCM for stationary CI engines. The commenter (938) stated that, because of the EPA’s proposed changes to the rule, the time frames for complying with the CA rules, which it had already planned for, are able to be maintained. The commenter ( 938) said that the proposed changes will simplify the regulatory landscape for agricultural s ources that are also pla nning for other regulations
to reduce VOC emissions from pesticides and to reduce NO x emissions from hea vy duty diesel trucks and farm equipment.

Response : No response is needed.

7.2 Comment : One commenter (1030) requested that a stat ionary CI engine, which is certified by the manufacturer as meeting a CO emission standard of 3.5 g/KW-hr or less (the 40 CFR part 89 standard for CO) should be exempt from additional requi rements under 40 CFR part, 63 subpart ZZZZ similarly to those engines that are Tier 2 certified that are exempt. The commenter (1030) is of the opinion that since CO is a surrogate for HAP fo r CI engines, an engine that canmeet 3.5 g/KW-hr should not require additional regulation regardless of whether the NO x , HC, or PM emissions meet the Tier 2 or 3 standards, as appropriate.

Response : The EPA disagrees and does not believe that it is appropriate to incorporate the commenter’s request into the final rule to allow any engine mee ting a CO standard of 3.5 g/KW-hr to be exempt from the RICE NESHAP. The proposed amendment was to allow existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are subject to state and locally enforceable requirements requiring replacement of the engine by June 1, 2018, to meet manage ment practices under the RICE NESHAP from the May 3, 2013, compliance date until January 1, 2015, or 12 y ears after installation date, but not later than June 1, 2018. In other words, the proposed allowance was limited to engines that were scheduled to be replaced shortly after the RI CE NESHAP requirements go into effect. Also, these engines are not exempt from the RICE NESHAP, but are allowed to meet management practices as241 opposed to emission standards in certain cases. The pur pose of this allowance is to address a specific concern regarding the interaction of the NESHAP with certain rules for agricultural engines in the San Joaquin Valley in California. Because owners and operators of certain engines would have to install
controls in order to meet the RICE NESHAP and would also be forced by state and local rules to replace their engines shortly thereafter due to specifying th e replacement of engines under those rules, the RICE NESHAP requirement becomes redunda nt. In addition, the provision allowi ng engines certified to Tier 3 controls (and Tier 2 controls for engines above 560 KW to meet the requirement s for existing engines is designed to allow engines certified to the most stringent standards fo r CO, PM, NMHC and NO x in place at the time of the NSPS for new engines to also meet the requireme nts for existing engines installed during the short time period when those st andards had come into pl ace but stationary engines were still considered existing engi nes. As these standards are for se veral pollutants in addition to CO and as the regulations for other pollutants (incl uding NMHC and PM, which also are related to HAP control) may be more stringent, or require further control, than those for CO, the EPA does not believe it is appropriate to allow complian ce solely with the CO standard to be sufficient for meeting the requirement.242 

### 8.0 Compliance Date

8.1 Comment : A number of commenters (875, 877, 916, 939, 941, 942, 943, 945, 948, 951, 952, 967, 968, 970, 974, 975, 976, 977, 978, 979, 984, 985, 986, 996, 997, 999, 1002, 1003, 1007, 1015, 1017, 1018, 1019, 1022, 1024, 1027, 1029, 1031, 1034, 1035, 1036, 1038, 1039, 1040, 1041, 1043, 1045, 1049, 1051, 1055, 1056, 1060, 1061, 1073, 1074, 1075, 1079, 1082, 1083, 1095, 1097, 1105, 1111, 1113, 1119, 1127, 1128, 1130, 1136, 1138, 1146, 1148, 1149, 1150, 1151, 1169, 1315, 1317, 1318, 1319, 1326, and 1445) are concerned with the compliance da tes in the rule, especially if the proposed
revisions are not finalized.
Several commenters asked that the EPA extend the compliance dates in the rule because the current timing of the rule does not allow enough time to comply with the rule. Some commenters (1060, 1073, 1083 and 1097) requested a 1-year extension from the current May 3, 2013 deadline. Several commenters (877, 974, 1031 and 1130) said that the comp liance date should be extended to May 3, 2014 to give sources in Alaska time to design, fund, orde r and install controls, monitoring systems and other equipment and to avoid winter c onstruction. Alternatively, if the ru le does not retain the remote definition or makes significant revisions, extend th e compliance date by 22 months after signature, Alaska commenters said. If the final rule significan tly changes the provisions that were proposed, two commenters (1105 and 1136) urged the EPA to extend th e initial compliance date to October 2014 or by 22 months after the final rule is signed. One commenter (877) stated that the EPA’s final definition of
“remote areas of Alaska” will determine whether or not their facilities are required to retrofit their engines with expensive customized equipment. Th e commenter (877) is concerned about not having sufficient time to design, fund, order, and inst all this new equipment by the May 3, 2013 compliance
deadline if the final definition for “remote area of Alaska” excludes any of their RICE units. The commenter (877) stated that if the EPA issues the fi nal rule as late as Dece mber 14, 2012, they would be
forced to conduct construction activ ities during Kodiak’s extreme wint er season, which typically runs through May. The commenter (877) recommended that to avoid an unreasonable and unsafe situation in
Kodiak and other remote Alaskan co mmunities, the EPA should offer spec ial consideration to all of the
Alaskan area sources not connected to the Alaska Railbelt Grid by extending the compliance deadline to May 3, 2014. Similarly, commenter 1089 also urged the EPA to finalize the changes as proposed otherwise significant issues with the rule will remain. If for some reason the rule is not finalized in a substantially similar way as proposed, commenter 1089 noted that it w ould want to discuss with the EPA an extension243 to the current compliance dates in the rule to at least late 2014 or 2015. Commenter 916 said that without extending the compliance date the EPA is tr eating a subset of engines unfairly. Owners of engines subject to the rule have seve ral decisions to make in order to comply with the rule and with the final rule pending it creates uncertainty amongst aff ected stakeholders, the commenter (916) said. Not much time is provided from when the final rule co mes out and owners knowing what they will have to comply with until they have to comply with the rule, commenter 916 added. There is a provision allowing for extension requests, but it is time c onsuming and involved and does not solve the problem, the commenter (916) said who therefore requested the compliance date be extended until November 3, 2014. Commenter 1075 said that the EPA should give sp ecial consideration to owners/operators of affected engines and suggested that a temporar y amnesty period from enforcement action could be provided from the time the final rule is published to a year after. Commenter 1075 recommended that
affected sources be free from enfo rcement action if a deviation occu rs during this amnesty period as long as the source comes into compliance by th e end of the amnesty period. Commenters 975, 977, 979, 996, 997, 1003, 1019, 1034, 1035, 1061, 1111, 1138, 1150, 1169, 1315, 1317, 1318, 1319, and 1326 requested a 6-month extension afte r the final rule is published in order for sources to comply. Commenters 976, 985, 986, 999, 1018, and 1029 recommended that the CI and SI compliance dates be aligned and set at the SI compliance date of Octo ber 19, 2013 for all engines to provide enough time to reach compliance and would have the added benefit of lessening confusion by making the compliance
deadlines consistent. Some commenters (978, 981, 984, 1027 and 1055) said that it is more reasonable to require compliance by the fall of 2014. In the event the proposed requirements are not finalized in terms of the relief provided to existing non-emergency 4-stroke SI engines above 500 HP in remote areas, commenter 1095 requested that the EPA provide a full 3 years from the date the rule is final in order to reach compliance. The commenter (1082) suggested that the EPA s hould provide a 17-month extension to the RICE rule compliance deadline to help bypass the winter a nd summer peak times, give small utilities adequate time to comply with the new requirements, and give utilities adequate time to follow their city budgeting process. One commenter (1104) concurred that the compliance dates be exte nded past the normal fall outage period in 2014 – for a period of approximately 17 months total – in light of these concerns. In addition, the commenter (1104) proposed that both the CI and SI compliance dates be aligned so that the date for SI compliance would be the same for CI compliance (October 19, 2014). Commenter (1104) further proposed that the EPA reta in the additional one-year for comp liance, which could be requested244 by units on a case-by-case basis, and believes that this 17-month extension s hould reduce the need for the EPA to evaluate case-by-case extension requests. One commenter (1148) stated that the compliance date needs to be adjusted since the final rule is not expected until the end of December 2012. The co mmenter (1148) asserted th at it is unrealistic to expect that vendors could travel to the many hundreds of locations across the United States in the winter of 2013 in order to have the equipment calibra ted and running by May 2013. Commenter (1148) stated
vendors and the small utilities should have until the fall of 2014 to fully retrofit their RICE units since those same RICE units might be needed during the time when the region that they operate in is impacted by compliance with EPA’s EGU mercur y MACT or MATS regulations. One commenter (1067) said that the Agency should allow a transition period under May 31, 2016, in order to give owners/operators and demand resource aggregators suffic ient time to install emissions controls on their engines if they wish to participate in power markets. This provision would indicate the expectations of owners/ operators who wish to bid their units into capacity markets who rely on an exemption in the RICE NESHAP, the commenter (1067) said. Also, the availability of these units would assist RTO, ISO and othe r balancing authorities during th is temporary transition period. Some commenters (939, 943, 967, 968, 1002,1036, 1038, 1074, 1113 and 1445) said that it is essential that the EPA consider extending the compliance deadline for this rule as a result of the inordinate delay in finalizing important and crucia l details during the recons ideration process. Two commenters (968 and 1002) are concer ned that municipalities and agri cultural irrigation operations will not have enough time to adjust for major changes in th e draft reconsideration such as allowing the use of CI-RICE for peak shaving. Commenter 968 said that m unicipalities will not know the final details of the regulatory matrix until the end of the year with only 4 1⁄2 months be fore they have to be in compliance by May 3, 2012. Two commenters (968 and 1017) described the complexity of purchasing process at the municipal level. These two commenters (968 and 1017) cited various concerns including:

 Regulatory issues that must be resolved with th e state and coordinating with power suppliers or their joint action agency

 Design, testing and implementati on (including making phys ical modifications to the power plant building) issues that preclude m eeting such a short time line

 The need to educate city councils and decision makers about the need for costly equipment

 Evaluating whether limited funds might be better used in investing in a new and presumably more efficient generating unit.245 Other commenters (1017 and 1051) voiced simila r concerns about the nearness of the May 2013 deadline and the impact on smaller plants and sma ll communities in particular. According to one commenter (1017), while larger plants are moving forw ard with the installation of catalysts, smaller plants will need additional time to determine whether to seek emergency designation and gain compliance. The commenter (1017) added that municipal utilities that opt to designate their RICE units as “emergency” should be able to comply with a May 2013 deadline, as the installation of oxidation catalysts would not be required. However, the comment er (1017) said that members that decide they cannot operate under emergency designation will n eed more time. The commenter (1017) recommended an 18-month delay in the compliance deadline. One commenter (968) said that the EPA s hould extend the deadline by the 16 months that communities have been in limbo about the regulatory de tails of this rule, to th is point, or that the extension should cover the entire period from Decem ber of 2010 when reconsideration was announced until December of 2012 when the final rule is pub lished. The commenter (968) added that, while the existing rule gives individual states with delegated authority the opport unity to grant extensions, this option is not as forcefully pres ented as the recent MATS rule th at was very forceful in its encouragement to the states to issue extensions to municipal utilities that we re struggling to meet the relatively short time-frames in the rule because of legally imposed requirements. Two commenters (948 and 968) requested that the Agency use forceful language similar to that used and promulgated in the MATS rule to make it clear to state regulators th at extensions are appropriate and expected by the Agency. Some commenters (1036, 1045, 1074, 1151 and 1445) said that it is more reasonable to give
vendors and the small utilities until the fall of 2014 to fully retrofit th eir RICE units since those same RICE units might be needed during the time when the region that they operate in is impacted by compliance with the EPA's EGU mercury MACT or MATS regul ations. The commenters (1045, 1074, 1151. 1445) said that some larger utilities with co al plants might be maki ng significant changes and have many baseload coal units offline or converting to gas, which could lead to more RICE units being called upon during the transition time of 2015-2017. Commenter 1036 added that such an extension would bypass the first summer and winter peak dema nd periods. One commenter (967) requested that the EPA extend the RICE NESHAP compliance date to be at least 6 months after the date the EPA’s final action is published in the Federal Register to provide affected facilit ies with adequate time for review and compliance.246 Two commenters (939 and 943) requested that th e compliance date for RICE be extended by one full calendar year to allow unit owners sufficient ti me to make retrofits. The commenter asserted that requiring each facility to individually petition for additional time is cumbersome, inefficient and

unnecessary. One commenter (1038) said that the regulated community should be provided an additional 3 years to come into compliance. Another commenter (1002) described two issues w ith relying on the 1-year compliance extension provisions. First, the commenter (1002) said that compliance extension requests must be submitted no less than 120 days before the compliance date, Janua ry 2013. The commenter (1002) said if the rule is finalized in December 2012, sources have less than 1 month to determine and develop plans for compliance. Second, the commenter (1002) said, the EPA and state resources are not sufficiently prepared for the number of case-by-ca se extension requests that will be submitted by sources affected by this rulemaking. The commenter (1002) believes that a compliance extension of 1 year in the final rule would be more effective and reasonably attainable for affected sources. The commenter (1002) added that if the compliance date cannot be changed for all sources, at a minimum the EPA should extend the compliance date for area sources. Co mmenter 1036 said that at a minimu m, state administrative agencies charged with enforcement should be given discretion to grant expe dited approval of individual and group requests for 1-year extensions.

Response : Section 112(i)(3) of the CAA requires that comp liance for existing engines be “as expeditious as practicable, but in no event later than three years after the effective date of such standard...” The compliance date for existing stationary engines is al ready set at 3 years following the effective date of the standards. As the EPA did not propose any requireme nts that are more stringe nt than those finalized in 2010, regulated parties that would be regulated under either the final rules pr omulgated in 2010 or the proposed revisions have had sufficie nt time to prepare for compliance. Regarding provisions that were subject to change as a result of the proposal, for the most part, the EPA is finalizing provisions as proposed and therefore in those cases the existing compliance dates will remain. The EPA believes the existing compliance dates are appropriate and justifie d in those scenarios where there is no difference between the proposed and final rule, because the new re quirements are as or less stringent than the prior requirements and reduce the compliance burden for many sources. Regulated parties have had sufficient time to prepare to meet such requirements.247 For instance, the EPA is finalizing the proposal to allow THC to be used as an alternative to demonstrating compliance with the formaldehyde pe rcent reduction requirement for existing and new 4SRB engines above 500 HP at majo r sources. Further, the EPA is finalizing amendments to the requirements that apply to existi ng stationary non-emergency 4-stroke SI RICE greater than 500 HP
located at area sources of HAP emi ssions, which had been subject to a numerical emission standard and regular monitoring and testing re quirements under the final rule published in 2010, and which under the final rule are subject to either ma nagement practices, for engines in remote areas, or to an equipment standard and less burdensome monitoring requirement s and less onerous and more flexible testing requirements, for engines not located in remote areas. The EPA is also promulgating regulatory relief for certain existing CI engines that are already cer tified to CAA standards and management practices
instead of emission standards for CI engines above 300 HP on OCS vessel s. In all these cases, the final rule establishes regulatory relief and will lessen the compliance burde n and a compliance extension is not necessary. In those situations where the EPA is not fina lizing revisions as proposed, the EPA is providing additional time to demonstrate compliance. The EPA is finalizing the allowance for stationary engines operating as part of emergency DR allowing a total of 100 hrs/yr, including hour s spent for maintenance and testing, as proposed. However, th e final rule includes a requirement that stationary emergency CI RICE above 100 HP and a displacement of less than 30 l/cyl that operate or ar e contractually obligated to be available for more than 15 hrs/yr use ULSD fu el. Since this requirement is a new requirement that was not contemplated at proposal, owners and operators have until January 1, 2015, to start using
ULSD. In addition to the ULSD fuel requirement, owners and operators of these engines must report the dates and times the engines operated for emergency DR annually to the EPA, beginning with operation during the 2015 calendar year. Again, since the reporti ng requirement was not in the proposed rule, the EPA is delaying the start of this requirement. The EPA is adding these requirements beginning in January, 2015, rather than upon initial implementation of the NESHAP for exis ting engines in May or October of 2013, to provide sources with appropriate lead time to in stitute these new requirements and make any physical adjustments to engines and other fa cilities like tanks or other containment structures, as well as any needed adjustments to contracts and other business activities, that may be necessitated by these new requirements. The EPA believes that gi ving until January 2015 will give sources sufficient time to comply with the rule, and will also al low the EPA necessary time to implement the new reporting requirement.248 The EPA is not finalizing th e proposed temporary 50-hour allo wance for existing stationary emergency engines located at area sources engaged in peak shaving and other non-emergency use as part of a financial arrangement with another entity. Therefore, acknowledging the short time between this final rule and the existing compliance dates (May 3, 2013 for CI and October 19, 2013 for SI), the EPA is allowing existing stationary emergency engines located at ar ea sources to operate for this purpose until May 3, 2014. The EPA believes that it is a ppropriate to provide a compliance extension in this case to provide more time for sources that wish to engage in peak shaving until they can come into compliance with the applicable requirements for non-emergency engines. Owners and operators that wish to ask for more time to comply with standa rds based on the particular circumstances of their sources may still do so under the compliance extens ion provisions. While such provisions may be time consuming, it is appropriate that sources with particular issues be required to specify those conditions and request an extension, rather than EPA granting a blanket exemption not c ontemplated by the CAA.

8.2 Comment : One commenter (1134) does not believe th at the EPA should extend the compliance deadlines in the rule. It is the commenter’s (1134) opinion that owners of engines and DR aggregators have had plenty of time to develop compliance strategies for the 2010 rule. The commenter (1134) also reiterated that there is no reliability-related ju stification for extending the compliance deadline.

Response : As discussed in RTC 8.1, the EPA does not belie ve it is necessary to provide an extension across the board, but only in cases where the rule is not finalized as proposed. The EPA does believe it is appropriate and justified to provi de sources additional time to comply with new requirements not contemplated at proposal, that is, the requirement to use ULSD fuel for emergency engines that operate or that have contractual obligations to operate for more than 15 hrs/ yr and report their operation to the
EPA.

8.3 Comment : One commenter (1145) noted that the EP A solicited comment on “whether special consideration should be given to engines whose requi rements would be reduced by this proposal if, in the final rule, the EPA does not finalize the pr oposed reduced requirement s.” The commenter (1145) supports retaining the proposed requirements and adde d that significant compliance issues will need to
be addressed if this is not the case.249 Response : The EPA acknowledges the commenter’s input. By and large, the EPA is finalizing the requirements as proposed. The EPA does not anticipate any significant compliance issues with such provisions.250 

### 9.0 Technical Corrections

9.1 Comment : Some commenters, including 1063, 1089, 1095, 1105, 1136, and 1323 asked that the EPA
make several minor corrections to the regulations, which are listed below. One commenter (1105) also requested that the EPA correct othe r rule portions and explain in the preamble various i ssues that have led to implementation and regulatory complia nce problems. Commenters 1089 and 1105 provided additional specific recommendations on how to address these issues in the rule.

 Correct the title of Table 2b of the proposed RICE NESHAP as it incorrectly contains a reference

to area sources.

 Correct 40 CFR 63.6603(a) of the RICE NESHAP to clearly reflect the engines, and their associated tables, to which this section applies.

 Clearly specify that SSM pl ans are no longer required.

 Clearly state in §63.6660(a) and Table 8 of the RICE NESHAP that ons ite records are not required. The commenter (1105) recommended these sp ecific changes: “Your records must be in a form suitable and readily available for expeditious review according to §63.10(b)(1) , except the most recent two years of data must be read ily accessible but do not need to be retained
on site .” The commenter (1105) also asked that the EPA include the excep tion text in Table 8.

 Allow sample probe placement at the engine exha ust centroid rather than completing a Method 1
or 1A traverse.

 Moisture determination using Method 320 or an “F-Factor” basis as an alternative to EPA
Method 4.

 Clarify the timing of monthly pressure drop m onitoring for no- or low-use operating months.

 Revise 63.6630(d) in the RICE NESHAP to add the underlined bold text: “Non-emergency 4SRB stationary RICE complyi ng with the requirement to re duce formaldehyde emissions by 76 percent or more using NSCR can demonstrate initial comp liance with the formaldehyde emission limit by testing for TH C instead of formaldehyde. The testing must be conducted according to the requirements in Table 4 of this subpart. The average reduction of emissions of THC determined from the performance test must be equal to or greater than 30 percent.”

 Clarify the requirements for NO x + HC emission standards in 40 CFR part 60, subpart JJJJ Table 2 as it relates to testing for small natural-gas fire d engines. Mobile source standards indicate that
HC should be assumed to be zero for units from 25 to 100 HP and the commenter (1105) requested that the EPA add a footnote to Table 2 to clarify this in subpart JJJJJ.251  Add a footnote to Table 2 of 40 CFR part 60, subpart JJJJ for emergenc y engines 25 to 130 HP
to indicate that HC should be assumed to be zero fo r natural gas engine or that HC is treated the same as VOC for this category and VOC methods apply. Otherwise, revise emission limits to
indicate NO x +VOC instead of NO x +HC in 40 CFR part 60, subpart JJJJ.

Response : The EPA agrees that is appropriate to make the first change requested by commenters and is revising the title of Table 2b of the RICE NESHAP. The EPA also agrees that it would be appropriate to revise §63.6603(a) to remove the reference to Table 1b. The EPA has also clarified in §63.6625(b)(1)(iv) and Table 8 that a SSM plan is not required for CP MS. Regarding the clarification requested for keeping records offs ite, the EPA previously addressed this issue in the March 3, 2010,
RICE NESHAP amendments. As discussed in the RTC 10.2 in the summary of comments and responses for that rulemaking, 74 the EPA agreed that records could be kept offsite, although they still must be readily accessible onsite. The EPA has revised the refere nce to §63.10(b) in Table 8 to indicate that the most recent 2 years of data do not have to be kept onsite, just readily accessible onsite. Methods related to sample probe location and mois ture determination are not being added at this time. The EPA has addressed the issue of the timing of monthly pre ssure drop monitoring for no- or low-use operating months in implementa tion guidance materials. 75 The EPA is not revising §63.6630(d) according to the commenter’s suggestion because this is clear in Table 5 of the RICE NESHAP. This rulemaking was intended to be narrow in sc ope, and not include revisions to all aspects of
the RICE NESHAP nor to make any significant changes to stati onary engine NSPS, except for consistency with the NESHAP rega rding treatment of emergency engi nes. Therefore, the EPA is not making the other changes the commenters request ed under 40 CFR part 60, subpart JJJJ related to NO x and HC emission standards. The Agency will re visit the remaining recommendations from the
commenters at a later date.

74 Response to Public Comments on Proposed National Emissi on Standards for Hazardous Air Pollutants for Existing Stationary Reciprocating Internal Com bustion Engines Located at Area Sources of Hazardous Air Pollutant Emissions or Have a Site Rating Less Than or Equal to 500 Brake HP Locat ed at Major Sources of Hazardous Air Pollutant Emissions. http://www.epa.gov/ttn/atw/ri ce/rice_rtc_2-17-10.pdf. 75 Implementation Question and Answer Document for National Emission Sta ndards for Hazardous Air Pollutants for Stationary Reciprocating Internal Combustion Engines and New Source Performance Standards for Stationary Compression Ignition and Spark Ignition Internal Combustion Engines. July 17, 2012. http://www.epa.gov/ttn/atw/ri ce/20120717riceq aupdate.pdf.252 9.2 Comment : One commenter (1095) said that the catalyst in let temperature is not specified in the rule, only discussed in the preamble. Therefore, the comme nter (1095) asked that these ranges be added to Table 5 items 13 and 14 and to Table 6, items 14 and 15.

Response : The EPA agrees with the co mmenter that the catalyst inle t temperature range should be clarified in Table 6 and has included the catalyst inle t temperatures in Table 6 of the final rule.

9.3 Comment : One commenter (1095) asked that the EPA make some clarifications to equation 4 in the
rule. The terms C adj , C d , and X CO2 are not explained and the comme nter (1095) asked that the EPA
define these terms.

Response : The EPA agrees that some clar ifications are needed to equati on 4 of the rule and has included
definitions of the terms C adj , C d , and X CO2 in the final rule.

9.4 Comment : One commenter (1095) said that §63.6630 and §63.6640 refer to compliance requirements for 4-stroke engines ab ove 500 HP at area sources that ar e not remote that operate more than 24 hrs/yr, but Table 4 in the rule does not contain corresponding items. The commenter (1095) provided a table in its comment s with specific suggestions.

Response : The EPA does not believe the changes the comme nter is asking for are necessary. The initial and continuous compliance requirements for existi ng 4SRB and 4SLB engines above 500 HP at area sources that are not remote are provided in §§63.6630(e) and 63.6640(c) and merely points to Table 4 in order to specify the CO and O 2 measurements methods. Therefore, in terms of what the commenter is suggesting, Table 4 is finalized, as proposed.

9.5 Comment : One commenter (1095) asked that the EPA revi se the language in footnote 2 for Table 2c
and footnote 1 for Table 2d to reference 63.6625(j) as well as 63.6625( i). The commenter (1095) also
said that the title of Table 2c should be corrected to read: “... existing spark ignition stationary RICE
≤ 500 HP located at a major source of HAP emi ssions.” The commenter (1095) also recommended revising the current language in 63.6615 and Table 3 because they do not reference the subsequent annual compliance demonstrations required for ex isting non-emergency 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP loca ted at an area source of HAP that are not remote253 stationary RICE and that are operated more than 24 hours per calendar year per 63.6640(c), which could be misleading. The commenter (1095) suggested speci fic revised language in its comment letter. Additionally, the commenter (1095) said that Table 5 Items 13 and 14 contain the requirement to install an oxidation catalyst and install NSCR, respectivel y, and neither of these requirements are emission limitations or operating limitations.

Response : The EPA agrees it would be a ppropriate to include a referenc e to both §§63.6625(i) and (j) in
footnote 2 of Table 2c and 2d of the RICE NESHAP . Regarding the title of Table 2c of the RICE NESHAP, in the printing of the proposed rule in the Federal Register copy, the mathematical symbol was inadvertently displayed as “>” as opposed to “ ≤ ”. The final rule maintains the “ ≤ ” as originally intended and as currently displayed in the Code of Federal Regulations. S ection 63.6615 of the RICE NESHAP is reserved for references to performance testing and points to Table 3, which is also intended to show the requirements for subsequent perf ormance tests. Because the annual compliance demonstrations that are required for existing non-emergency 4SLB and 4SRB engines above 500 HP at
area sources that are not remote are not typical “performance tests,” but more of a catalyst activity check where alternative testing measures are allowed, the EP A does not think that lis ting those requirements in §63.6615 and Table 3 of the RICE NES HAP is appropriate. Therefore, the EPA is keeping the annual compliance demonstration requirements at §63.6640(c) to avoid confusion with other continuing compliance provisions. Table 5 of the RICE NESHAP lists the requirements for demonstrating initial compliance with the rule and is the correct place to indicate that owners and operators have to install the oxidation catalyst or NSCR as part of demonstrati ng initial compliance. The EPA has, however, added “work practices” and “management practices“ to the tit le of Table 5 of the RICE NESHAP to be clear on the requirements that are contai ned within Table 5. The EPA believes this resolves the commenter’s
concern on this issue.

9.6 Comment : One commenter (867) asked that in the SI NSPS, Table 2, 4 th column, item 3 the EPA specify that the method is from appendix A of part 60. The commenter (867) also requested that the EPA specify in the table the specific appendix that the method is from because appendix A of 40 CFR part 60 has been broken down into 8 groups, i.e., appendix A-1 through A-8. Al so, in the CI NSPS, Table 7, the commenter (867) aske d if ASTM Method D6522-00 (2005) sh ould be listed as alternative
to Method 1 or 1A like it is under the SI NSPS. Lastly, th e commenter (867) asked if the flowrate should
be added to Table 7 of the CI NSPS lik e it is in Table 2 of the SI NSPS.254 Response : The EPA agrees that it is appropriate to clar ify in Table 2 of the SI NSPS that the method in item 3 is from appendix A of 40 CFR part 60 and has done so in the final rule. This is a very minor addition and adds clarity to the regulation as far as where the method can be located. The EPA is not making the other changes the commenter suggested at this point. As also discussed in RTC 9.1, this revised rule was intended to be narrow in scope and focused on the RICE NESHAP specifically, not the other engine regulations (CI and SI NSPS). The EPA did not plan on making any substantial changes to the stationary NSPS rules beyond for purposes of consistency with the changes being made to the RICE NESHAP. As such, the EPA is not making the ot her changes the commenters requested under 40 CFR part 60. These changes are not within the scope of the proposal and the recommendations regarding
methods will be revisited at a later time when the Agency is addressing 40 CFR part 60, subparts IIII
and JJJJ.

9.7 Comment : One commenter (1121) said that in the proposal at 60.4231(b) through (d) omitted language stating “part 1054, as applicable,” which wa s previously included in the rule. The commenter (1121) asked that this language be reinserted.

Response : The EPA agrees and has included this in the final rule.

9.8 Comment : One commenter (1121) asked that the EPA revise §60.4231 to clarify the certification requirements for emergency engines and proposed the following language for 60.4231(b) through (d) (60.4231(b) shown as an example (the same chan ges needed to made to 60.4231(c) and (d)) and bold
underlined text indicating addition): “Stationary SI internal combustion engine manuf acturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(4 ) to the Phase 1 emission standa rds in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Alternatively, stationary SI internal combustion e ngine manufacturers may certify their emergency or non-emergency stationary SI ICE less than or equal to 30 KW (40 HP) with a total displacemen t less than or equal to 1,000 cubic centimeters (cc) that use gasoline to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90 or 1054, as appropriate.”255 The commenter (1121) added that th e EPA should consider taking adva ntage of providing incentives for manufacturers of emergency engines that certify to more stringent standards and pointed out that 40 CFR part 1054 contains flexibility for those ma nufacturers who produce clean er engines. Allowing emergency engines to meet more stringent standard s would significantly reduce emissions from engines in the category the commenter (1121) said.

Response : The EPA is not making the suggested changes at this time, but will ta ke these comments into consideration in any future rulemaking that is di rected at addressing 40 CFR part 60, subpart JJJJ.256 

### 10.0 Miscellaneous Comments

10.1 Uncertainty around Engines used for Emergency DR

10.1.1 Comment : One commenter (1011) said that to assess the emissions impacts from small diesel engines that are used in DR programs is complex b ecause little is known about these engines. They are widely distributed and hard to identify, accordin g to commenter (1011). Owners of many of these engines have not been required to obtain permits , therefore air quality managers have limited
information about the location and activity levels of engines par ticipating in DR programs, the commenter (1011) added. This would make it difficu lt to estimate their emissions and apply emission restrictions where necessary, and it is the commenter’s (1011) opinion, that if the proposal goes final this would burden state air quality staf f who would, according to the co mmenter (1011) be required to conduct extensive inventory improve ments to obtain a proper account of these engines for SIPs. The commenter (1011) said that the EPA should devel op an inventory of these engines and provide additional funding to states that would need to develop SIP quality emissions inventories. Another commenter (1090) also asked how state air quality regulat ors will be able to model
emissions from uncontrolled RICE in remote areas or from RICE pa rticipating in DR programs when
data on the number and locations of units as well as run times and pollution emissions are unavailable. The commenter (1090) said that operation of these units could prevent attainment with the NAAQS, with costly implications fo r states, regulated entities and the health of the public.

Response : As the EPA has acknowledged and indicated in the preamble to the final rule, the EPA does not have specific informati on about the location of the stationary RI CE affected by this final rule that operate under DR programs. The EPA agrees with th e commenter who stated that it is difficult assess the emissions impacts. Nonetheless, it is outside of the scope of this rulemaking to develop an inventory of DR engines and to provide funding to states to develop their inventories of engines for SIP purposes. With that said, the final rule requi res owners and operators of stationa ry emergency RICE that operate or are contractually obligated to be available for more than 15 hrs/yr for emergency DR to report the dates and times the engines operated for emergency DR annually to the EP A, beginning with operation during the 2015 calendar year. This reporting requirement w ill substantially improve what is known of these engines and information regarding the location, size, age, and hours of operation of many engines will
become available and can be shared with state and local agencies.257 In response to concerns about the ability of stat es to meet NAAQS, the EPA does not believe that
a nationwide rule is the best avenue to address those concerns. Rather than a national rule, area-specific requirements such as state-based SIP activities would be more appropriate to a ddress local issues with ozone. The NAAQS issues are di scussed further in RTC 3.1.4.

10.1.2 Comment : One commenter (1033) said that the lack of location information also makes it impossible to determine if there are any situations where an aggregator exerting common control over multiple RICE might trigger majo r stationary source permitting re quirements under the EPA’s case-bycase aggregation policy, which the EPA not es is a “highly fact-specific” decision.

Response : As discussed more extensively in this doc ument in RTC 3.1.4 and 3.3.1, the EPA is requiring owners and operators to submit re ports to document the location of em ergency engines that are used for or that are contractually obligated to be used for more than 15 hours per calendar year. Therefore,
information on the location of these units will be ava ilable. Other useful information about these units such as how much they are operated and what size the units are, in addition to the fuel used in these units, will also be available. The reporting require ment is specified at §63.6650(h) of the final RICE NESHAP and at §§60.4214(d) and 60.4245(e) of the CI and SI NSPS, respectively.



### 10.2 Life Time Non

‐ Emergency Provisions

10.2.1 Comment : Several commenters, including commenters 873, 902, 909, 950, 968, 1008, 1027, 1043, 1052, 1053, 1055, 1056, 1060, 1063, 1064, 1089, and 1093 expressed that they do not agree with the EPA’s rigid proposed requireme nt that once an engine exceeds the calendar year limitations on nonemergency operation it will be consid ered a non-emergency engine for the remaining life of the engine
and additional commenters were concerned with the averaging periods. This means that the engine would be subject to the requirements for non-emergency engines. For example, if an engine accidentally tests for 101 hrs/yr the engine fr om that point on must be treated as a non-emergency engine, and the commenter (1043) did not endorse this proposed requirement. One commenter (1082) argued that the EPA’ s proposed language on exceedances of the 100-
hour limit is inflexible and will re sult in accidental shutdowns or over expenditures. The commenter (1082) suggested the EPA add flexibility to the pr oposed rule language stating that any emergency258 generator that exceeds 100 hours of allowed opera tion would automatically lose its emergency designation. Another commenter (968) object ed to the lifetime penalty provision, because it would apply even in cases where the engine were sold to anothe r owner, thus eliminating the financial value of the unit in the United States and the ability of the lo cal community to meet the power needed of their citizens during a winter ice-storm and or summer to rnado that destroyed a transmission line. The commenter (968) added that the breadth of the pena lty raises constitutional que stions because it would deprive a person – in this case a community – of their property without due process of law.
Commenter 1056 also said that it is not r easonable based on inadvertent and unintentional exceedances. Instead, several commenters (873, 902, 909, 939, 978, 981, 984, 1000, 1017, 1027, 1036, 1043, 1045, 1051, 1053, 1055, 1065, 1074, 1082, 1104, 1146, 1148, 1151, and 1445) suggested that the 100 hrs/yr calendar year total lim it be calculated as a running 3-year average. The commenter (1082) stated the rolling average would enable smaller util ities with RICE units to preserve the emergency designation of those units should they accident ally exceed the annual limitation. Commenter 1064 agreed that a 3-year average is more appropriate a nd would represent the true operational pattern of the engine and prevent automatic recharacterizati on from emergency to non-emergency. One commenter (1053) asked that the 50 hrs/yr be averaged over 3 years. Commenter 977 said that the operation of engines fluctuates from year to year and could go from 12 hrs one year , zero in the next year, 50 to 90 hrs/yr after that and back to 4 hrs in year 4. Th erefore, the commenter (977) believes that a rolling average would be more appropriate and would he lp small utilities. Several commenters (1082, 1119, 1148) suggested multi-year averaging periods be used in determining compliance. Commenter 1056 recommended a 2 or 3-year rolling average. This commenter (1056) also suggested that except for annual testing and maintenance, the emergency engine could lose its ab ility to operate for any other nonemergency purpose unless the engine wa s able to comply with the standard. This would mean that under this alternative the engine could still be used so lely for emergency situations defined under the rule, commenter 1056 said. One commenter (1119) recommende d a 5-year rolling average, not to exceed 100 hrs/yr on an annual basis. One commenter (1052) suggested that the EPA allo w the status of an engine to change from an emergency to a non-emergency engine at any ti me (even beyond 2017), allowing a 1-year period for meeting compliance as a non-emergency engine, whic h would allow for better planning and flexibility in response to changing conditions.259 Comment 909 asked that as an alternative to the rolling average that the EPA allow a provision where the site could petition the EPA. Commenter 1064 believes that finalizing this requirement could lead to unnecessarily harsh consequence with little to no environmental benefit. Instead, the commenter (1064) recommended that the EPA use its enforcement discretion to fa shion appropriate relief in the case where an engine goes beyond the 100 hrs/ yr limit for non-emerge ncy purposes without aftertreatment, as the commenter (1064) believes the Agency does in most every other regulatory and enforcement context. In particular, the commenter (1064) is concerned that this would be a very strict requirement on emergency generators in remote , unmanned locations, where the transfer from commercial to generator power is do ne automatically. In the event that automatic controls fail, which has occurred in past, generators may start inadve rtently or may not be s hut down when intended, and when this occur it is possible that the operation of these units may go undetected for days, commenter 1064 said. Further, according to commenter 1064, it is possible that the unit may go beyond the 100 hrs/yr before personnel could be at the site to switch back to commercial power. The commenter (1064)
does not believe that an inadvertent error as desc ribed in this example would justify changing the regulatory status of the engine for the remainder of the engine’s life. Rather than finalizing the proposed regulatory language, the commenter (1064) recommended that the EPA strike th at language and employ Agency discretion and evaluate each situation on a cas e-by-case basis. This would give flexibility in
cases where the exceedances were unintentional or unavoidable and prevent the owner from having to install costly environmental cont rols, the commenter (1064) said. One commenter (1093) stated the EPA should not adopt its proposed “non-emergency for the remaining life of the engine” condition. The commenter (1093) believes it is unnecessary and inappropriate to codify a one-size- fits-all approach for engines that exceed calendar year limitations on non-emergency operations, and could lead to unnece ssarily harsh consequences with no or little corresponding environmental benefit. The commente r (1093) suggested that the EPA rely on its enforcement discretion to fashion appropriate relief in the event that an engine exceeds the 100-hour non-emergency use limitation. One commenter (1093) expressed concern with the potential impli cations of the EPA's proposed hard-and-fast rule on emergency generators locat ed at remote, unmanned locations. The commenter (1093) asserted that transfer betw een commercial power and generator power at these locations is done by means of automatic controls that may malfunction, cau sing a generator to inadvertently start or fail to shut down on command causing an exceedance of the 100- hr/yr runtime limit before personnel could be dispatched to transfer back to commercial power and shut down the generator. The commenter (1093)260 believes this should have no bearing on the regulatory status of a generator fo r the remainder of its
useful life-but this would be the resu lt under EPA's proposed regulatory language. The commenter (1093) stated that a better appro ach would be for the EPA to use its inherent
enforcement discretion to address non-compliance on a case-by-case basis as it does in other contexts. Alternatively, in addition to making clear that it always retains authority to fashion case-specific solutions, the commenter (1093) stated that the EPA should adopt an approach whereby in order for the regulatory status of an engine to change from emergency to non-emer gency, it must not only exceed the non-emergency use restrictions in a given year, but also on a three- year, block-average basis. The commenter (1093) offered the following regulator y amendment to implement this approach: An engine that exceeds the calendar year lim itations on non-emergency operation (1) during any calendar year, and (2) on an average basis for that year and the two successive years will be considered a non-emergency engine and subject to the requirements for non-emerge ncy engines. Two commenters (909 and 968) said if an engine operates outside of lights out for greater than 100 hours in any year for realistic documented r easons, the EPA should either allow a provision whereby a site could petition the EPA or the designated NESHAP authority to not treat it thereafter as a non-emergency engine, or the rule should track th e 100 hours based on a rolling 3-year average. One commenter (1047) said that the EPA, in cooperation with state and local delegated authorities, should address calendar year exceedances on a case-by-case ba sis to consider mitigating circumstances before requiring the classification of an engine for its remaining life. One commenter (929) recommended that §60.42 11(f), §60.4243(d), and §63.6640(f) be revised to read “An engine that exceeds the calendar y ear limitations on non-emer gency operation will be considered a non-emergency engine and subject to the requirements for non-em ergency engines for the remaining period that the engine remains at in service at the cu rrent location.” According to the commenter (929), this change is needed to accommodate situations where the engine is leased or sold during the life of the engine, resulting in a transfer of ownership or operational control. The commenter (929) added that the functionality of an engine to operate as an emergency engine depends on the location of the engine as well as the operational application. Another comment er (1139) made similar recommendations that exempt emergency engines that exceed the use allowance should only be reclassified only for the life of the engine at the same stationary source. Otherwise, the commenters (1139) said, the engine would have to be tracked so that if the ow ner sells the engine, the new owner could not use it as an emergency engine subject only to good operational practice. The commenter261 (1139) said that this would be difficult to enfor ce unless the rule also requi res permanent documentation to accompany the engine.

Response : The EPA proposed in §§60.4211(f), 60.4243(d), and 63.6640(f) that an engine that exceeds the calendar year limitations for non-emergency operation be consider ed a non-emergency engine and subject to the requirements for non -emergency engines for the remain ing life of the engine. The EPA
has reviewed comments on this issue and agrees with commenters that it would be more appropriate to address non-compliance on a case-by-case basis. Theref ore, the EPA is not fina lizing this particular provision. The EPA has specified in the final rule that any emergency engine that is not operated according the provisions necessary to be followed to remain an emergency engine under 40 CFR part 60, subparts IIII and JJJJ, and part 63, subpart ZZZZ, would not be considered an emergency engine and would have to meet the requireme nts specified for non-emergency engi nes. These provisions no longer include the “once a non-emergency engine, always a non-emergency engine” clause of the proposal. If an emergency engine exceeds the 100 hrs/yr limitation, it is considered a violation and the exceedances will be evaluated on a case-by-case basis. The EPA does not agree with co mmenter 929’s suggested language, but has instead finalized the following la nguage: “If you do not operate the engine according to the requirements in paragraphs (f)(1) through (4) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non- emergency engines,” at §63.6640(f), and the same provision has been sp ecified at §§60.4211(f) and 60.4243(d). The EPA does not agree with the commenters that it would be appr opriate to use a rolling average over a period of several years. The limitation is intended to be an upper limit that will apply fo r every calendar year and it would not be appropr iate to allow sources to ex ceed the limit in some years.



### 10.3 Recordkeeping and Reporting

10.3.1 Comment : A number of commenters (941, 942, 945, 948, 951, 952, 968, 970, 976, 984, 1018, and 1036) said that the rule is silent on the method, manner and details of the records that must be maintained by the regulated entities on the operation of these “emergency only” engines. One commenter (968) believes that it is essential for equ ity and consistency that th e rule gives guidance both to the regulated community and to Federal and state regulators/inspector s about the expected documentation. The commenter (968) said that failure to do so requires each permitted municipality to
assemble their own method of docu mentation for purposes of complia nce and it creates the opportunity262 for each EPA region to develop its own guidance a nd directions which additionally opens the door for charges that the EPA is inconsistent in enforcement. Two commenters (968 and 989) asked the EPA to sp ecify that records might be kept in either written or electronic form. Two commenters (1082 a nd 1104) stated that a paper requirement is consistent with other statutory re quirements where the regulated part y retains a paper log or notebook on the premises that would be eas ily retrieved during an inspection and opposes mandatory electronic reporting or expensive electronic data management systems on RICE units. Commenter 1104 added that frequency conditions should also be documented by th e utility using paper r ecordkeeping procedures. One commenter (1082) made similar statements and also stated the EPA’s recordkeeping emergency event requirements are onerous and believes alternativ es should be considered. In keeping track of low voltage events, the commenter (1082) requested that u tilities be given the option of recording events in paper or electronic logs. The co mmenter (1082) asserted that this is an acceptable method of recordkeeping for other EPA rules and would help the EPA address its obligations under the Regulatory Flexibility Act. The commenter ( 1082) suggested the following language: “In the event that the engine is operated fo r any reason, the owner or operator must keep reasonably contemporary records eith er electronically or in writing of the date and time of the commencement and ending of operation with referen ce to the non-resettable hour meter as well as the purpose of the engine operation. In the event that th e engine was operated becau se of a deviation in voltage of 5 percent or greater, or frequency deviation, the record shall include whether it was for voltage or frequency, the date, time and unit identification.” Other commenters (968, 989, 1017, 1036, and 1051) offered similar language.

Response : The recordkeeping requireme nts in the RICE NESHAP ar e specified at §63.6655 and the EPA did not propose to make any changes to the existi ng requirements in that section of the rule. The EPA believes the requirements are cl ear and the Agency is not silent on the method, manner and details
of the records that must be maintained. The r ecordkeeping requirements fo r emergency engines are described in §63.6655(f) and require records to be kept of the engine operation via a non-resettable hour meter. This requirement applies to all existing emer gency engines less than or equal to 500 HP at major sources and all existing emergency engines at area s ources regardless of what the emergency engine is used for if the engine meets the definition of an emergency stationary RI CE as defined in §63.6675. Owners and operators are required to keep records indicating what th e engine was used for, i.e., emergency or non-emergency, and what classified the operation as ei ther emergency or non-emergency263 (including tracking low voltage events). Owners and ope rators of engines that are used for DR purposes must keep records of the notification of the emergenc y situation and the time th e engine was operated as part of DR. The vast majority of engines come equipped with an hour meter and the EPA does not believe that keeping track of emergency events is onerous. Further, as specified in §63.6660(c), records can be kept in either paper or electric form, as l ong as the records are readily accessible. This provision includes tracking low voltage events. The EPA has re tained the provisions in the current regulation pertaining to recordkeeping requireme nts for owners and operators of emergency engines. However, the EPA notes that emergency stationary RICE that operate or that ar e contractually obligated to be available for more than 15 hours per calendar year for DR purposes are su bject to annual reporting requirement, as specified in §63.6650(h) of the RICE NESHAP, and at §§60.4214(d) and 60.4245(e) of the CI and SI NSPS, respectively. Owners and oper ators of these engines cannot simply maintain records (paper or electronic), but will be required to submit these re ports yearly to the Compliance and Emissions Data Reporting Interface (CEDRI) on line reporting tool and provide the mandatory information spelled out in the rule.

10.3.2 Comment : One commenter (877) stated that imposin g a new 10-year recordkeeping requirement on stationary sources would conflict with Alaska Administrative Code, 18 AAC 50.326(k)(B)(7) that states, “the [Alaska] department [of Environmental Conservation] will keep for five years any record
and submit to the Federal administrat or any information that the Fede ral administrator may reasonably require to ascertain whether the state Title V permit program comp lies with the requirements under 42 U.S.C. 7661-7661f (Title V, CAA).” The commenter (877) stated that their comp iled engine hour data only goes back to 2006 because their air permits only require Operating Report retention for a period of 5 years.

Response : Based on public comments received on the propos al, the EPA is not finalizing the limitation that the engine be used less than 500 hrs/yr on a 10-year rolling average that was part of the third criterion of §63.6603(b)(iii) of the propos ed rule. Therefore, concerns regarding how to calculate and keep track of a 10-year rolling average, and the proposed requirement conflicting with the State of Alaska provisions are a non-issue.

10.3.3 Comment : One commenter (1067) said that the owners/ operators of stationary emergency engines that participated in emergency DR programs should be required to notify the EPA or their state or local264 permitting authority by the effective date of the rule or within 30 da ys of signing up with a DR program, whichever is later, if they intend on using the ex emption in the rule. For transparency purposes, the notification should be publicly available and should include, at a minimum, the following information: owner/operator, DR program, ISO or balancing authority, location, engine size, make and model, installation date, fuel type, estimated emissi on rates, and emission controls, if any.

Response : The EPA agrees that a reporti ng requirement for certain engine s participating in emergency DR programs is appropriate and would increase transp arency and assist regulat ory agencies in ensuring that these engines are in compliance. Therefore, the EPA is including a requirement in all the final rules (RICE NESHAP, CI NSPS and SI NSPS) that engines that ar e operated for more than 15 hours per calendar year, or that have entered in contracts re quiring the engines to be available for more than 15 hours per calendar year, annually report to the EPA th e engine location and duration of operation (and other engine details as specified in §§60.4214( d), 60.4245(e), and 63.6650(h)) for emergency DR. The EPA agrees with the comment er that this information should be av ailable to the public and owners and operators subject to the reporting requirement must use the specific reporting form in the Compliance and Emissions Data Reporting Interface (CEDRI) av ailable on the EPA’s Central Data Exchange website, and therefore the informa tion submitted on emergency engine s will be publicly accessible for anyone to use. The annual reporting requirement is specified at §63.6650(h) of the RICE NESHAP, and at §§60.4214(d) and 60.4245(e) of the CI and SI NSPS, respectively.

10.3.4 Comment : One commenter (1052) said that it is unclear if initial notifica tion is required by May 3, 2013 for emergency stationary CI engine s and asked that this be clarified.

Response : Per §63.6645(a)(5), if you own or operate an ex isting stationary emergency RICE you are not subject to initial notification requirements.

10.3.5 Comment : One commenter (968) noted that operation for peak shaving purposes is limited to a 4- year period from May 3, 2013 to April 16, 2017. The comme nter (968) said that since the draft rule
narrative makes it clear that the deadline will not be extended, it is inconsiste nt with the Regulatory Flexibility Act to require communities to invest in the electronic equipm ent necessary to monitor, record and report operation of their engines when they ca n only do so for a period of less than 4 years.265 Response : Tracking the hours of operation for an engine is not an onerous activity and the majority of engines already come equipped with hour meters that automatically monitor engine operation. Hour meters are for the most part st andard equipment used to keep track of engine operating hours for maintenance and warranty purposes. On engines where hour meters are not standa rd equipment, a device to record hours can be easily installed at a low cost . Also, regardless of whether the emergency engine is used for peak shaving purposes, the owner or operato r is still required under the rule to install a nonresettable hour meter, per §63.6625(f). This requirement a pplies to all emergency engines, even if they are not used for peak shaving. Fu rther, the requirement to docume nt the hours of operation and what they are spent for applies to all emergency engine s, as specified in §63.6655(f). Therefore, the comment about recordkeeping is a moot point as it relates to peak shaving and the proposed temporary allowance.

10.3.6 Comment : One commenter (1090) said that in order to provide the Agency w ith the basic data it needs to protect public health, the EPA should require all stationary engines, wh ether new, modified or existing, emergency or non-emergency, or located in remote or non-remote areas, to be registered in order to provide the Agency with much needed information. According to the commenter (1090), precedent exists for requiring registration of stationary generators noting that several states that have adopted emissions standards for stat ionary generators have included registration requirements in their regulations, including California, C onnecticut, and Maine. The commenter (1090) stated that typical registration information, in additi on to names, addresses and model numbers, includes emissions data, fuel types used, and construction dates and that re-re gistration should also be required when there is a change in the owner or operator of an engine. The commenter (1090) said that the EPA needs this type of information from all stationary engines in order to enforce compliance with emissions limits, ensure reporting is carried out by all engine owners a nd operators, and apply the appropriate emissions standards for remanufactured engines. Commente r 1125 agreed that the EPA should adopt a reporting requirement within the RICE NESHAP or through a separate rule, requiring ow ners and operators to provide the EPA with notification of participation in emergency DR program, including hours of operation and emissions.

Response : The EPA agrees that it is appropriate to re quire owners and operators of some engines to report to the EPA information about the engine a nd operation. In the final rule, the EPA is adding a requirement that owners and operators of emerge ncy stationary RICE that operate or that are contractually obligated to be available for more than 15 hours per calendar year for DR purposes submit266 annual reports. The yearly reports are required to incl ude details about the engine such as the size and model year of the engine, information about the fuel used if the fuel deviated from the fuel that is required to be used, where the engine is locate d, and how frequently the engine is operated for emergency DR purposes. The annual reporting requirement is required for owners and operators in all three engine rules at 40 CFR §§63.6650(h), 60.4214(d) and 60.4245(e). Owners a nd operators of these engines will be required to submit informati on on the engines annually through the CEDRI online reporting tool available through EPA’s CDX ( www.epa.gov/cdx ). However, the Agency does not believe that it is reasonable to require notif ications or registration of all engines across the board. For example, the EPA does not require owners and operat ors of existing stationary RICE less than 100 HP, existing stationa ry emergency RICE, and existing stationary RICE that are not subject to any numeri cal emission standards to submit notifications in §63.6645(a)(5). The EPA has previously determined that requiring re porting from owners and operators of small and emergency engines would be too burdensome. Howe ver, the Agency does require notifications and reporting for those engines whose e missions are of greatest concern. The Agency requires notifications from existing stationary RICE that are less than or e qual to 500 HP at major sources, existing stationary RICE at area sources, stationary RICE greater than 500 HP at a major source, and new or reconstructed 4SLB stationary RICE greater than or equal to 250 HP at a major source, as specified in §63.6645(a)(1)- (4), as long as these engines are not any of the engines in §63.6645(a)(5). The engines specified in §63.6645(a)(1)-(4) represent a substantial number of engines from the total uni verse of engines and
notifications of the whereabouts and details of these units will be helpful to the Agency. Further, the Agency requires reports to be submitted as speci fied in §63.6650 and Table 7 of the rule, which will capture additional engine information and information about the emissions of engines that have the most significant emissions.

10.3.7 Comment : One commenter (1063) said that Footnote 2 of Table 2d requires sources to report any failure to conduct management practices in a tim ely manner due to an emergency. The commenter (1063) asked that the EPA clarify w ith a citation under which notifica tion or reporting requirement this report is to be filed. The comme nter (1063) added that filing th e report under §63.6650(f) does not appear to be appropriate because failure to conduct management practi ces in a timely manner due to an emergency is not a deviation unde r 40 CFR part 63, subpart ZZZZ.267 Response : Footnote 2 to Table 2d is the only citation for th is reporting requirement. This is a stand-alone reporting requirement that is sepa rate from the other reporting re quirements described in §63.6650(f).



### 10.4 Consistency with the NSPS

10.4.1 Comment : One commenter (1093) supported the EPA’ s efforts to bring consistency to the treatment of emergency engines under NSPS and NESHAP rules. The commenter (1093) believes such consistency helps the regulated community by allowi ng one set of operating limitations and procedures as we upgrade older units to newer cleaner engines.

Response : No response is needed.

10.4.2 Comment : One commenter (956) supported the EPA’s pr oposal to modify the relevant language
in the NSPS to be consistent with the revised NESHAP language. One comme nter (1091) supported the EPA’s proposal to amend the NSPS for stationary CI and SI engines in 40 CFR part 60, subparts IIII and JJJJ, respectively, to provide the same allowance fo r stationary emergency e ngines for emergency DR operation as for engines subject to the RICE NE SHAP. The commenter (1091) noted that the NSPS regulations currently do not include such allowance for emergency DR operation and, as result, owners and operators of emergency engines in Hawaii that are subject to NSPS subpa rt IIII or JJJJ, are not allowed to participate in its emergency DR program. One commenter (989) recommended that the EPA should revise 40 CFR §§60.4211(f) and 60.4243(d) to be consistent with the propos ed 40 CFR §63.6640(f) by including paragraphs 63.6640(f)(4)(i) and (ii) in the CI a nd SI NSPS sections. The commenter (989) said that the proposed NESHAP provides for limited peak shaving until April 16, 2017; however the NSPS sections do not
allow this limited use. Two commenters (950 and 1065) said that the NESHAP provisions for non-emergency DR should be added to the NSPS in both 40 CFR part 60, subparts IIII and JJJJ. One commenter (1025) supports the EPA’s proposal to change the NSPS so th at the same emergency DR that is in the NESHAP
will be in the NSPS. One commenter (902) recommended that in addi tion to making the non-emergency/peak shaving changes in the NESHAP, the same changes should be made in the NSPS in both subparts IIII and JJJJ.268 Response : As discussed in the RTC 2.2.1, the EPA is not finalizing the propos ed limited temporary allowance for peak shaving, so it w ould not be appropriate to include such an allowance in the NSPS. As it relates to emergency DR operation, the EPA is finalizing language that is consistent for stationary RICE covered under 40 CFR part 63, subpart ZZZZ and 40 CFR part 60, subparts IIII and JJJJ.



### 10.5 Use of ULSD Fuel or Alternative Fuels

10.5.1 Comment : One commenter (1033) noted that in th e NESCAUM region, many states require emergency backup generators to use ULSD containi ng 15 ppm or less sulfur by weight. The commenter (1033) said that the use of ULSD fuel should be in corporated into the EPA’s final rule as a basic requirement for all diesel engines of any age operating in any DR program. The EPA requested additional information from th e commenter due to a lack of available data showing that switching to ULSD wo uld result in HAP reductions and asked if the commenter had any
information to show the link in the reduction of HAP upon changing the fuel to ULSD. In information received from the commenter, 76 including a recent report published by NESCAUM, 77 the commenter
stated that there is evidence that the use of UL SD alone can reduce air t oxics, such as the BTEX compounds (benzene, toluene, ethylbenzene and xylene) and metals, and notes that ULSD also leads to reductions in THC, which would lower other HAP in the exhaust. The commenter (1033) pointed the
EPA to several different st udies on heavy-duty vehicles 78 and argued that the studies would be applicable to stationary diesel engines as well. The commenter (1033) also discussed how HAP
emissions are reduced with the combination of ULSD and the use of DPF, and referred to the EPA’s previous rulemakings on ULSD use with on-road a nd off-road diesel engi nes stating that those rulemakings would provide supporting information on this. Also, the commenter (1033) cited to the
EPA’s 2002 Health Assessment for Di esel Exhaust, which the comment er (1033) said provides details on a variety air toxics in di esel exhaust that ULSD and DPF can substantially reduce (http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid= 29060). The commenter (1033) indicated in the additional information requested that although the greatest benefit in re ducing air toxics from stationary engines when using ULSD fuel would be to use th e fuel in combination with DPF. However, even

76 Email from Paul Miller, NESCAUM to Melanie King, EP A. NESCAUM's RICE NESHAP comments. October 11, 2012. EPA-HQ-OAR-2008-0708-1459. 77 Determination of Sulfur and Toxic Metals Content of Di stillates and Residual Oil in the State of New York. NYSERDA. Final Report 10-31. December 2010. 78 See attachments to EPA-HQ-OAR-2008-0708-1459.269 without DPF, the commenter (1033) said that there are several consistent fi ndings that ULSD alone lowers air toxics from diesel engines.

Response : The EPA agrees that it is appropriate to requi re certain stationary RI CE to ULSD fuel. The EPA already requires existing non-emer gency, non-black start CI stationa ry RICE with a site rating of more than 300 brake HP with a displacement of less than 30 l/cyl to use ULSD under §63.6604(a). Switching from higher sulfur fuels to ULSD w ill lead to substantial reductions of air toxic emissions. Although the cost of ULSD is more than ot her higher sulfur fuels such as No. 2 fuel oil and low sulfur fuel, it is cost effectiv e to use ULSD because of savings a ssociated with reduced maintenance from using such fuel. With that sai d, the Agency disagrees that a 15 ppm fuel requirement is justified for all diesel engines, regardless of si ze. Requiring ULSD across the board i ndependent of engine size is not justified. For engines below 100 HP, the costs and regul atory burden associated with complying with the fuel requirement may become prohibi tive given the nature and use of these engines and their owners and operators. Also, the Agency did not propose the ULSD requirement and did not propose any action in this rule regarding non-emergency CI engines in genera l or emergency engines used in or contracting for emergency DR for less than 15 hrs/ yr. Therefore, the EPA does not believe it is appropriate in the context of this rule to add ULSD requirements for any engines beyond those emergency engines for which requirements were proposed to be revised. Therefore, the final rule at §63.6604(b) and (c), the EPA is amending the rule to include a requirement that beginning January 1, 2015, stationary emergency engines that are used or contractually obligated to be available for more than 15 hrs/yr for emergency DR, or res ponding to voltage/frequency deviations, or used for local reliabi lity needs, use ULSD if the engine is larger than 100 HP. The EPA is adding this requirement beginning in January, 2015, rather than upon initial implementation of the NESHAP for existing engines in Ma y 2013, to provide sources with appr opriate lead time to institute this new requirement and make any physical adjustme nts to engines and other facilities like tanks or other containment structures, as well as any need ed adjustments to contracts and other business activities, that may be necess itated by this new requirement.

10.5.2 Comment : One commenter (982) expressed that with the recent finding by the WHO that diesel exhaust is a carcinogen, the EPA should require stationa ry diesel engines to install DPF. The technology has been demonstrated effective in reducing PM e missions from mobile and stationary engines, and provides with the use of ULSD the maximum reducti on in PM and additional benefits of substantial270 reductions in toxic HC, CO and black carbon, the co mmenter (982). The technology should be installed on existing stationary diesel engines, where it is feasible, on both non-emergency and emergency engines above 50 HP.

Response : For existing diesel engines, the EPA is not stip ulating a particular tec hnology in order to meet the emission standards. Owners and operators co uld apply any technology that would achieve the reductions or emission standards required under the ru le for existing diesel e ngines, including DPF, and the EPA has not rejected DPF as a potential control option. The Agency agrees that DPF is capable of substantially reducing PM emissions from CI engine s. However, the focus of the rule is on HAP
emissions and in terms of the HAP reductions and costs associated w ith a particular control technology,
the EPA has determined that diesel oxidation cata lyst is justified based on those factors. The EPA discussed more extensively in response to comments 79 on the 2010 rule the reasons for not setting standards for existing diesel engines based on DP F. The EPA disagrees st rongly to requiring DPF on emergency and small engines, or any other aftertrea tment control for that matter. The EPA determined that work practices were appropriate and justified fo r small and emergency engines, and the rationale for this determination was discussed at length in 2010. 80 The EPA is including additional fuel requirements in the final rule at §63.6604(b) and (c) that
will lead to reductions in the emi ssions of air toxics, including metal lic HAP (e.g., nickel, zinc, lead) and benzene. Per §63.6604(b), stationary em ergency CI RICE with a site ra ting of more than 100 brake HP and a displacement of less than 30 l/cyl that operate or are contractually obligated to be available for more than 15 hrs/yr for emergenc y DR, or that operate for local system reliability, must beginning January 1, 2015, use ULSD fuel. Similarly, per §63.6604(c), beginning January 1, 2015, new emergency CI stationary RICE with a site ra ting of more than 500 brake HP and a displacement of less than 30 l/cyl located at a major source of HAP that uses diesel fu el and operates or is cont ractually obligated to be available for more than 15 hours per calendar year mu st also use ULSD fuel. These fuel requirements are in addition to the existing requirement in §63.6604 (§63.6604(a) in the final rule) that requires

79 Memorandum from Melanie King, to EPA Docket EPA-HQ-OAR-2008-0708. Response to Public Comments on Proposed National Emission Standards for Hazardous Air Pollutants for Existing Stationary Reciprocating Internal Combustion Engines Located at Area Sources of Hazardous Air Pollutant Emissions or Have a Site Rating Less Than or Equal to 500 Brake HP Located at Major Sources of Hazardous Air Pollutant Emi ssions. EPA-HQ-OA R-2008-0708-0367. 80 Memorandum from Bradley Nelson and Tanya Parise, EC/R to Melanie King, EPA. MACT Floor Determination for Existing Stationary Non-Emergency CI RICE Less Than 100 HP and Existing Stationary Emergency CI RICE Located atMajor Sources and GACT for Existing Stationary CI RICE Located at Area Sources. February 15, 2010. EPA-HQ-OAR2008-0708-0327.271 existing non-emergency, non-black star t CI stationary RICE with a s ite rating of more than 300 brake HP with a displacement of less than 30 l/cyl that uses diesel fuel, to use ULSD fuel. Upon implementation of the combination of these fuel requirements in §63.6604 of the final rule, these provisions are expected to have significant benefits.

10.5.3 Comment : One commenter (968) noted that allowi ng for the use of non-ULSD fuel in emergency-use engines creates a comm on sense solution for cities with le gacy stock of off-road diesel
fuel that does not meet the ULSD specifications. The commenter (968) said that allowing cities to consume this legacy fuel avoids significant cost s of immediately pumping and cleaning the tanks to
refill them with ULSD fuel. Accord ing to the commenter (968) it also avoids the practical problem of what to do with the amounts of fuel placed into th e market, and avoids potential environmental problems which can be created with the physical and struct ural instability of em pty underground tanks. One commenter (947) said that diesel is often the only av ailable fuel during emergency situations, especially in rural areas; rules should recognize the lim ited fuel choices in all of rural America.

Response : Certain existing emergency engines will be permit ted to continue to use existing fuels that is not ULSD. However, under the fina l rule, as discussed in RTC 10.5.2, certain emergency engines that operate for or that are contractua lly obligated to be available for more than 15 hours per calendar year for emergency DR or local system reliability must start using ULSD fuel on January 1, 2015. The EPA has taken into account issues of existing fuel i nventories of non-ULSD fuel, and has included a provision in the final at §63.6604(b) a nd (c) for engines subject to thos e requirements to use up existing fuel that was obtained prior to January 1, 2015, can be used in these engines until such fuel is depleted. The EPA believes that ULSD is now generally ava ilable throughout the United St ates and should not be difficult to find. As engines generally store their fuel on site, use in emergency situations should not be a problem, although there may be a need for case-s pecific actions in extreme emergencies.

10.5.4 Comment : One commenter (1398) said that the EPA s hould consider requiring DR units to use increasing percentages of biodiesel to ameliorate pollution concerns, furthe r wean the country from foreign oil sources and buttress home-gr own and often renewa ble energy sources.

Response : The EPA is supportive of the use of alternative fuels, such as biodiesel in stationary CI engines. As discussed in RTC 10.5.2, the EPA is requiring ULSD to be used in certain existing and new272 emergency diesel engines that ope rate for emergency DR purposes a nd local system reliability, in addition to the current requirement that existing non-emergency CI engines above 300 HP and below 30 l/cyl use ULSD. The commenter did not provide specific information to show that the use of biodiesel would reduce HAP emissions. With that said, there is nothing in the rule preventing owners and operators from using biodiesel in their engines that are subject to the requirements in 40 CFR 80.510(b)
for nonroad diesel fuel. Pe r the definition of diesel fuel in 63.6675 of the RICE NESHAP, biodiesel is a type of diesel fuel and as long as the fuel meets the criteria specified in items (1) and (2) of 40 CFR 80.510(b), owners and operator s are free to use such fuel to sa tisfy the requirements in §63.6604 of the final rule that require fuel compliant with 40 CFR 80.510(b).



### 10.6 Stationary CI Engines >30 l/cyl

10.6.1 Comment : One commenter (1004) said that the EPA need s to address issues related to stationary CI engines above 30 l/cyl. The commenter (1004) has previously argued that oxidation catalyst and the CO and formaldehyde emission standards in the rule are not feasible for larg er engines because of technical compatibility issues. The commenter ( 1004) recommended that the EPA incorporate the
recommendations submitted on J une 3, 2009 (EPA-HQ-OAR-2008-0708-0096).

Response : In order to establish different requirements fo r large stationary CI engines, EPA would need information to show that these emissions and operati on of these engines are sufficiently different to warrant different requirements. Th e commenter has not provided any e missions or operating data in the
context of this or the earlier rule to show that the emission limits are not achievable for these engines.



### 10.7 Other

10.7.1 Comment : One commenter (1089) noted that it has various concerns regarding the Questions and Answers (Q&A) document the EPA issued on July 17, 2012. The commenter (1089) said that the document may pose issues related to this rulemaki ng. The commenter (1089) said that it has reviewed the Q&A document and that it wi ll submit comments separately.

Response : The EPA will review the commenter’s c oncerns regarding the Q&A document when
received.273 10.7.2 Comment : One commenter (1069) requested that th e EPA provide a limited use exemption for stationary engines at area sources similar to the exemption provi ded for major sources in §§63.6600(c), 63.6640(e), and 63.6665. The commenter (1069) said that there is no rationale provided for exempting limited use engines at major source, but not at ar eas sources and claimed it might have been an
inadvertent or unintentional error due to several itera tions of the rule, where at one point the rule had requirements for major sources, but not for area sources. The commenter (1069) asked that area sources that operate less than 100 hrs/yr be exempt. Commenter 1106 made similar statements, and re ferred back to comments submitted on the 2009 proposed rulemaking where the commenter also request ed that the EPA exempt stationary engines at area sources that operate less than 100 hrs/yr. The commenter (1106) filed a petition to the EPA in 2012 requesting that the engines at its facility be clas sified as emergency units. The commenter (1106) added that it did not see justification for why the EPA ha s determined that only residential, commercial and
institutional facilities have emergency engines and said that utili ties have emergency engines and should have an emergency use category fo r these engines. The commenter (1106) also did not understand why industrial engines at the same area so urces would not be exempt from th e rule and said that the EPA has not provide a basis for this decisi on. The commenter (1106) requested that the EPA establish a limited use exemption for engines located at area sources s imilarly to what was done for engines above 500 HP at major sources. A limited use exemption would spar e infrequently used units from having to install expensive combustion and catalytic control systems.

Response : Regarding the comment that EPA should esta blish a limited use exemption for stationary engines at area sources of HAP, the EPA addressed this in the re sponse to comments document for the 2010 RICE NESHAP rulemaking. S ee comment 6.2.1 in the document titled “Response to Public Comments on Proposed National Emission Standards for Hazardous Air Pollutants for Existing Stationary Reciprocating Internal Combustion En gines Located at Area So urces of Hazardous Air
Pollutant Emissions or Have a S ite Rating Less Than or Equal to 500 Brake HP Located at Major
Sources of Hazardous Ai r Pollutant Emissions”, which can be found in the rulemaking document at EPA-HQ-OAR-2008-0708-0367. The EP A believes that commenter 1106 misunderstood the rule, because the rule does not specify that only residentia l, commercial, or instit utional facilities have emergency engines.274 10.7.3 Comment : One commenter (1089) asked that the EPA allow in §63.6640(f)(2)(i) operator-defined procedures for maintenance checks and readiness te sting. Smaller and isolated emergency engines may not have readily available maintenance and re adiness testing recommenda tions from government agencies or other third parties, the commenter ( 1089) said. For consistency, 40 CFR part 60, subpart JJJJ at §60.4243(d)(2)(i) should also be revised.

Response : The EPA does not agree. It is not appropriate to allow owne rs and operators of emergency engines to follow their own set of procedures for maintenance checks and readiness testing. Owners and operators must follow some set of established guid elines. As defined specified in §63.6640(f)(2)(ii) of the final rule, such guidelines must be issued by the Federal, state or local government, the manufacturer, the vendor, the regional transmission or ganization or equivalent balancing authority or transmission operator, or the insurance company associated with the engine.

10.7.4 Comment : One commenter (894) said that the propos ed rule raises a number of complicated issues, but did not express a particular opinion on the proposed rulemaking and noted the diversity in viewpoints within its members.

Response : No response is needed.

10.7.5 Comment : One commenter (886) stated that it does not support nor oppose the proposal. The commenter (886) instead stated that these rules are becoming a political tangle of complexity. The commenter (886) explained that the current tre nd of government regulatory practice toward ever increasing special interest appeasement acts more to discourage commerce, than it does to encourage healthy practices; whereas, a regulatory code with an easily defined base, simple rules, and few if any exemptions, will be less costly to implement, regulate, comply w ith, and can act to both encourage commerce, and protect the public health. The commen ter (886) used the proposed criteria in paragraph (2) in the proposed definition of “remote stationary RICE” in §63.6675, which is based on the number of buildings on either side of the 1-mile length of pipelin e as an example. The commenter (886) stated that
56 FR 48505 demonstrates that there has been past ambiguity as to the definition of a “pipeline, gathering line, processing facility, and production f acility,” and that history would suggest the same scenario could play out here. The commenter (886) also stated that the argument that many gas compression facilities, and other RI CE sources are unmanned, and remote , is not entirely true in actual275 practice, since maintenance, and operations crews vis it these sites to perform activities associated with their use, and maintenance regularly. The commenter ( 886) stated that few sites would be entirely out of the reach of currently available cellular, or othe r commercially available communications devices, and by most not be considered remote. The commenter (886) asked when would “maintenance pr actices” rather than a passive control
device such as an exhaust converter make sense to employ on a source, if the source is not manned to continually monitor, and/or maintain the source? The commenter ( 886) suggested redefining the base to achieve the same aggregate results instead of o ffering exemptions as is currently being proposed.

Response : The EPA has attempte d to finalize a rulemaking under 40 CFR part 60, subparts IIII and JJJJ and 40 CFR part 63, subpart ZZZZ for stationary engine s that is as clear as possible. However, the different regulations affect a significant number of engines and span across many different industries in all parts of the country. Stationary engines are used in numerous applications, use different fuels, have different operating characteristics a nd come in a range of sizes from very small at less than 100 HP to very large at several thousands of HP. Engines also range in age and location. The Agency must take all these factors into account when establishing a regula tion, which means that in certain cases exemptions, subcategories, and other ways of distinguishing betw een the different engines is necessary. The EPA is with this final rule clarifying several issues th at were previously unclear and making a number of corrections to the regulations. Given the complexity and size of the source category that the Agency is dealing with, the EPA believes it is finalizing rule s that are as straightfo rward as possible, while maintaining the Agency’s goal of protec ting public health and the environment.

10.7.6 Comment : One commenter (1042) had questions regarding the language in §63.6665 and said that smaller engines, particularly smaller emergency engines were co mpletely exempt from the General Provisions of 40 CFR part 63 in the 2008 revi sions. However, in 2010 the language in §63.6665 was revised and according to the commenter (1042) pena lized small engines (less than 500 HP) by making them subject to General Provisions, while larger engines (above 500 HP) were exempt. The commenter (1042) asked for justification for this provision and re quested that the language from the 2008 version of §63.6665 be put back, which exempted existing engi nes less than 500 HP from General Provisions requirements.276 Response : The 2008 RICE NESHAP did not regulate or address existing engines less than 500 HP, therefore those engines were not subject to the Ge neral Provisions under that rulemaking. Those engines
were covered under the 2010 RICE NESH AP and therefore in that rulemaking the applicability of the General Provisions was extended to those engi nes, to the extent that was appropriate.

10.7.7 Comment : One commenter (901) stated that under th e RICE NESHAP, the commenter operates the following types of equipment: emergency CI e ngines, emergency SI engines, and non-Emergency, non-black start CI stationary RICE greater than 500 HP. The commenter (901) stated that based on the current rule, the commenter will have to source test five diesel engines at its West Resort and eight at its East Resort. Additionally, the commenter (901) stated th at the engines at East Re sort are rental units and
are not onsite at all times. The co mmenter (901) stated that performing this type of testing on an ongoing basis is costly and disruptive to operations without a corresponding e nvironmental benefit. The commenter (901) stated that all of the non-emergency engines used by the commenter have been equipped with a Johnson Matthey Continuously Regenerating Technology (CRT) Particulate Filter in compliance with the California Air Resources Bo ard Stationary Diesel ATCM. The commenter (901) explained that this particular unit consists of an ox idation catalyst and diesel particulate filter and it has been approved pursuant to the CARB ATCM Veri fication Procedure under Executive Order DE-05-011. The commenter (901) explained that use of the Ve rification Procedure in California has streamlined compliance and eliminated the need for source testing by each and every affected facility. The commenter (901) urged the EPA to cons ider the Verification Procedure, among other approaches, to demonstrating in itial and ongoing compliance with th e RICE NESHAP. Similar to the California ATCM, the commenter (901) believes that the EPA could verify specific emission control strategies. The commenter (901) stated that in this way, only control strategies not verified through the verification procedure would require source testing. The commenter (902) further encouraged th e EPA to consider modeling the compliance demonstration approaches after the more flex ible California Diesel ATCM section 95115.13, which
allows: 1) off-road engine certification test data for the stationary diesel-fueled CI engine, 2) engine manufacturer test data, 3) emissions test data from a similar engine, 4) emissions test data used in meeting th e requirements of the Verification Procedure for the emission control strategy implemented,277 5) source testing of a stationa ry diesel-fueled CI engine, or 6) other alternative approved compliance demonstration method.

Response : The commenter did not provide specific informat ion about the Verification Procedure, so the
EPA was not able to determine whether it would be appropriate for demonstrating compliance with the RICE NESHAP. The EPA does not agree that it w ould be appropriate to allow compliance to be demonstrated using test data from a similar engine . The EPA cannot be certain that the engines have been operated identically, have had the same opera tional, deterioration, and malfunction experiences, and have undergone the same main tenance, all of which could affect the emissions. Engines are typically certified to grams per k ilowatt hour standards, which are not the same units as the RICE NESHAP standards (ppm), so the EPA does not belie ve that certification data would be useful in demonstrating compliance with the RICE NESHAP.

10.7.8 Comment : According to one commenter (1090), the EPA’ s proposed rule may also be in conflict with the Agency’s views on aggregation or grouping of multiple, similar sources of emissions into one single source for evaluation of certain permitting requirements. The commenter (1090) pointed to the EPA’s three-part test to determine if sources should be aggregated, wh ich includes (1) whether facilities are contiguous or adjacent, (2) whether the facilities are under common control and (3) whether the
facilities are under the same industr ial grouping. The commenter (1090) sa id that the EPA lacks critical information to make the proximity determination, but it is likely that many RICE units could be considered as being under the common control of CSP who have direct (automat ed) or indirect (via notification) access to operation of these units and RI CE units are under the same ‘reciprocating internal combustion engine’ industry cate gory. Additionally, the commenter (1090) said, these aggregated sources would have to exceed locally established po llution emissions thresholds to trigger permitting requirements, which may be determined on a case-by- case basis. The commenter (1090) concluded that it is plausible that the EPA’s aggregation polic y may apply to some subset of RICE units.

Response : Questions about whether specific sources shoul d be aggregated will be addressed on a sitespecific basis.278 10.7.9 Comment : One commenter (936) asked why the requirem ents for area and major source engines could not be separated into two rules because this would make reading and finding the requirements for any specific regulated unit much simpler.

Response : The EPA has developed a rule that it believe s is as clear as possible, given the timeframe available and how the different parts of the regulati on has been developed (i.e., over a number of years, addressing different engines each time). Considering that there are engines at major and area sources that are subject to the same requirements in some cas es, it has made sense to pr esent the requirements in one location (for example, in Table 2b of the RI CE NESHAP). There are also many requirements that are the same for engines at major and area source s and to prevent duplication, the requirements are presented once. Also, there are owners and operato rs who have multiple e ngines at many different locations that may be major and area sources and it is r easonable to all the requirements in one place
where the same sources are affected preventing affected parties from having to review to sets of regulations to determine what requi rements apply. Where the requireme nts are different for engines at major sources versus area sources , the EPA has appropriately split the requirements into two tables, namely Tables 2c for major sour ces and Table 2d for area sources.

10.7.10 Comment : One commenter (940) requested that the EPA consider setting a de minimis threshold for exemption from regulation. The commenter (940) st ated that current rules for SI non-emergency 4SRB engines units less than 100 HP located at area sources require maintenance every 1,440 hours. The commenter reported that, since there are no de minimis limits in the re gulation, the requirements apply to any stationary engines less than 100 HP.

Response : The EPA is required to address emissions from all units within the stationary engine source category regardless of size. As such, certain engine s cannot be entirely exempted from regulation, but the Agency has the authority to develop subcategor ies of engines. In developing subcategories for engines, the EPA considered technical criteria such as differences in emission characteristics, mode of operation, size of the engine, and the type of so urce. Based on what is known about engines and on comments received on the 2009 proposal (74 FR 9697), th e EPA determined that an appropriate cutoff that properly takes into account the uniqueness of sm aller engines is 100 HP. The EPA intended for the requirements to apply to engines less than 100 HP also and disagrees with the in clusion of a de minimis threshold in the regulation.279 During the development of the requirements for existing SI engines at area sources, the EPA determined that is was not feasible to prescribe or enforce an emission sta ndard for non-emergency SI engines less than 100 HP. Instead, it was determined th at management practices were more appropriate
and consistent with information received on the proposed rule. Management practices are generally available and cost effective, and following set mainte nance procedures will ensure that emissions are minimized and engines are properly operated. Therefore, the EPA establ ished management practices for existing non-emergency SI engines less than 100 HP at area sources and remain s firm that requiring maintenance practices for these engi nes is justified and reasonable. The EPA specifically intended to require maintenance practices for small engines and determined based on information from engine operators and engine manufacturers that a maintena nce frequency of 1,440 hour s was suitable for small engines. Performing the necessary maintenance activiti es on the oil and filter, spark plugs, and hoses and belts as specified in the rule will ensure prope r engine condition and support reducing HAP and other
emissions.

10.7.11 Comment : One commenter (1141) asked the EPA to pr ovide regulatory relief to owners and operators of model year 2006 RICE engines that were manu factured after April 1, 2006 and that do not meet Tier 1 NSPS requirements. The commenter (1141) said that many operators ordered non-Tier model year 2006 engines that, due to unprecedente d world demand created by worldwide natural disasters, were delayed up to a year and not ma nufactured until after the April 1, 2006 NSPS deadline for complying with Tier 1 emissions requirements. The commenter (1141) said that this situation is unjust.

Response : The requirements in the NSPS for stationary CI engines manufactured after April 1, 2006 are not the focus of this rulemaking, and comments about those requirements are outside the scope of this rulemaking.

10.7.12 Comment : One commenter (1078) urged the EPA to c oordinate with other Agency departments and harmonize different rulemakings with one anot her in order to reduce the economic burden on the regulated community. The comment er (1078) argued that its indus try (rice production) is taking a double hit because it is also being regulated under ne w rules that address spil l prevention, control and countermeasure associated with engines. Accord ing to the commenter (1078), if different EPA280 departments would coordinate and collaborate with each other, the total burden of being subject to multiple rules could be minimized to lessen the burden and economic viabili ty of family farms.

Response : The EPA makes every effort to coordinate with other departments and harmonize different rulemakings to reduce the economic burden on the regulated community.