David M. Friedland

1350 I Street, N.W.

Suite 700

Washington, D.C. 20005-3311

Direct: (202) 789-6047

Fax: (202) 789-6190

dfriedland@bdlaw.com

May 27,2010

Ms. Lisa Jackson, Administrator

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue, Mail Code 1101A

Washington, DC 20460

Re: Petition for Reconsideration of National Emission Standards for Hazardous Air Pollutants

for Reciprocating Internal Combustion Engines, Final Rule

Dear Ms. Jackson:

Please find enclosed a Petition for Reconsideration of the Final Rule on National Emission

Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines, Part II, 75 Fed.

Reg. 9,648 (March 3, 2010).

Please acknowledge receipt of this petition by date-stamping the enclosed extra copy and

returning it to my office in the enclosed self-addressed envelope. Thank you for your attention to this

matter.

Sincerely,

~~ff

Enclosures

David M. Friedland

1350 i Street, N.W.

Suite 700

Washington, D.C. 20005-3311

Direct: (202) 789-6047

Fax: (202) 789-6190

dfriedland@bdlaw.com

May 27,2010

Ms. Lisa Jackson, Administrator

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue, Mail Code 1101A

Washington, DC 20460

Re: Petition for Reconsideration of National Emission Standards for Hazardous Air Pollutants

for Reciprocating Internal Combustion Engines, Final Rule

Dear Ms. Jackson:

Please find enclosed a Petition for Reconsideration of the Final Rule on National Emission

Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines, Par II, 75 Fed.

Reg. 9,648 (March 3, 2010).

Please acknowledge receipt of this petition by date-stamping the enclosed extra copy and

returng it to my office in the enclosed self-addressed envelope. Than you for your attention to this

matter.

Sincerely,

~ßff

Enclosures
BEFORE THE ADMINISTRATOR

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

)

In the Matter of the Final Rule: )

)

National Emission Standards for Hazardous)

Air Pollutants for Reciprocating Internal )

Combustion Engines )

------------- )

RIN 2060-AP36

EPA Docket No. OAR-2008-0708

PETITION FOR RECONSIDERATION

Pursuant to Section 307(d)(7)(B) of the Clean Air Act, 42 U.S.C. § 7607(d)(7)(B),

CPower, Inc. ("CPower"), EnergyConnect, Inc. ("EnergyConnect"), EnerNOC, Inc.

("EnerNOC"), and Innoventive Power, LLC ("Innoventive") (collectively the "Companies")

hereby petition the Administrator of the United States Environmental Protection Agency

("EPA") to reconsider portions of the final rule National Emission Standards for Hazardous Air

Pollutants ("NESHAPS") for Reciprocating Internal Combustion Engines (the "Final Rule"),

published in the Federal Register at 75 Fed. Reg. 9,648 (March 3, 2010). As set forth in detail

below, the Companies request that EPA reconsider the italicized language below from

§ 63.6640(f)(4) of the Final Rule that limits engines used in emergency demand response ("DR")

programs to a maximum of 15 hours per year:

The 50 hours per year for non-emergency situations cannot be used for peak

shaving or to generate income for a facility to supply power to an electric grid

or otherwise supply power as part of a financial arrangement with another

entity; except that owners and operators may operate the emergency engine

for a maximum of 15hours per year as part of a DR program if the regional

transmission organization or equivalent balancing authority and transmission

operator has determined there are emergency conditions that could lead to a

potential electrical blackout, such as unusually low frequency, equipment

overload, capacity or energy deficiency, or unacceptable voltage level.

BEFORE THE ADMINISTRATOR

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

)

In the Matter of the Final Rule: )

)

National Emission Standards for Hazardous)

Air Pollutants for Reciprocating Internal )

Combustion Engines )

)

RI 2060-AP36

EPA Docket No. OAR-2008-0708

PETITION FOR RECONSIDERATION

Pursuant to Section 307(d)(7)(B) of the Clean Air Act, 42 U.S.C. § 7607(d)(7)(B),

CPower, Inc. ("CPower"), EnergyConnect, Inc. ("EnergyConnect"), EnerNOC, Inc.

("EnerNOC"), and Innoventive Power, LLC ("Innoventive") (collectively the "Companies")

hereby petition the Administrator of the United States Environmental Protection Agency

("EPA") to reconsider portions 9fthe final rule National Emission Stadards for Hazardous Air

Pollutants ("NESHAS") for Reciprocating Internal Combustion Engines (the "Final Rule"),

published in the Federal Register at 75 Fed. Reg. 9,648 (March 3, 2010). As set forth in detail

below, the Companies requ,est that EPA reconsider the italicized language below from

§ 63.6640(f)(4) of the Final Rule that limits engines used in emergency demand response ("DR")

programs to a maximum of 15 hours per year:

The 50 hours per year for non-emergency situations canot be used for peak

shaving or to generate income for a facility to supply power to an electric grid

or otherwse supply power as part of a financial arrangement with another

entity; except that owners and operators may operate the emergency engine

for a maximum of 15 hours per year as par of a DR program if the regional

transmission organization or equivalent balancing authority and transmission

operator has determined there are emergency conditions that could lead to a

potential electrical blackout, such as unusually low frequency, equipment

overload, capacity or energy deficiency, or unacceptable voltage leveL.
The Companies request that the italicized language above be revised to read, "may

operate the emergency engine for a maximum of 60 hours per year or the minimum hours

required by Independent System Operator tariff, whichever is less."

1. THE PETITIONERS

The Companies provide demand response and energy management solutions for

businesses, institutions, and power grid operators. The Companies' operations rely in part on the

use of generators that would be subject to the rule in question.

II. GROUNDS FOR RECONSIDERATION

EPA's proposed rule (74 Fed. Reg. 9,698 (March 5, 2009)) did not include language to

cover emergency engines participating in emergency DR. The Companies and others submitted

comment letters to EPA requesting that emergency DR be included as part of the definition of

"emergency" in the Final Rule, referencing studies that show that the operation of backup

generation as a "last resort" asset not only improves system reliability, but also provides

significant environmental benefits, as compared with the operation of all backup generation in a

region once the grid fails. Emergency engines participating in emergency DR programs provide

a critical service in stabilizing the electric grid on the rare occasions when the grid is about to

fail. Emergency generators are turned on when an Independent System Operator ("ISO")

declares an emergency DR event, thereby lessening the need for more power on the grid. But

emergency DR programs are more than just turning on emergency diesel generators -- the

programs also include curtailment (e.g., companies reducing their HV AC and lighting loads,

2

The Companies request that the italicized language above be revised to read, "may

operate the emergency engine for a maximum of 60 hours per year or the minimum hours

required by Independent System Operator tariff, whichever is less."

1. THE PETITIONERS

The Companies provide demand response and energy management solutions for

businesses, institutions, and power grid operators. The Companies' operations rely in part on the

use of generators that would be subject to the rule in question.

II. GROUNDS FOR RECONSIDERATION

EPA's proposed rule (74 Fed. Reg. 9,698 (March 5, 2009)) did not include language to

cover emergency engines paricipating in emergency DR. The Companies and others submitted

comment letters to EPA requesting that emergency DR be included as part of the definition of

"emergency" in the Final Rule, referencing studies that show that the operation of backup

generation as a "last resort" asset not only improves system reliability, but also provides

significant environmental benefits, as compared with the operation of all backup generation in a

region once the grid fails. Emergency engines participating in emergency DR programs provide

a critical service in stabilizing the electric grid on the rare occasions when the grid is about to

faiL. Emergency generators are tured on when an Independent System Operator ("ISO")

declares an emergency DR event, thereby lessening the need for more power on the grid. But

emergency DR programs are more than just turing on emergency diesel generators -- the

programs also include curtailment (e.g., companies reducing their HV AC and lighting loads,

2
manufacturing facilities shutting off their machines, etc.) of demand from the electric power grid.

This curtailment results in a reduction of air pollutants during DR events.

The Companies applaud EPA for responding favorably to their comments and including

emergency DR in the Final Rule; however, the Agency capped this use at 15 hours per year,

relying on a comment letter submitted by two ofthe Companies (CPower and Innoventive). We

believe that EPA misinterpreted the comment letter as described in detail below. Moreover,

with the 15 hour restriction, the Final Rule may prevent emergency engines from participating in

emergency DR Programs since the engines may not be able to meet ISO tariff requirements that

specify minimum hours of availability to participate.

Pursuant to 307 (d)(7)(B) of the Clean Air Act, if a petitioner shows "that it was

impracticable to raise [its] objection within [the period for public comment] or if the grounds for

such objection arose after the period for public comment ... and if such objection is of central

relevance to the outcome of the rule, the Administrator shall convene a proceeding for

reconsideration of the rule." 42 U.S.c. § 7607(d)(7)(B). As detailed below, the Companies'

objection to the Final Rule satisfies the terms ofthis provision. Briefly stated, the maximum 15

hours per year limit for emergency DR was not proposed, so there was no basis to foresee that

EPA would spontaneously issue its Final Rule in this way. The 15 hours limit appeared in the

Final Rule after the comment period, so it was impossible to object to it before EPA indicated

that it was considering such a limit. Thus the grounds for this objection arose after the period for

public comment. Moreover the Companies' objections are of central relevance to the outcome of

the Rule because they directly impact the Companies' customers' ability to comply with the

mandates of the Final Rule with emergency engines.

3

manufacturing facilities shutting off their machines, etc.) of demand from the electric power grid.

This curilment results in a reduction of air pollutats during DR events.

The Companies applaud EPA for responding favorably to their comments and including

emergency DR in the Final Rule; however, the Agency capped this use at 15 hours per year,

relying on a comment letter submitted by two ofthe Companies (CPower and Innoventive). We

believe that EPA misinterpreted the comment letter as described in detail below. Moreover,

with the 15 hour restriction, the Final Rule may prevent emergency engines from paricipating in

emergency DR Programs since the engines may not be able to meet iso tariff requirements that

specify minimum hours of availability to participate.

Pursuant to 307 (d)(7)(B) of the Clean Air Act, if a petitioner shows "that it was

impracticable to raise (its) objection within (the period for public comment) or if the grounds for

such objection arose after the period for public comment. . . and if such objection is of central

relevance to the outcome of the rule, the Administrator shall convene a proceeding for

reconsideration of the rule." 42 U.S.c. § 7607(d)(7)(B). As detailed below, the Companies'

objection to the Final Rule satisfies the terms ofthis provision. Briefly stated, the maximum 15

hours per year limit for emergency DR was not proposed, so there was no basis to foresee that

EPA would spontaneously issue its Final Rule in this way. The 15 hours limit appeared in the

Final Rule after the comment period, so it was impossible to object to it before EPA indicated

that it was considering such a limit. Thus the grounds for this objection arose after the period for

public comment. Moreover the Companies' objections are of central relevance to the outcome of

the Rule because they dirèctly impact the Companies' customers' ability to comply with the

mandates of the Final Rule with emergency engines.

3
III. ARGUMENT

EPA should not restrict emergency DR to 15 hours for the following reasons, set forth in

detail below:

A. Emergency DR Programs Benefit the Environment

B. ISOs Must Follow North American Electric Reliability Council Standards When

Dispatching DR for Capacity and Energy Emergencies

C. EPA Appropriately Included Emergency DR Programs in the Final Rule; But the 15 Hour

per Year Limit May Prevent Emergency Engines from Participating in Emergency DR

Programs

D. Emergency DR Programs are Called Rarely, Therefore the Risk That They Will be

Dispatched to Their Maximum Hours is Minimal

E. EPA's Justification for the 15 Hour Limit Reflects a Misinterpretation of Comments

Supporting DR

F. Numerous States Allow Emergency Engines to Participate in Emergency DR; None

Limits Such Participation to 15 Hours

G. EPA Set a Precedent for the Use of Emergency Engines in Emergency DR Programs in

the Mandatory Greenhouse Gas Reporting Final Rule

A. Emergency DR Programs Benefit the Environment

Grid failure affects public health and safety and can cause severe environmental damage.

During the August 2003 eastern blackout, many millions of gallons of untreated sewage from

New York City were discharged into rivers as a result of the power failure. In addition, in the

event of a blackout all backup generators in the affected area will be triggered on and they may

run for hours or days. Emergency DR programs therefore protect the environment by avoiding

rotating or wholesale blackouts.

4

III. ARGUMENT

EPA should not restrict emergency DR to 15 hours for the following reasons, set forth in

detail below:

A. Emergency DR Programs Benefit the Environment

B. ISOs Must Follow North American Electric Reliability Council Standards When

Dispatching DR for Capacity and Energy Emergencies

C. EPA Appropriately Included Emergency DR Programs in the Final Rule; But the 15 Hour

per Year Limit May Prevent Emergency Engines from Paricipating in Emergency DR

Programs

D. Emergency DR Programs are Called Rarely, Therefore the Risk That They Wil be

Dispatched to Their Maximum Hours is Minimal

E. EPA's Justification for the 15 Hour Limit Reflects a Misinterpretation of Comments

Supporting DR

F. Numerous States Allow Emergency Engines to Participate in Emergency DR; None

Limits Such Paricipation to 15 Hours

G. EPA Set a Precedent for the Use of Emergency Engines in Emergency DR Programs in

the Mandatory Greenhouse Gas Reporting Final Rule

A. Emergency DR Programs Benefit the Environment

Grid failure affects public health and safety and can cause severe environmental damage.

During the August 2003 eastern blackout, many milions of gallons of untreated sewage from

New York City were discharged into rivers as a result of the power failure. In addition, in the

event of a blackout all backup generators in the affected area will be triggered on and they may

run for hours or days. Emergency DR programs therefore protect the environment by avoiding

rotating or wholesale blackouts.

4
A report prepared by Synapse Energy Economics, Inc. for EPA assessed the impacts of

DR and energy efficiency programs in New England using an electric system dispatch model.l

The report modeled a hypothetical near-term year in New England using projected 2006 fuel

prices and loads. The modeling included 500 MW of DR capability: 60 percent load response

and 40 percent generation. The report concluded that when DR is used for reserves there are

significant decreases of criteria pollutant emissions, even when it is assumed that the DR is all

diesel (oxides of nitrogen decreased 23 tons, sulfur dioxide decreased 216 tons, carbon dioxide

decreased 31,400 tons, particulate matter 2.5 microns or less decreased 12.5 tons, and

particulate matter decreased 21.2 tons). Id at 13. So, even assuming all DR is from diesel-fired

generators, the report showed a net benefit in air quality.i

The report goes on to state, "when the DR resource is used to meet reserve requirements,

the result is more efficient unit commitment, reduced operation of oil- and gas-fired steam units

and increased operation of combined-cycle units in New England." Id at 2. And finally, the

report noted that "New England has a small amount of quick-start capacity relative to the

regional peak load compared to most other control areas. Many analysts have noted that this

requires large power plants to operate more than they would otherwise have to in order to

maintain sufficient operating reserves - capacity that can be provided quickly in response to

unplanned losses of capacity. A key goal of this work for EPA was to verify that large units

1 See Attachment 1, Modeling Demand Response and Air Emissions in New England by Geoff

Keith, Bruce Biewald, David White and Mike Drunsic, revised September 4,2003.

2 Moreover, emergency DR programs involve more than just turning on emergency diesel

generators. They also include curtailment (e.g., companies reducing their HV AC and lighting

loads, manufacturing facilities shutting off their machines, etc.) of demand by customers

participation in the program. Such curtailment results in a direct reduction of air pollutants

during DR events by reducing overall demand on the system.

5

A report prepared by Synapse Energy Economics, Inc. for EPA assessed the impacts of

DR and energy efficiency programs in New England using an electric system dispatch model.l

The report modeled a hypothetical near-term year in New England using projected 2006 fuel

prices and loads. The modeling included 500 MW of DR capability: 60 percent load response

and 40 percent generation. The report concluded that when DR is used for reserves there are

significant decreases of criteria pollutant emissions, even when it is assumed that the DR is all

diesel (oxides of nitrogen decreased 23 tons, sulfu dioxide decreased 216 tons, carbon dioxide

decreased 31,400 tons, pariculate matter 2.5 microns or less decreased 12.5 tons, and

pariculate matter decreased 21.2 tons). Id at 13. So, even assuming all DR is from diesel-fired

generators, the report showed a net benefit in air quality.2

The report goes on to state, "when the DR resource is used to meet reserve requirements,

the result is more effcient unit commitment, reduced operation of oil- and gas-fired steam units

and increased operation of combined-cycle units in New England." Id at 2. And finally, the

report noted that "New England has a small amount of quick-sta capacity relative to the

regional peak load compared to most other control areas. Many analysts have noted that this

requires large power plants to operate more than they would otherwise have to in order to

maintain sufficient operating reserves - capacity that can be provided quickly in response to

unplaned losses of capacity. A key goal of this work for EPA was to verify that large units

1 See Attachment 1, Modeling Demand Response and Air Emissions in New England by Geoff

Keith, Bruce Biewald, David Whte and Mike Drunsic, revised September 4,2003.

2 Moreover, emergency DR programs involve more than just tuing on emergency diesel

generators. They also include curtailment (e.g., companies reducing their HV AC and lighting

loads, manufacturing facilities shutting off their machines, etc.) of demand by customers

paricipation in the program. Such curilment results in a direct reduction of air pollutants

during DR events by reducing overall demand on the system.

5
were indeed being operated more than necessary in New England to meet reserve requirements,

to gauge the probable emission impacts of this dynamic, and to estimate potential emission

reductions that additional DR could provide ifit were used to meet operating reserve

requirements." Id., page 4.

In short, emergency DR provides significant environmental benefits.

B. ISOs Must Follow North American Electric Reliability Council Standards When

Dispatching DR for Capacity and Energy Emergencies

The North American Electric Reliability Council ("NERC") requires System Operators

including Balancing Authorities", Reliability Coordinators", and Load-Serving Entities' to

develop and implement formal plans for Capacity and Energy Emergencies", and precisely

execute these plans when calling emergency DR events. See Attachment 27, NERC Standard

3 The NERC defines a Balancing Authority as "the responsible entity that integrates

resource plans ahead of time, maintains load-interchange-generation balance within a Balancing

Authority Area, and supports Interconnection frequency in real time."

4 The NERC defines a Reliability Coordinator as "[t]he entity that is the highest level of

authority who is responsible for the reliable operation of the Bulk Electric System, has the Wide

Area view of the Bulk Electric System, and has the operating tools, processes and procedures,

including the authority to prevent or mitigate emergency operating situations in both next day

analysis and real-time operations. The Reliability Coordinator has the purview that is broad

enough to enable the calculation of Interconnection Reliability Operating Limits, which may be

based on the operating parameters of transmission systems beyond any Transmission Operator's

vision."

5 NERC defines a Load-Serving Entity as an organization that "secures energy and

transmission service (and related Interconnected Operations Services) to serve the electrical

demand and energy requirements of its end use customers."

6 Independent System Operators such as ERCOT, ISO-NE, and PJM fit this definition.

7 Since the attachments are voluminous, only pertinent sections are being provided. We

can provide copies of the full attachments to EPA if requested.

6

were indeed being operated more than necessary in New England to meet reserve requirements,

to gauge the probable emission impacts of this dynamic, and to estimate potential emission

reductions that additional DR could provide ifit were used to meet operating reserve

requirements." Id, page 4.

In short, emergency DR provides significant environmental benefits.

B. ISOs Must Follow North American Electric Reliabilty Council Standards When

Dispatching DR for Capacity and Energy Emergencies

The Nort American Electric Reliability Council ("NERC") requires System Operators

including Balancing Authorities3, Reliability Coordinators4, and Load-Serving Entities5 to

develop and implement formal plans for Capacity and Energy Emergencies6, and precisely

execute these plans when callng emergency DR events. See Attachment 27, NERC Standard

3 The NERC defines a Balancing Authority as "the responsible entity that integrates

resource plans ahead of time, maintains load-interchange-generation balance within a Balancing

Authority Area, and supports Interconnection frequency in real time."

4 The NERC defines a Reliability Coordinator as "(t)he entity that is the highest level of

authority who is responsible for the reliable operation of the Bulk Electric System, has the Wide

Area view of the Bulk Electric System, and has the operating tools, processes and procedures,

including the authority to prevent or mitigate emergency operating situations in both next day

analysis and real-time operations. The Reliability Coordinator has the puriew that is broad

enough to enable the calculation of Interconnection Reliability Operating Limits, which may be

based on the operating parameters of transmission systems beyond any Transmission Operator's

vision."

5 NERC defines a Load-Serving Entity as an organization that "secures energy and

transmission service (and related Interconnected Operations Services) to serve the electrical

demand and energy requirements of its end use customers."

6 Independent System Operators such as ERCOT, ISO-NE, and PJM fit this definition.

7 Since the attchments are voluminous, only pertinent sections are being provided. We

can provide copies of the full attachments to EPA if requested.

6
EOP-002-2.1 - Capacity and Energy Emergencies. The Standards include Energy Emergency

Alert Levels; Level 1 measures are implemented when a System Operator foresees the potential

inability to meet required operating reserve levels, while Alert 2 ("EEA Alert 2") - which

includes demand-side management along with public appeals to reduce demand, voltage

reductions, interruption of non-firm end-use loads in accordance with applicable contracts", and

utility load conservation measures - is only called when a Balancing Authority cannot meet

actual energy requirements. Specifically, System Operators call emergency DR programs to

EEA Alert 2 NERC standards when there is the real potential for blackouts due to insufficient

energy supply. When EEA Alert 2 is called the System Operator must make use of all available

resources, regardless of the cost of those resources, including all generation, power purchases,

recall of non-firm power sales and curtailment of all contractually interruptible loads, and

depletion of operating reserves. The System Operator must promptly report operation in any

emergency state to the NERC.9

System Operation in the state of a Capacity and/or Energy Emergency is subject to the

plans described above, are costly to the operator, and must be rigorously executed and then

evaluated. As part of this process, emergency DR programs are only called under very specific,

planned, and controlled circumstances. Accordingly, EPA can be assured that if it were to

increase the 15 hour limit to 60 hours, 1S0s would not have the discretion to dispatch these

resources more frequently to take advantage of the greater hours.

8 For emergency, not economic, reasons.

9 The final step after EEA Alert 2, is EEA Alert 3, which entails the involuntary shedding

of firm customer loads. These are often referred to as "rolling blackouts" and they are the last

line of defense to prevent the entire interconnected system from failing.

7

EOP-002-2.1 - Capacity and Energy Emergencies. The Standards include Energy Emergency

Alert Levels; Level 1 measures are implemented when a System Operator foresees the potential

inability to meet required operating reserve levels, while Alert 2 ("EEA Alert 2") - which

includes demand-side management along with public appeals to reduce demand, voltage

reductions, interruption of non-firm end-use loads in accordance with applicable contracts8, and

utility load conservation measures - is only called when a Balancing Authority canot meet

actual energy requirements. Specifically, System Operators call emergency DR programs to

EEA Alert 2 NERC standards when there is the real potential for blackouts due to insuffcient

energy supply. When EEA Alert 2 is called the System Operator must make use of all available

resources, regardless of the cost of those resources, including all generation, power purchases,

recall of non-firm power sales and curtailment of all contractually interrptible loads, and

depletion of operating reserves. The System Operator must promptly report operation in any

emergency state to the NERC.9

System Operation in the state of a Capacity and/or Energy Emergency is subject to the

plans described above, are costly to the operator, and must be rigorously executed and then

evaluated. As part of this process, emergency DR programs are only called under very specific,

planed, and controlled circumstances. Accordingly, EPA can be assured that if it were to

increase the 15 hour limit to 60 hours, ISOs would not have the discretion to dispatch these

resources more frequently to tae advantage of the greater hours.

8 For emergency, not economic, reasons.

9 The final step after EEA Alert 2, is EEA Alert 3, which entails the involunta shedding

of firm customer loads. These are often referred to as "rolling blackouts" and they are the last

line of defense to prevent the entire interconnected system from failng.

7
C. EPA Appropriately Included Emergency DR Programs in the Final Rule; But the 15

Hour per Year Limit May Prevent Emergency Engines from Participating in

Emergency DR Programs

The Final Rule appropriately defines emergency DR as used when "the regional

transmission organization or equivalent balancing authority and transmission operator has

determined there are emergency conditions that could lead to a potential electrical blackout, such

as unusually low frequency, equipment overload, capacity or energy deficiency, or unacceptable

voltage level." 40 C.F.R. § 63.6640(f)(4); 75 Fed. Reg. at 9677. However, by placing a 15

hours per year maximum on emergency DR use, the Final Rule may prevent emergency engines

from participating in emergency DR programs since the engines may not be able to meet ISO

tariff requirements that specify minimum hours of availability to participate. 10

FERC permits each ISO/RTO to establish its own criteria for DR commitments to

respond to emergency events. The variations reflect regional variations on overall system

resources and load patterns. However, all ISOIRTOs target similar overall reliability criteria

which call for resources (including DR resources) adequate to limit manual load dumps

(controlled blackouts) to one event in ten years.

1. The PJM FERC Tariff for the Emergency Load Response Program Requires a Minimum

Availability of 60 Hours

10 If the engines cannot meet the 15 hour restriction requirements, they would have to

comply with the emission limits for non-emergency engines. These limits would require the

installation of diesel oxidation catalysts, crankcase ventilation systems or open crankcase

filtration emission control systems, in addition to periodic stack testing. These requirements

could cause many customers to drop out of the emergency DR programs because they would be

unwilling to make the capital investment, together with engineering, testing, and ongoing

monitoring, recordkeeping and reporting to meet these requirements.

8

C. EPA Appropriately Included Emergency DR Programs in the Final Rule; But the 15

Hour per Year Limit May Prevent Emergency Engines from Participating in

Emergency DR Programs

The Final Rule appropriately defines emergency DR as used when "the regional

transmission organization or equivalent balancing authority and transmission operator has

determined there are emergency conditions that could lead to a potential electrical blackout, such

as unusually low frequency, equipment overload, capacity or energy deficiency, or unacceptable

voltage leveL." 40 C.F.R. § 63.6640(f)(4); 75 Fed. Reg. at 9677. However, by placing a 15

hours per year maximum on emergency DR use, the Final Rule may prevent emergency engines

from paricipating in emergency DR programs since the engines may not be able to meet iso

tariff requirements that specify minimum hours of availability to paricipate. 

10

FERC permits each ISO/RTO to establish its own criteria for DR commitments to

respond to emergency events. The varations reflect regional variations on overall system

resources and load patterns. However, all ISOIRTOs taget similar overall reliability criteria

which call for resources (including DR resources) adequate to limit manual load dumps

(controlled blackouts) to one event in ten years.

1. The P JM FERC Tarff for the Emergency Load Response Program Requires a Minimum

Availabilty of 60 Hours

lO If the engines canot meet the 15 hour restriction requirements, they would have to

comply with the emission limits for non-emergency engines. These limits would require the

installation of diesel oxidation catalysts, crancase ventilation systems or open crancase

fitration emission control systems, in addition to periodic stack testing. These requirements

could cause many customers to drop out of the emergency DR programs because they would be

unwiling to make the capital investment, together with engineering, testing, and ongoing

monitoring, recordkeeping and reporting to meet these requirements.

8
PJM ("Pennsylvania Jersey Maryland") Interconnection, L.L.C. ("PJM") is the ISO

responsible for operating the electric grid for the mid-Atlantic/midwest states (Pennsylvania,

New Jersey, Delaware, Maryland, Virginia west to parts of Indiana, Illinois, and Michigan).

Under PJM Manual 13: Emergency Operations, PJM operates the Emergency Load Response

Program ("ELRP") when energy from generation resources is projected to be inadequate to

maintain sufficient reserves or voltage to avoid blackouts. See Attachment 3.

Under PJM's FERC Electric Tariff, Sixth Revised Volume No.1, Third Revised Sheet

No. 419 ofPJM Emergency Load Response Program (see Attachment 4), "[a]ny end-use

customer intending to run distributed generating units in support of local load for the purpose of

participating in this program must represent in writing to PJM that it holds all applicable

environmental and use permits for running those generators. Continuing participation in this

program will be deemed as a continuous representation by the owner that each time its

distributed generating unit is run in accordance with this program, it is being run-in compliance

with all applicable permits, including any emissions, run-time limit or other constraint on plant

operations that may be imposed by such permits."

Under PJM's Reliability Assurance Agreement Among Load Serving Entities in the PJM

Region, Rate Schedule FERC No. 44, Second Revised Sheet No. 33, "[a] Party must agree to

reserve for interruption at the direction of the Office of the Interconnection, at least 10

interruptions per Planning Period." See Attachment 5, Condition A.2. In addition, "[a] Party

must agree to reserve interruptions of at least 6-hour duration." Id. at Second Revised Sheet No.

34, Condition A. 7. Thus, in order for emergency engines to participate in the ELRP, they must

be available to operate for up to 60 hours (10 interruptions times 6 hours duration per

interruption) per year.

9

PJM ("Pennsylvania Jersey Maryland") Interconnection, L.L.C. ("PJM") is the ISO

responsible for operating the electric grid for the mid-Atlantic/midwest states (Pennsylvana,

New Jersey, Delaware, Maryland, Virginia west to pars of Indiana, Ilinois, and Michigan).

Under PJM Manual 13: Emergency Operations, PJM operates the Emergency Load Response

Program ("ELRP") when energy from generation resources is projected to be inadequate to

maintain sufficient reserves or voltage to avoid blackouts. See Attachment 3.

Under PJM's FERC Electric Tariff, Sixth Revised Volume No.1, Third Revised Sheet

No. 419 ofPJM Emergency Load Response Program (see Attachment 4), "(a)ny end-use

customer intending to run distributed generating units in support of local load for the purpose of

participating in this program must represent in writing to PJM that it holds all applicable

environmental and use pelIits for running those generators. Continuing paricipation in this

program wil be deemed as a continuous representation by the owner that each time its

distributed generating unit is run in accordance with this program, it is being ru-in compliance

with all applicable permits, including any emissions, ru,.time limit or other constraint on plant

operations that may be imposed by such permits."

Under PJM's Reliability Assurance Agreement Among Load Serving Entities in the PJM

Region, Rate Schedule FERC No. 44, Second Revised Sheet No. 33, "(a) Par must agree to

reserve for interrption at the direction of the Office of the Interconnection, at least 10

interrptions per Planing Period." See Attachment 5, Condition A.2. In addition, "(a) Party

must agree to reserve interrptions of at least 6-hour duration." Id at Second Revised Sheet No.

34, Condition A. 7. Thus, in order for emergency engines to participate in the ELRP, they must

be available to operate for up to 60 hours (10 interrptions times 6 hours duration per

interrption) per year.

9
2. The ERCOT FERC Tariff for the Emergency Interruptible Load Service Program

Requires a Minimum Availability of 24 Hours per Year

The Electric Reliability Council of Texas ("ERCOT") is the ISO responsible for the

electric grid in much of Texas. ERCOT operates the Emergency Interruptible Load Service

("ElLs") Program to be activated at Emergency Alert ("EEA") Leve12B:

[fjollowing deployment of the measures associated with EEA Levell and Leve12A,

ERCOT will deploy all available Emergency Interruptible Load Service (ElLS)

Resources as a single block via a single Verbal Dispatch Instruction to all QSES11

providing ElLS.

See Attachment 6 ERCOT Protocols Section 5: Dispatch, page 5-15.

The next EEA is Level 3 which directs "all TDSPs 12 and their agents to shed firm Load,

in one hundred (100) megawatt (MW) blocks, distributed as agreed and documented in the

ERCOT Operation procedures in order to maintain a steady state system frequency of 59.8 Hertz

(Hz)." See Attachment.o, Id., page 5-15., In other words, ElLS is the last tool that ERCOT can

deploy before going to rotating blackouts.

Under ERCOT Protocols Section 6: Ancillary Services, "[a]n ElLS Resource shall be

subject to a maximum of two (2) Dispatch Instructions per ElLS Contract Period. Additionally,

an ElLS Resource shall be subject to a maximum of eight (8) hours of Dispatch Instructions per

ElLS Contract Period, unless an ElLS deployment is still in effect when the eighth hour lapses

(in which case the ElLS Resource must follow the Dispatch Instruction until ERCOT releases the

ElLS Resource)." See Attachment 7, ERCOT Protocols, Section 6: Ancillary Services, page 6-

42, Item (15). Since there are three contract periods per year (see Attachment 8, Emergency

11 Qualified Scheduling Entity.

12 Transmission and Distribution Service Provider.

10

2. The ERCOT FERC Tariff for the Emergency Interrptible Load Service Program

Requires a Minimum Availability of 24 Hours per Year

The Electric Reliability Council of Texas ("ERCOT") is the ISO responsible for the

electric grid in much of Texas. ERCOT operates the Emergency Interruptible Load Service

("EILs") Program to be activated at Emergency Alert ("EEA") Level2B:

(fJollowing deployment of the measures associated with EEA Levell and Leve12A,

ERCOT wil deploy all available Emergency Interrptible Load Service (ElLS)

Resources as a single block via a single Verbal Dispatch Instruction to all QSES11

providing EILS.

See Attachment 6 ERCOT Protocols Section 5: Dispatch, page 5-15.

The next EEA is Level 3 which directs "all TDSPs 12 and their agents to shed firm Load,

in one hundred (100) megawatt (MW) blocks, distributed as agreed and documented in the

ERCOT Operation procedures in order to maintain a steady state system frequency of 59.8 Hertz

(Hz)." See Attchment6, Id, page 5-15., In other words, EILS is the last tool that ERCOT can

deploy before going to rotating blackouts.

Under ERCOT Protocols Section 6: Ancilar Services, "(a)n EILS Resource shall be

subject to a maximum of two (2) Dispatch Instructions per ElLS Contract Period. Additionally,

an EILS Resource shall be subject to a maximum of eight (8) hours of Dispatch Instructions per

ElLS Contract Period, unless an ElLS deployment is stil in effect when the eighth hour lapses

(in which case the EILS Resource must follow the Dispatch Instrction until ERCOT releases the

ElLS Resource)." See Attachment 7, ERCOT Protocols, Section 6: Ancilar Services, page 6-

42, Item (15). Since there are three contract periods per year (see Attachment 8, Emergency

ii Qualified Scheduling Entity.

12 Transmission and Distribution Service Provider.

10
Operations for ERCOT, Chapter 25, Subchapter S, § 25.507(a)(1)), this means that to participate

in ElLS for a full year would require being available for up to 24 hours per year.

3. The ISO New England FERC Tariff for ISO New England Operating Procedure No.4

Action During a Capacity Deficiency Requires No Minimum Availability; Studies Show

It is Expected to be Called Between Six and 55 Hours in the 2013-2014 Planning Year

ISO New England ("ISO-NE") is the ISO responsible for the electric grid in New

England. ISO-NE's formal plan for operating in Energy and Capacity Emergencies is its

Operating Procedure No.4, "Action during a Capacity Deficiency," which is activated during

times of electric supply deficiencies.

Under the ISO-NE tariff a "[r]eal-time Emergency Generation Resource is Distributed

Generation whose Federal, State, and/or local air quality permits limit operation in response to

requests from the ISO to the time when the ISO implements voltage reductions of five percent of

normal operating voltage that require more than 10 minutes to implement. A Real-Time

Emergency Generation Resource must be capable of: (i) curtailing its end-use electric

consumption from the New England grid within 30 minutes of receiving a Dispatch Instruction;

and (ii) continuing that curtailment until receiving a Dispatch Instruction to restore

consumption." See Attachment 9, ISO New England, Inc., Transmission, Markets and Services

TariffFERC Electric Tariff No. 3, Appendix E, effective Feb. 1,2005.

Operation of any part of the New England electrical system under Operating Procedure 4

with voltage reduction measures means that the system (or a portion thereof) is operating in a

NERC defined grid emergency, specifically following the previously mentioned NERC Standard

EOP-002-2.1 - Capacity and Energy Emergencies. When ISO-NE institutes a five percent

voltage reduction across the affected grid sections and either concurrently, or subsequently, calls

for operation of emergency generator-based demand response, it is clearly operating under a

11

Operations for ERCOT, Chapter 25, Subchapter S, § 25.507(a)(1)), this means that to participate

in EILS for a full year would require being available for up to 24 hours per year.

3. The iso New England FERC Tariff for iSO New England Operating Procedure NO.4

Action During a Capacity Deficiency Requires No Minimum Availability; Studies Show

It is Expected to be Called Between Six and 55 Hours in the 2013-2014 Planing Year

iSO New England ("ISO-NE") is the iSO responsible for the electric grid in New

England. ISO-NE's formal plan for operating in Energy and Capacity Emergencies is its

Operating Procedure No.4, "Action during a Capacity Deficiency," which is activated during

times of electric supply deficiencies.

Under the ISO-NE tariff a "(r)eal-time Emergency Generation Resource is Distributed

Generation whose Federal, State, and/or local air quality permits limit operation in response to

requests from thè iSO to the time when the iSO implements voltage reductions of five percent of

normal operating voltage that require more than 10 minutes to implement. A Real-Time

Emergency Generation Resource must be capable of: (i) curilng its end-use electric

consumption from the New England grid within 30 minutes of receiving a Dispatch Instrction;

and (ii) continuing that curailment until receiving a Dispatch Instruction to restore

consumption." See Attachment 9, iso New England, Inc., Transmission, Markets and Services

TariffFERC Electric Tariff No. 3, Appendix E, effective Feb. 1,2005.

Operation of any par of the New'England electrical system under Operating Procedure 4

with voltage reduction measures means that the system (or á portion thereof) is operating in a

NERC defined grid emergency, specifically following the previously mentioned NERC Standard

EOP-002-2.l - Capacity and Energy Emergencies. When ISO-NE institutes a five percent

voltage reduction across the affected grid sections and either concurently, or subsequently, calls

for operation of emergency generator-based demand response, it is clearly operating under a

11
NERC-defined grid emergency 13 • As such, the system is designed, and capacity procured, for

this operational state to be a "last resort." ISO-NE's Operable Capacity Analysis for the 2013-

2014 Capacity Commitment period (6/1/2013 to 5/3112014) notes that under the "SO/50" load

forecast (i.e., the load forecast with a 50 percent chance of occurring) that backup generation

resources for DR would be expected to be called for 6 hours over the twelve month period, and

under the "90/10" load forecast (i.e., the load forecast with a 10 percent chance of occurring) that

backup generation resources for DR would be expected to be called for 55 hours over the twelve

month period. 14 Thus, for engines to participate in the ISO-NE programs, DR providers must be

reasonably sure that their assets can perform for this amount of time.

4. The New York Independent System Operator ("NYISO") Emergency Operating

Procedures Manual for its Special Case Resource ("SCR") Program Requires No

Minimum Availability, but Provides That a NERC EEA Level 2 State Will be in

Effect Before Generators Enrolled in the SCR Program are Activated

NYISO is the ISO responsible for the electric grid in New York. NYISO' s formal plan

for operating in emergencies that may trigger activation of its demand response programs is

contained in its Emergency Operating Procedures ("EOP") Manual, specifically Section 4.4

"Operating Reserve Deficiency."

Section 4.4.1 of the EOP Manual provides that when the NYISO foresees a possible

shortage of operating reserves for the following day it will:

13 Under this operating condition ISO-NE is also required to "[a]lert the New York

Independent System Operator (NYISO) that sharing of reserves within Northeast Power

Coordinating Council (NPCC) may be required." See Attachment 10, ISO New England

Operating Procedure No.4, Action During a Capacity Deficiency.

14 ISO-NE's Demand Resources Operable Capacity Analysis "provides a system-wide

and load zone forecast of potential DR usage in the Commitment Period prior to the FCA and

provides information for use during the auction process to aid in determining potential Demand

Resource operation." See http://www.isone.comlmarkets/othrrnkts data/fcmlreports/demand res/.

12

NERC-defined grid emergency 

13 . As such, the system is designed, and capacity procured, for

this operational state to be a "last resort." ISO-NE's Operable Capacity Analysis for the 2013-

2014 Capacity Commitment period (6/1/2013 to 5/31/2014) notes that under the "50/50" load

forecast (i.e., the load forecast with a 50 percent chance of occurring) that backup generation

resources for DR would be expected to be called for 6 hours over the twelve month period, and

under the "90/10" load forecast (i.e., the load forecast with a 10 percent chance of occuring) that

backup generation resources for DR would be expected to be called for 55 hours over the twelve

month period. 14 Thus, for engines to paricipate in the ISO-NE programs, DR providers must be

reasonably sure that their assets can perform for this amount of time.

4. The New York Independent System Operator ("NYISO") Emergency Operating

Procedures Manual for its Special Case Resource ("SCR") Program Requires No

Minimum A vail ability, but Provides That a NERC EEA Level 2 State Wil be in

Effect Before Generators Enrolled in the SCR Program are Activated

NYISO is the ISO responsible for the electric grid in New York. NYISO' s formal plan

for operating in emergencies that may trigger activation of its demand response programs is

contained in its Emergency Operating Procedures ("EOP") Manual, specifically Section 4.4

"Operating Reserve Deficiency."

Section 4.4.1 of the EOP Manual provides that when the NYISO foresees a possible

shortge of operating reserves for the following day it wil:

13 Under this operating condition ISO-NE is also required to "(a)lert the New York

Independent System Operator (NYISO) that sharng of reserves within Northeast Power

Coordinating Council (NPCC) may be required." See Attachment 10, ISO New England

Operating Procedure No.4, Action During a Capacity Deficiency.

14 ISO-NE's Demand Resources Operable Capacity Analysis "provides a system-wide

and load zone forecast of potential DR usage in the Commitment Period prior to the FCA and

provides information for use during the auction process to aid in determining potential Demand

Resource operation." See http://ww.isone.com/markets/othrkts data/fcm/reports/demand res/.

12
9. Notify the appropriate Market Participants to prepare to make

Special Case Resources (lCAP) and EDRP resources available for

the next day.

10. Notify the appropriate Market Participants to prepare to make

the EDRP resources available for the next day.

11. Initiate an "Emergency Energy Alert" in accordance with

Appendix 5C, "Energy Emergency Alerts" for the next day via the

SCIS; follow NPCC notification requirement (C-19); and notify

Communications Division, PSC, and Department of Environmental

Conservation (DEC). 15

In the event that NYISO does not have day-ahead warning that a reserve shortage may

occur and instead faces and actual in-day shortage of operating reserves, Section 4.4.2 of the

EOP Manual is invoked:

9. Initiate an "Emergency Energy Alert" in accordance with NERC

Appendix 5C, "Energy Emergency Alerts" for today via the SeIS;

follow NPCC notification requirements (C-19); and notify

Communications Division, PSC, and DEC.

10. Direct Market Participants to activate Special Case Resources

(lCAP) to start at XXXX hrs and end at XXXX hrs.

11. Direct Market Participants to activate EDRP to start at XXXX

hrs and end at XXXX hrS.16

The reference to "Appendix 5C" is significant because it is Appendix 5C of the

applicable NERC rules that specifically refer to the initiation of an EEA Alert 2 state. Thus,

15 NYISO Emergency Operating Procedures Manual at 4-5 (see Attachment 11; available

at http://www.nyiso.com/public/webdocs/documents/manuals/operations/em op mnl.pdf.

16Id. at 4-7.

13

9. Notify the appropriate Market Paricipants to prepare to make

Special Case Resources (ICAP) and EDRP resources available for

the next day.

10. Notify the appropriate Market Paricipants to prepare to make

the EDRP resources available for the next day.

1 1. Initiate an "Emergency Energy Alert" in accordance with

Appendix 5C, "Energy Emergency Alerts" for the next day via the

SCIS; follow NPCC notification requirement (C-19); and notify

Communications Division, PSC, and Deparment of Environmental

Conservation (DEC). 15

In the event that NYISO does not have day-ahead waring that a reserve shortage may

occur and instead faces and actual in-day shortage of operating reserves, Section 4.4.2 of the

EOP Manual is invoked:

9. Initiate an "Emergency Energy Alert" in accordance with NERC

Appendix 5C, "Energy Emergency Alerts" for today via the SCIS;

follow NPCC notification requirements (C-19); and notify

Communications Division, PSC, and DEC.

10. Direct Market Paricipants to activate Special Case Resources

(ICAP) to star at XX hrs and end at XXX hrs.

11. Direct Market Participants to activate EDRP to star at XX

hrs and end at XX hrS.16

The reference to "Appendix 5C" is significant because it is Appendix 5C of the

applicable NERC rules that specifically refer to the initiation of an EEA Alert 2 state. Thus,

15 NYISO Emergency Operating Procedures Manual at 4-5 (see Attachment 11; available

at http://ww.nyiso.com/public/webdocs/documents/manuals/operations/em op mnl.pdf.

16Id at 4-7.

13
before the SCR resources are actually activated, the NYISO will have already entered an EEA

Alert 2 state.

The SCR program contains no built-in limit on the number of hours that resources can be

called upon per year. However, each resource is required to perform for a minimum of four hours

per event. The thresholds for program activation described above have proven sufficiently high

that the program has been activated at most for 40 hours in any given year. 17

* * *

In sum, as discussed above, by placing a 15 hours per year maximum on emergency DR

operation, the Final Rule may prevent emergency engines from participating in emergency DR

programs since the engines may not be able to meet ISO tariff requirements that specify

minimum hours of availability to participate. Under PJM tariff requirements for emergency DR,

a minimum of 60 hours per year is required. Under ERCOT tariff requirements for emergency

DR, a minimum of24 hours per year is required. In ISO-NE, no minimum hour participation is

defined but 55 hours is a reasonable upper limit for DR asset availability. Under NYISO

requirements for emergency DR, no minimum hour participation is defined other than the 4 hour

per event minimum.

D. Emergency DR Programs are Rarely Called, So the Risk That They Will Be

Dispatched to Their Maximum Hours is Minimal

Despite the number of hours of availability required by the tariff restrictions described

above, emergency DR programs are by design infrequently called, so any risk that EPA may

17 See Attachment 12 (available at

http://www.nyiso.com/public/webdocs/products/ demand response/ general info/event history. pd

D· A further discussion of the hours of dispatch for this program is below in Section D. Note

that two one-hour events per year are currently mandatory for testing purposes.

14

before the SCR resources are actually activated, the NYISO wil have already entered an EEA

Alert 2 state.

The SCR program contains no built-in limit on the number of hours that resources can be

called upon per year. However, each resource is required to perform for a minimum of four hours

per event. The thresholds for program activation described above have proven sufficiently high

that the program has been activated at most for 40 hours in any given year. 

17

* * *

In sum, as discussed above, by placing a 15 hours per year maximum on emergency DR

operation, the Final Rule may prevent emergency engines from paricipating in emergency DR

programs since the engines may not be able to meet ISO tariff requirements that specify

minimum hours of availabilty to participate. Under PJM tariff requirements for emergency DR,

a minimum of 60 hours per year is required. Under ERCOT tariff requirements for emergency

DR, a minimum of24 hours per year is required. In ISO-NE, no minimum hour paricipation is

defined but 55 hours is a reasonable upper limit for DR asset availability. Under NYISO

requiremehts for emergency DR, no minimum hour paricipation is defined other than the 4 hour

per event minimum.

D. Emergency DR Programs are Rarely Called, So the Risk That They Wil Be

Dispatched to Their Maximum Hours is Minimal

Despite the number of hours of availability required by the tariff restrictions described

above, emergency DR programs are by design infrequently called, so any risk that EPA may

17 See Attachment 12 (available at

http://ww.nyiso.com/public/webdocs/products/ demand response/ general info/event history. pd

D. A fuher discussion of the hours of dispatch for this program is below in Section D. Note

that two one-hour events per year are currently mandatory for testing puroses.

14
foresee for these engines to be regularly run at the maximum hours described above is minimal.

We discuss the historical operation of these programs in each of the regions below.

In PJM's territory, the ELRP has rarely been declared - it is truly reserved for emergency

situations. This declaration should not be confused with other PJM programs that are enacted for

economic reasons (e.g., economic DR or "peak shaving"). In the past seven years, the ELRP has

only been called five times for a cumulative total of 20 hours. The ELRP has only been called in

the eastern portion ofPJM; it has never been called in the western portion. A summary of the

ELRP Event Hours is as follows:

Year Events Duration

(Hours)

2003 0 0

2004 0 0

2005 July 27 4

August 4 3

2006 August 2 4

August 3 5

2007 August 8 4

2008 0 0

2009 0 0

Therefore, while the PJM tariffs require participants in the ELRP to be available for 60 hours per

year, they do everything in their power to minimize the use of this emergency tool as evidenced

by the low number of hours that the program has actually been operated. This makes sense

because grid operators do not want to operate under emergency conditions. Avoiding

emergencies is their job. Resources in PJM are generally dispatched according to need.

Historically DR resources in operationally constrained regions are dispatched first. If the

constrained region is very large or if there are no constraints, PJM will dispatch all DR resources

in the region concurrently even if not all DR resources are required.

15

foresee for these engines to be regularly ru at the maximum hours described above is minimaL.

We discuss the historical operation of these programs in each of the regions below.

In PJM's territory, the ELRP has rarely been declared - it is truly reserved for emergency

situations. This declaration should not be confused with other PJM programs that are enacted for

economic reasons (e.g., economic DR or "peak shaving"). In the past seven years, the ELRP has

only been called five times for a cumulative total of 20 hours. The ELRP has only been called in

the eastern portion ofPJM; it has never been called in the western portion. A summar of the

ELRP Event Hours is as follows:

Year Events Duration

(Hours)

2003 0 0

2004 0 0

2005 July 27 4

August 4 3

2006 August 2 4

August 3 5

2007 August 8 4

2008 0 0

2009 0 0

Therefore, while the P JM tariffs require participants in the ELRP to be available for 60 hours per

year, they do everything in their power to minimize the use of this emergency tool as evidenced

by the low number of hours that the program has actually been operated. This makes sense

because grid operators do not want to operate under emergency conditions. Avoiding

emergencies is their job. Resources in PJM are generally dispatched according to need.

Historically DR resources in operationally constrained regions are dispatched first. If the

constrained region is very large or if there are no constraints, PJM wil dispatch all DR resources

in the region concurrently even if not all DR resources are required.

15
Additionally, proposed rules currently under consideration in PJM's stakeholder

process'" envision routine use ofPJM's current right to zonal dispatch. Under these proposals,

emergency DR in PJM would be divided into 34 groups (two groups in each of 17 zones; see

Attachment 13 for a map of the zones), and called on a group-by-group basis according to

location and quantity requirements. Within each PJM zone, emergency demand resources are

divided into "long lead" and "short lead" resources, with the long lead time resources being

called first in most circumstances. Because emergency generation can generally respond

quickly, it is most often registered as a short lead resource, meaning that emergency generation

will tend to be called upon only if the long lead curtailment-based DR is insufficient to meet

operating requirements.

Thus, the total number of backup generators called upon in a DR will be smaller in the

future, due to the increasingly fine-grained control PJM will have over demand resources.

In Texas, there have been no ElLS events since program inception in 2008. The ElLS

was designed to prevent firm load shedding such as what occurred on December 22, 1989 and

April 17, 2006. On December 22, 1989 during extreme cold conditions during the morning

peak, 500 MW of rotating outages for 30 minutes were required. On April 17, 2006, during

extreme heat conditions, ERCOT missed its daily peak load forecast by nearly 10% along with

five major power plant failures during peak hours requiring 1,000 MW of rotating outages for

almost two hours. The ElLS was developed to prevent such firm load shedding. Currently,

ERCOT dispatches all of the ElLS at once without zonal dispatch.

IS Under discussion at the Shortage Pricing Working Group, materials archived at

http://www.pjm.comlcommittees-and-groups/working-groups/spwg.aspx.

16

Additionally, proposed rules curently under consideration in PJM's stakeholder

process18 envision routine use ofPJM's curent right to zonal dispatch. Under these proposals,

emergency DR in PJM would be divided into 34 groups (two groups in each of 17 zones; see

Attachment 13 for a map of the zones), and called on a group-by-group basis according to

location and quantity requirements. Within each P JM zone, emergency demand resources are

divided into "long lead" and "short lead" resources, with the long lead time resources being

called first in most circumstances. Because emergency generation can generally respond

quickly, it is most often registered as a short lead resource, meaning that emergency generation

wil tend to be called upon only if the long lead curtailment-based DR is insufficient to meet

operating requirements.

Thus, the total number of backup generators called upon in a DR wil be smaller in the

future, due to the increasingly fine-grained control PJM wil have over demand resources.

In Texas, there have been no ElLS events since program inception in 2008. The EILS

was designed to prevent firm load shedding such as what occured on December 22, 1989 and

April 17,2006. On December 22, 1989 during extreme cold conditions during the morning

peak, 500 MW of rotating outages for 30 minutes were required. On April 17, 2006, during

extreme heat conditions, ERCOT missed its daily peak load forecast by nearly 10% along with

five major power plant failures during peak hours requiring 1,000 MW of rotating outages for

almost two hours. The EILS was developed to prevent such firm load shedding. Curently,

ERCOT dispatches all of the EILS at once without zonal dispatch.

18 Under discussion at the Shortage Pricing Working Group, materials archived at

http://ww.pjm.com/committees-and-groups/working-groups/ spwg.aspx.

16
In New England, since the emergency DR Program has been implemented, OP 4, Action

12 has only been called three times in all of New England. 19 The only system wide call was on

August 2,2006 when record electric power demands were set. On that day, the ISO-NE

emergency DR program was called for a total of3.75 hours. ISO-NE estimates that the record

all time electricity demand for New England of20,408 MW on that day would have been 480

MW higher if the emergency DR program, that utilized both curtailment and backup generators,

was not activated. Record peak demands were also set a few weeks prior to August 2, 2006 but

OP 4, Action 12 was not called in that case because the electric transmission system was

working properly. Thus, emergency DR is not always activated for record peak demand.

Prior to 2006, the ISO-NE emergency DR program was called two other times, both in

Connecticut only. On August 15,2003, the day after the major blackout, the ISO-NE emergency

DR program was called in Connecticut for 16.5 straight hours. On July 27,2005, a day when

record electric power demands to date in all of New England were set, the ISO-NE emergency

DR program was called in southwest Connecticut for 5.95 hours. Under the current Final Rule,

emergency engines would not have been able to participate in the August 15,2003 ISO-NE

emergency DR event beyond 15 hours if those engines were to maintain their emergency-only

status under the Final Rule.

Currently in New England there are 8 dispatch zones for the ISO-NE emergency DR

program. In 2011, the dispatch zones will increase to 19 (Massachusetts will go from 3 to 7

19 According to ISO-NE OP 4 Action Archive, in addition to August 15,2003, July 27,

2005 and August 2,2006, there have been three other times OP 4, Action 12 or higher has been

called: August 20,2004, June 19,2006 and December 1, 2007. The first two events were for the

Boston area only; of these, emergency generators were only called on August 20,2004. The last

event was a voluntary event, as it was outside the dispatch window (weekend day) for DR under

the nCAP rules, for Maine generators only due to a gas supply outage. Only a fraction of DR in

Maine that was called responded to this event.

17

In New England, since the emergency DR Program has been implemented, OP 4, Action

12 has only been called thee times in all of New England. 

19 The only system wide call was on

August 2,2006 when record electric power demands were set. On that day, the ISO-NE

emergency DR program was called for a total of3.75 hours. ISO-NE estimates that the record

all time electricity demand for New England of20,408 MW on that day would have been 480

MW higher if the emergency DR program, that utilized both curtailment and backup generators,

was not activated. Record peak demands were also set a few weeks prior to August 2, 2006 but

OP 4, Action 12 was not called in that case because the electric transmission system was

working properly. Thus, emergency DR is not always activated for record peak demand.

Prior to 2006, the ISO-NE emergency DR program was called two other times, both in

Connecticut only. On August 15,2003, the day after the major blackout, the ISO-NE emergency

DR program was called in Connecticut for 16.5 straight hours. On July 27,2005, a day when

record electric power demands to date in all of New England were set, the ISO-NE emergency

DR program was called in southwest Connecticut for 5.95 hours. Under the curent Final Rule,

emergency engines would not have been able to paricipate in the August 15,2003 ISO-NE

emergency DR event beyond 15 hours if those engines were to maintain their emergency-only

status under the Final Rule.

Currently in New England there are 8 dispatch zones for the ISO-NE emergency DR

program. In 201 1, the dispatch zones wil increase to 19 (Massachusetts wil go from 3 to 7

19 According to ISO-NE OP 4 Action Archive, in addition to August 15,2003, July 27,

2005 and August 2,2006, there have been three other times OP 4, Action 12 or higher has been

called: August 20,2004, June 19,2006 and December 1, 2007. The first two events were for the

Boston area only; of these, emergency generators were only called on August 20,2004. The last

event was a voluntary event, as it was outside the dispatch window (weekend day) for DR under

the TICAP rules, for Maine generators only due to a gas supply outage. Only a fraction of DR in

Maine that was called responded to this event.

17
dispatch zones; Connecticut will go from 1 to 4 dispatch zones). See Attachment 14. Thus, the

ability to pinpoint dispatch of emergency DR resources gets significantly more precise in 2011,

meaning that only the specific areas having trouble with the electric grid will call upon

emergency DR resources. Thus, in the future, even if emergency DR events are called for a

similar number of hours as in the past, the total number of back-up generators running will be

fewer due to the ability to narrow the geographic target area of the response.

Finally, the New York ISO's SCR program has been called from 0 to 40 hours per year

between 2001 and 2009?0 While 40 hours was the maximum it was called in anyone year, there

were four other years that SCR would have exceeded the proposed 15 hour limit (20.5, 22, 20,

and 19.5 hours respectively). NYISO currently dispatches by zones. There are 11 zones in New

York and several of the events were dispatched in only one or two zones. See Attachment 12 for

a full listing of number of hours of dispatch by zone.

E. EPA's Justification for the 15 Hour Limit Reflects a Misinterpretation of Comments

Supporting DR

EPA justified the 15 hour limit for emergency DR use by referring to a comment letter

submitted by the DR Service Providers ("DRSP Coalition") made up of CPower, Inc. and

Innoventive Power, LLC (see Attachment 15, Comments on Proposed Rule, National Emission

Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines,

submitted by DRSP Coalition, May 29, 2009):

[a]s discussed in response to comment 6.1.1, EPA believes that it would be

appropriate to allow engines to retain their status as emergency engines under subpart

ZZZZ if they operate as part of DR programs for a 15 hours of operation per year or

less in situations where grid failure and a blackout are imminent. The commenter's

information indicates that no engine has needed more than 15 hours per year to meet

20 See Attachment 12.

18

dispatch zones; Connecticut will go from 1 to 4 dispatch zones). See Attachment 14. Thus, the

abilty to pinpoint dispatch of emergency DR resources gets significantly more precise in 201 1,

meaning that only the specific areas having trouble with the electric grid wil call upon

emergency DR resources. Thus, in the future, even if emergency DR events are called for a

similar number of hours as in the past, the total number of back-up generators running will be

fewer due to the ability to narow the geographic target area of the response.

Finally, the New York ISO's SCR program has been called from 0 to 40 hours per year

between 2001 and 2009.10 While 40 hours was the maximum it was called in anyone year, there

were four other years that SCR would have exceeded the proposed 15 hour limit (20.5, 22, 20,

and 19.5 hours respectively). NYISO curently dispatches by zones. There are 11 zones in New

York and several of the events were dispatched in only one or two zones. See Attachment 12 for

a full listing of number of hours of dispatch by zone.

E. EPA's Justification for the 15 Hour Limit Reflects a Misinterpretation of Comments

Supporting DR

EPA justified the 15 hour limit for emergency DR use by referring to a comment letter

submitted by the DR Service Providers ("DRSP Coalition") made up of CPower, Inc. and

Innoventive Power, LLC (see Attachment 15, Comments on Proposed Rule, National Emission

Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines,

submitted by DRSP Coalition, May 29, 2009):

(a)s discussed in response to comment 6.1.1, EPA believes that it would be

appropriate to allow engines to retain their status as emergency engines under subpar

ZZZZ if they operate as part of DR programs for a 15 hours of operation per year or

less in situations where grid failure and a blackout are imminent. The commenter's

information indicates that no engine has needed more than 15 hours per year to meet

20 See Attachment 12.

18
their requirements under their DR program. This alleviates the concerns expressed by

the commenter. These engines will still be able to participate in DR programs and the

final rule will not impact the energy supply or grid reliabilit1 by providing

disincentives for facilities to participate in these programs.'

We believe that EPA misinterpreted the comments filed by the DRSP Coalition. Indeed,

CPower sent a letter to EPA on March 26, 2010 in which the company described the flaws in

EPA's analysis as follows:

[w]hile we are pleased that the EPA in its final rule has recognized the importance of

allowing emergency engines to operate in DR programs, we believe EPA

unfortunately has improperly interpreted our comments as described in Reference 2,

and are using this misinterpretation as justification of the IS-hour limit in the Final

Rule. In Reference 1, commenters provided a table of annual event operating hours

for DR emergency engines participating in the NYISO Installed Capacity market

(special case resources). That table shows that over an eight-year period between

.2001 and 2008, emergency engines operated an average of 16 hours per year. That

table also shows up to 40 hours of operation in a specific year (2006), which,

incidentally, was one of the hottest summers on record in the northeast, setting record

system peak conditions and severely stressing regional electric systems. We submit

that nothing in Reference 1 DRSP Coalition comments supports the EPA justification

for the 15 hour cap. DRSP did not, and does not, endorse a 15 hour limit. Rather,

commenter's letter stated that emergency DR was dispatched in New York between 0

and 40 hours per year over an 8 year history to address system emergencies, with an

average of 16 hours/per year. We believe the Final Rule would preclude participation

of emergency engines in the referenced NYISO DR capacity market, and in fact,

preclude participation in many, if not most, other regional emergency DR programs. 22

Innoventive Power, the other member of the DRSP Coalition that commented on the

proposed rule (and a petitioner here), sent a similar letter to EPA on May 21, 2010,

stating that their comments did not in any way "indicate that no engine has needed more

21 See Attachment 16, EPA's Response to Public Comments on Proposed National

Emissions 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 of Less Than or Equal to 500 Brake HP Located at Major Sources of Hazardous Air

Pollutant Emissions from Melanie King to the EPA Docket (EPA-HQ-OAR-2008-0708), page

309.

22 See Attachment 17, Letters from CPower and Innoventive Power to Ms. Melanie King,

EPA, March 26 and May 21, 2010.

19

their requirements under their DR program. This alleviates the concerns expressed by

the commenter. These engines wil stil be able to participate in DR programs and the

final rule wil not impact the energy supply or grid reliabilit( by providing

disincentives for facilities to paricipate in these programs.2

We believe that EPA misinterpreted the comments filed by the DRSP Coalition. Indeed,

CPower sent a letter to EPA on March 26, 2010 in which the company described the flaws in

EPA's analysis as follows:

(w)hile we are pleased that the EPA in its final rule has recognized the importance of

allowing emergency engines to operate in DR programs, we believe EPA

unfortunately has improperly interpreted our comments as described in Reference 2,

and are using this misinterpretation as justification of the 15-hour limit in the Final

Rule. In Reference 1, commenters provided a table of annual event operating hours

for DR emergency engines paricipating in the NYISO Installed Capacity market

(special case resources). That table shows that over an eight-year period between

,2001 and 2008, emergency engines operated an average of 16 hours per year. That

table also shows up to 40 hours of operation in a specific year (2006), which,

incidentally, was one of the hottest summers on record in the northeast, setting record

system peak conditions and severely stressing regional electric systems. We submit

that nothing in Reference 1 DRSP Coalition comments supports the EPA justification

for the 15 hour cap. DRSP did not, and does not, endorse a 15 hour limit. Rather,

commenter's letter stated that emergency DR was dispatched in New York between 0

and 40 hours per year over an 8 year history to address system emergencies, with an

average of 16 hours/per year. We believe the Final Rule would preclude participation

of emergency engines in the referenced NYISO DR capacity market, and in fact,

preclude paricipation in many, if not most, other regional emergency DR programs. 

22

Innoventive Power, the other member of the DRSP Coalition that commented on the

proposed rule (and a petitioner here), sent a similar letter to EPA on May 21, 2010,

stating that their comments did not in any way "indicate that no engine has needed more

21 See Attachment 16, EPA's Response to Public Comments on Proposed National

Emissions Standards for Hazardous Air Pollutats for Existing Stationary Reciprocating Internal

Combustion Engines Located at Area Sources of Hazardous Air Pollutant Emissions or Have a

Site Rating of Less Than or Equal to 500 Brake HP Located at Major Sources of Hazardous Air

Pollutant Emissions from Melanie King to the EPA Docket (EPA-HQ-OAR-2008-0708), page

309.

22 See Attachment 17, Letters from CPower and Innoventive Power to Ms. Melanie King,

EPA, March 26 and May 21, 2010.

19
than 15 hours per year to meet their requirements under their DR program." See

Attachment 16, Letter from Innoventive to Ms. Melanie King, EPA, dated May 21,2010.

So, the commenters do not support a 15 hour restriction. Moreover, it is not

appropriate to set a regulatory threshold at 15 hours based on the 16 hour "average"

described in the DRSP comments because emergency engines must comply with EPA's

regulations 100 percent of the time, and basing the regulation on "average" values would

mean that some engines would always be out of compliance.

F. Numerous States Allow Emergency Engines to Participate in Emergency DR; None

Limits Such Participation to 15 Hours

All New England states allow emergency engines to participate in emergency DR, and

none restrict such participation to 15 hours. Most PJM states and Texas treat emergency DR

similarly, again with no hourly restrictions.

1. All of the New England States Allow Emergency Engines to Participate in Emergency

DR, With No Hourly Annual Restrictions

20.

than 15 hours per year to meet their requirements under their DR program." See

Attachment 16, Letter from Innoventive to Ms. Melanie King, EPA, dated May 21,2010.

So, the commenters do not support a 15 hour restriction. Moreover, it is not

appropriate to set a regulatory threshold at 15 hours based on the 16 hour "average"

described in the DRSP comments because emergency engines must comply with EPA's

regulations 100 percent of the time, and basing the regulation on "average" values would

mean that some engines would always be out of compliance.

F. Numerous States Allow Emergency Engines to Participate in Emergency DR; None

Limits Such Participation to 15 Hours

All New England states allow emergency engines to paricipate in emergency DR, and

none restrict such paricipation to 15 hours. Most PJM states and Texas treat emergency DR

similarly, again with no hourly restrictions.

1. All of the New England States Allow Emergency Engines to Paricipate in Emergency

DR, With No Hourly Anual Restrictions

20,
Over the past few years, Connecticur", Massachusetts'", Rhode Island", and New

Hampshire'" have formally changed their definitions of "emergency" to allow for emergency

23 Notwithstanding section 22a-174-22(a)(3) of the Regulations of Connecticut State

Agencies, requires operation of the emergency engine under an agreement with the New

England Region System Operator during the period of time the New England Region System

Operator is implementing voltage reductions or involuntary load interruptions within the

Connecticut load zone due to a capacity deficiency. Connecticut R.C.S.A. §22a-174-22(a)(4)(E)

(emphasis added).

24 When the imminent threat of a power outage is likely due to failure of the electrical

supply or when capacity deficiencies result in a deviation of voltage from the electrical supplier

to the premises of 3% above or 5% below standard voltage, or periods during which the regional

transmission organization directs the implementation of voltage reductions, voluntary load

curtailments by customers, or automatic or manual load shedding within Massachusetts in

response to unusually low frequency, equipment overload, capacity or energy deficiency,

unacceptable voltage levels, or other such emergency conditions. Massachusetts 310 CMR

7.03(10)(a)4.c (emphasis added).

25 "Emergency" means an electrical power outage due to a failure of the electrical grid,

on-site disaster, local equipment failure, or public service emergencies such as flood, fire or

natural disaster. Emergency shall also mean periods during which ISO New England, or any

successor Regional Transmission Organization, directs the implementation of operating

procedures for voltage reductions, voluntary load curtailments by customers or automatic or

manual load shedding within Rhode Island in response to unusually low frequency, equipment

overload capacity or energy deficiency, unacceptable voltage levels or other such emergency

conditions. Rhode Island Air Pollution Control Regulation No.9, Section 9.1.15 (emphasis

added).

26 "Emergency generator" means a stationary internal combustion engine or stationary

combustion turbine which operates as a mechanical or electrical power source only when the

primary power source for a facility is not available during an emergency such as a power outage,

or during the normal maintenance and testing procedure as recommended by the manufacturer.

The term does not include a load-shaving unit or peaking power production unit, but does

include the operation of the emergency generator during periods in which ISO New England, or

any successor Regional Transmission Organization, directs the implementation of operating

procedures for voltage reductions of 5% of normal operating voltage requiring more than 10

minutes to implement, voluntary load curtailments by customers, or automatic or manual loadshedding, within New Hampshire or within the entire New England region, in response to, or to

prevent the occurrence of unusually low frequency, equipment overload, capacity or energy

deficiency, unacceptable voltage levels, or other such emergency conditions. New Hampshire

Env-A 101.661 (emphasis added).

21

Over the past few years, Connecticut23, Massachusetts24, Rhode Island25, and New

Hampshire26 have formally changed their definitions of "emergency" to allow for emergency

23 Notwithstanding section 22a-174-22(a)(3) of 

the Regulations of Connecticut State

Agencies, requires operation of the emergency engine under an agreement with the New

England Region System Operator during the period of time the New England Region System

Operator is implementing voltage reductions or involuntary load interruptions within the

Connecticut load zone due to a capacity deficiency. Connecticut R.C.S.A. §22a-174-22(a)(4)(E)

(emphasis added).

24 When the imminent threat of a power outage is likely due to failure of the electrical

supply or when capacity deficiencies result in a deviation of voltage from the electrical supplier

to the premises of 3% above or 5% below standard voltage, or periods during which the regional

transmission organization directs the implementation of voltage reductions, voluntary load

curtailments by customers, or automatic or manual load shedding within Massachusetts in

response to unusually low frequency, equipment overload, capacity or energy deficiency,

unacceptable voltage levels, or other such emergency conditions. Massachusetts 310 CMR

7.03(l0)(a)4.c (emphasis added).

25 "Emergency" means an electrical power outage due to a failure of the electrical grid,

on-site disaster, local equipment failure, or public service emergencies such as flood, fire or

natural disaster. Emergency shall also mean periods during which iso New England, or any

successor Regional Transmission Organization, directs the implementation of operating

procedures for voltage reductions, voluntary load curtailments by customers or automatic or

manual load shedding within Rhode Island in response to unusually low frequency, equipment

overload capacity or energy deficiency, unacceptable voltage levels or other such emergency

conditions. Rhode Island Air Pollution Control Regulation No.9, Section 9.1.15 (emphasis

added).

26 "Emergency generator" means a stationary internal combustion engine or stationary

combustion turbine which operates as a mechanical or electrical power source only when the

primary power source for a facility is not available during an emergency such as a power outage,

or during the normal maintenance and testing procedure as recommended by the manufacturer.

The term does not include a load-shaving unit or peaking power production unit, but does

include the operation of the emergency generator during periods in which iso New England, or

any successor Regional Transmission Organization, directs the implementation of operating

procedures for voltage reductions of 5% of normal operating voltage requiring more than 10

minutes to implement, voluntary load curtailments by customers, or automatic or manual loadshedding, within New Hampshire or within the entire New England region, in response to, or to

prevent the occurrence of unusually low frequency, equipment overload, capacity or energy

deficiency, unacceptable voltage levels, or other such emergency conditions. New Hampshire

Env-A 101.661 (emphasis added).

21
engines to operate in ISO- NE' s emergency DR program as emergency engines. Vermonr'" has .

developed a policy allowing emergency engines to operate in the ISO-NE emergency DR

program and Maine permits emergency engines on a case-by-case basis if engines exceed permit

thresholds. None of the New England states specify a maximum hours per year cap of

emergency DR use. Attachment 18 details the specific language adopted by each New England

state regarding emergency use that includes emergency DR.

2. Many States in PJM Territory Allow Emergency Engines to Participate in Emergency

DR With No Hourly Annual Restrictions

27 VT DEC developed "A Department Procedure On Operation of Emergency Engines

During a Grid Capacity Event" in December, 2005 and revised in January, 2007.

22

engines to operate in iSO- NE' s emergency DR program as emergency engines. Vermont27 has '

developed a policy allowing emergency engines to operate in the ISO-NE emergency DR

program and Maine permits emergency engines on a case-by-case basis if engines exceed permit

thresholds. None of the New England states specify a maximum hours per year cap of

emergency DR use. Attachment 18 details the specific language adopted by each New England

state regarding emergency use that includes emergency DR.

2. Many States in PJM Territory Allow Emergency Engines to Paricipate in Emergency

DR With No Hourly Anual Restrictions

27 VT DEC developed "A Deparment Procedure On Operation of Emergency Engines

During a Grid Capacity Event" in December, 2005 and revised in Januar, 2007.

22
Maryland/" and Virginia'" have formally changed their definitions of emergency to allow

for emergency engines to operate in PJM's emergency DR program as emergency engines. Our

experience is that Pennsylvania's Department of the Environment, Illinois, and West Virginia

allow the use of emergency engines in the PJM emergency DR program under their existing

regulations. Allegheny County, Virginia, and Indiana require filings to be made either for

permits, permit modifications, or exemptions. Virginia and Allegheny County cap the use of

emergency DR at 60 hours per year through permits, if permits are required. None of the other

28 "Emergency" includes a PJM declared emergency.

(2-2) "Emergency generator" means:

(b) An engine that operates during an emergency according to the procedures in

the PJM Emergency Operations Manual for a PJM declared emergency.

(4-4) upJM Declared Emergency" means a condition that exists where the PJM

Interconnection, LLC notifies electric distributors that an emergency exists or may

occur and it is necessary to implement the procedures in the PJM Manual 13Emergency

Operations, as revised Maryland COMAR 26.11.09.01 B. (2-1) (b) (2-2) and (4-4)

(emphasis added).

29 "Emergency" means a condition that arises from sudden and reasonably unforeseeable

events where the primary energy or power source is disrupted or disconnected due to conditions

beyond the control of an owner or operator of a facility including ... d. An ISO-declared

emergency, where an ISO emergency is:

• An abnormal system condition requiring manual or automatic action to maintain

system frequency, to prevent loss offirm load, equipment damage, or tripping of

system elements that could adversely affect the reliability of an electric system or the

safety of persons or property.

• Capacity deficiency or capacity excess conditions.

• Afuel shortage requiring departure from normal operating procedures in order to

minimize the use of such scarce fuel.

• Abnormal natural events or man-made threats that would require conservative

operations to posture the system in a more reliable state.

• An abnormal event external to the ISO service territory that may require ISO action.

Virginia 9 VAC 5-80-1110 C l.d (emphasis added).

23

Maryland28 and Virginia29 have formally changed their definitions of emergency to allow

for emergency engines to operate in PJM's emergency DR program as emergency engines. Our

experience is that Pennsylvania's Deparment of the Environment, Ilinois, and West Virginia

allow the use of emergency engines in the PJM emergency DR program under their existing

regulations. Allegheny County, Virginia, and Indiana require filings to be made either for

permits, permit modifications, or exemptions. Virginia and Allegheny County cap the use of

emergency DR at 60 hours per year through permits, if permits are required. None of the other

28 "Emergency" includes a PJM declared emergency.

(2-2) "Emergency generator" means:

(b) An engine that operates during an emergency according to the procedures in

the P JM Emergency Operations Manual for a P JM declared emergency.

(4-4) up JM Declared Emergency" means a condition that exists where the P JM

Interconnection, LLC notifes electric distributors that an emergency exists or may

occur and it is necessary to implement the procedures in the P JM Manual 13 Emergency

Operations, as revised Maryland COMA 26.11.09.01 B. (2-1) (b) (2-2) and (4-4)

(emphasis added).

29 "Emergency" means a condition that arises from sudden and reasonably unforeseeable

events where the primary energy or power source is disrupted or disconnected due to conditions

beyond the control of an owner or operator of a facility including. . . d. An ISO-declared

emergency, where an ISO emergency is:

. An abnormal system condition requiring manual or automatic action to maintain

system frequency, to prevent loss of firm load, equipment damage, or tripping of

system elements that could adversely affect the reliabilty of an electric system or the

safety of persons or property.

. Capacity deficiency or capacity excess conditions.

. Afuel shortage requiring departure from normal operating procedures in order to

minimize the use of such scarce fuel.

. Abnormal natural events or man-made threats that would require conservative

operations to posture the system in a more reliable state.

. An abnormal event external to the ISO service territory that may require ISO action.

Virginia 9 V AC 5-80- 1 1 10 C 1.d (emphasis added).

23
states listed above specify a maximum hours per year cap of emergency DR use. Attachment 19

details the specific language adopted, proposed, or policies in place of the PJM states listed

above regarding emergency use that includes emergency DR.

3. The Texas Commission on Environmental Quality Allows Emergency Engines to

Participate in Emergency DR With No Hourly Annual Restrictions

The Texas Commission on Environmental Quality ("TCEQ") has ruled that engines

operating under Permit by Rule ("PBR") 106.511 (as the majority of emergency engines in

Texas do) may participate as emergency generators in the ERCOT ElLS Progranr'". Emergency

engines operating under PBR can operate up to 876 hours per year. TCEQ does not limit the

hours of participation by emergency engines in the ElLS Program.

4. Delaware's Concerns Regarding Emergency DR Under This Rule Are Unfounded

The State of Delaware's Department of Natural Resources and Environmental Control

("DNREC") filed a Petition for Reconsideration with EPA on April 30, 2010, urging the Agency

to reconsider the DR provisions of the Final Rule. We believe that each of Delaware's concerns

is unfounded, and we address those concerns briefly below. We have not had the opportunity to

review the DNREC Petition in detail, nor to check the accuracy of the calculations contained in

it, so we reserve the right to provide EPA with our further thoughts on that Petition at a later

date.

1. DNREC describes a situation where a group of around 225 mostly poultry farms banded

together to adopt a peak shaving agreement with the local electric cooperative, and argues

that the DR provisions in the RICE NESHAP would allow this "harmful approach." This

is not true. The NESHAP does not allow peak shaving as part of the allowance for nonemergency use of emergency engines, 40 C.F.R. § 63.6640(f)(4). All of the emergency

DR programs we discuss above are not peak shaving programs.

30 See Attachment 20, TCEQ Letter Regarding Use of Emergency Engines in ElLS.

24

states listed above specify a maximum hours per year cap of emergency DR use. Attachment 19

details the specific language adopted, proposed, or policies in place of the P JM states listed

above regarding emergency use that includes emergency DR.

3. The Texas Commission on Environmental Quality Allows Emergency Engines to

Participate in Emergency DR With No Hourly Anual Restrictions

The Texas Commission on Environmental Quality ("TCEQ") has ruled that engines

operating under Permit by Rule ("PBR") 1 06.5 1 1 (as the majority of emergency engines in

Texas do) may paricipate as emergency generators in the ERCOT EILS Program30. Emergency

engines operating under PBR can operate up to 876 hours per year. TCEQ does not limit the

hours of paricipation by emergency engines in the ElLS Program.

4. Delaware's Concerns Regarding Emergency DR Under This Rule Are Unfounded

The State of Delaware's Deparment of Natural Resources and Environmental Control

("DNREC") filed a Petition for Reconsideration with EPA on April 30, 2010, urging the Agency

to reconsider the DR provisions of the Final Rule. We believe that each of Delaware's concerns

is unounded, and we address those concerns briefly below. We have not had the opportity to

review the DNREC Petition in detail, nor to check the accuracy of the calculations contained in

it, so we reserve the right to provide EPA with our further thoughts on that Petition at a later

date.

1. DNREC describes a situation where a group of around 225 mostly poultry farms banded

together to adopt a peak shaving agreement with the local electric cooperative, and argues

that the DR provisions in the RICE NESHAP would allow this "harful approach." This

is not true. The NESHAP does not allow peak shaving as par of the allowance for nonemergency use of emergency engines, 40 C.F.R. § 63.6640(f)(4). All of the emergency

DR programs we discuss above are not peak shaving programs.

30 See Attachment 20, TCEQ Letter Regarding Use of Emergency Engines in ElLS.

24
2. DNREC notes that another group of about 200 poultry farmers "would have" crafted

another such program to be operated in the PJM Emergency DR Program, but Delaware

law (Air Quality Regulation No. 1144) prohibited them from doing so. Then, DNREC

goes through, "for illustration," what emissions would have been for that program. This

is irrelevant information because, as DNREC acknowledges, such an interruptible

program is prohibited by Delaware law unless the rigid emission limits of Air Quality

Regulation No. 1144 are met.

3. DNREC is concerned that the emergency DR provision will be used on days when

"conditions leading to the formation of ground-level ozone are at their worst." The facts

do not bear this out. In 2008, there were 25 red or orange ozone alert forecasts made

(i.e., high ozone levels), and in 2009 there were 9 alerts. But, there were zero emergency

DR events in Delawarefor these time periods. Of the five days the ELRP has been

called in PJMsince 2003, only one day (August 4,2005) was an ozone exceedance day in

Delaware (one of the six monitors in Delaware reported an exceedance of the ozone

level). For the remaining four days the ELRP has been called, there were no ozone

exceedances in Delaware.

4. DNREC argues that the DR term in the NESHAP is inconsistent with emergency

response provisions in other EPA rules, specifically the NSPS for spark ignition and

compression ignition engines. This also is not true, as we interpret those regulations to

mean that engines used for "peak shaving" are not emergency engines, and, again, the

DR programs that we discuss in this Petition are not used for peak shaving.

At the end of the day, we do not believe that DNREC understands the emergency nature

ofPJM's ELRP DR program; how severe the status of the electric grid must be before PJM can

activate the program; and therefore how infrequently it has been called historically. DNREC's

position essentially is that it would prefer the electricity grid to faiel(e.g., blackouts) before

emergency engines in Delaware can be activated''r. As discussed above, once the electric grid

fails, every generator in the area is turned on for hours or days until the electric grid is restored.

31 Emergency in the DNREC regulations means "an electric power outage due to: a

failure of the electrical grid; onsite disaster; local equipment failure; or public service

emergencies such as flood, fire, natural disaster, or severe weather conditions (e.g., hurricane,

tornado, blizzard, etc.); or when there is a deviation of voltage or frequency from the electrical

provider to the premises of 3% or greater above, or 5% or greater below, standard voltage or

frequency." Delaware CDR 7-1000-1144, Section 2.0.

32 Although DNREC allows for voltage deviations in its definition of emergency, the

ELRP is called just before the start of voltage reductions.

25

2. DNREC notes that another group of about 200 poultry farmers "would have" crafted

another such program to be operated in the PJM Emergency DR Program, but Delaware

law (Air Quality Regulation NO.1 144) prohibited them from doing so. Then, DNREC

goes through, "for ilustration," what emissions would have been for that program. This

is irrelevant information because, as DNREC acknowledges, such an interrptible

program is prohibited by Delaware law unless the rigid emission limits of Air Quality

Regulation No. 1144 are met.

3. DNREC is concerned that the emergency DR provision wil be used on days when

"conditions leading to the formation of ground-level ozone are at their worst." The facts

do not bear this out. In 2008, there were 25 red or orange ozone alert forecasts made

(i.e., high ozone levels), and in 2009 there were 9 alerts. But, there were zero emergency

DR events in Delawarefor these time periods. Of the five days the ELRP has been

called in PJMsince 2003, only one day (August 4,2005) was an ozone exceedance day in

Delaware (one of the six monitors in Delaware reported an exceedance of the ozone

level). For the remaining four days the ELRP has been called, there were no ozone

exceedances in Delaware.

4. DNREC argues that the DR term in the NESHAP is inconsistent with emergency

response provisions in other EPA rules, specifically the NSPS for spark ignition and

compression ignition engines. This also is not true, as we interpret those regulations to

mean that engines used for "peak shaving" are not emergency engines, and, again, the

DR programs that we discuss in this Petition are not used for peak shaving.

At the end of the day, we do not believe that DNREC understads the emergency nature

ofPJM's ELRP DR program; how severe the status of the electric grid must be before PJM can

activate the program; and therefore how infrequently it has been called historically. DNREC's

position essentially is that it would prefer the electricity grid to fai¡31 (e.g., blackouts) before

emergency engines in Delaware can be activated32. As discussed above, once the electric grid

fails, every generator in the area is turned on for hours or days until the electric grid is restored.

31 Emergency in the DNREC regulations means "an electric power outage due to: a

failure of the electrical grid; onsite disaster; local equipment failure; or public service

emergencies such as flood, fire, natural disaster, or severe weather conditions (e.g., hurricane,

tornado, blizzard, etc.); or when there is a deviation of voltage or frequency from the electrical

provider to the premises of 3% or greater above, or 5% or greater below, standard voltage or

frequency." Delaware CDR 7-1000-1144, Section 2.0.

32 Although DNREC allows for voltage deviations in its definition of emergency, the

ELRP is called just before the start of voltage reductions.

25
G. EPA Set a Precedent for the Use of Emergency Engines in Emergency DR Programs

in the Mandatory Greenhouse Gas Reporting Final Rule

EPA has already set a precedent for the use of emergency engines in emergency DR

programs without any restriction on hours of operation. In EPA's Mandatory Reporting of

Greenhouse Gases; Final Rule (40 CFR Part 86 et seq.), the Agency exempts emergency engines

from reporting greenhouse gases. The Final Rule defines emergency generator as "[a]n

emergency generator operates only during emergency situations, for training of personnel under

simulated emergency conditions, as part of emergency DR procedures, or for standard

performance testing procedures as required by law or by the generator manufacturer." 40 C.F.R.

§ 98.6, published in the Federal Register at 74 Fed. Reg. 56,387 (October 30,2009) (emphasis

added).

26

G. EPA Set a Precedent for the Use of Emergency Engines in Emergency DR Programs

in the Mandatory Greenhouse Gas Reporting Final Rule

EPA has already set a precedent for the use of emergency engines in emergency DR

programs without any restriction on hours of operation. In EPA's Mandatory Reporting of

Greenhouse Gases; Final Rule (40 CFR Par 86 et seq.), the Agency exempts emergency engines

from reporting greenhouse gases. The Final Rule defines emergency generator as "(a)n

emergency generator operates only during emergency situations, for training of personnel under

simulated emergency conditions, as part of emergency DR procedures, or for standard

performance testing procedures as required by law or by the generator manufacturer." 40 C.F.R.

§ 98.6, published in the Federal Register at 74 Fed. Reg. 56,387 (October 30,2009) (emphasis

added).

26
IV. RELIEF REQUESTED

Pursuant to Section 307(d)(7)(B) of the Clean Air Act, 42 U.S.C. § 7607(d)(7)(B), the

Companies hereby request that EPA reconsider the portions of the Final Rule, National Emission

Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines, as

discussed above, and make the following changes:

at 40 C.F.R. § 63.6640(f)(4) replace "... may operate the emergency engine for a

maximum of 15 hours per year as part of a DR program ... " with "... may

operate the emergency engine for a maximum of 60 hours per year or the

minimum hours required by Independent System Operator tariff, whichever is

less .... "

Respectfully submitted,

fLJ 7J C-LI~

Rick Counihan, EnerNOC, on Behalf of

CPower, Inc.

EnergyConnect, Inc.

EnerNOC, Inc.

Innoventive Power, LLC

Dated: May 27, 2010

27

iv. RELIEF REQUESTED

Pursuant to Section 307(d)(7)(B) of the Clean Air Act, 42 U.S.C. § 7607(d)(7)(B), the

Companies hereby request that EPA reconsider the portions of the Final Rule, National Emission

Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines, as

discussed above, and make the following changes:

at 40 C.F.R. § 63.6640(f)(4) replace ". . . may operate the emergency engine for a

maximum of 15 hours per year as par of a DR program. . ." with ". . . may

operate the emergency engine for a maximum of 60 hours per year or the

minimum hours required by Independent System Operator tariff, whichever is

less. . . ."

Respectfully submitted,

fL 7J C-L I ~

Rick Counihan, EnerNOC, on Behalf of

CPower, Inc.

EnergyConnect, Inc.

EnerNOC, Inc.

Innoventive Power, LLC

Dated: May 27, 2010

27