David M. Friedland 1350 IStreet, 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

EnclosuresBEFORE 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,

2manufacturing 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.

3III. 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.

4A 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.

2Moreover, 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.

5were 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."

4The 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."

5NERC 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.

6EOP-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.

8For 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.

7C. 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

10If 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.

8PJM ("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.

92. 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.

10Operations 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

# aportion 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

11NERC-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 DemandResource operation." See http://ww.iso

### ne.com/markets/othrkts data/fcm/reports/demand res/.

129. 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,

15NYISO Emergency Operating Procedures Manual at 4-5 (see Attachment 11;available athttp://www.nyiso.com/public/webdocs/documents/manuals/operations/em op mnl.pdf.

16 

### I d. 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.

13before 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

17See 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.

14foresee 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.

15Additionally, 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.

16In 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

19According 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.

17dispatch 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.

18their 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.

19than 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 of5% of normal operating voltage requiring more than 10minutes 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 

### load

### shedding, 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).

21engines 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.



### 22Maryland/" 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).

23states 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." Thisis 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.

242. 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).

26IV. 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-L

# I~

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