----- Forwarded by Melanie King/RTP/USEPA/US on 04/06/2010 02:18 PM
-----

Rick Counihan <RCounihan@enernoc.com> wrote on 04/05/2010 06:29:57 AM:

> From:
>
> Rick Counihan <RCounihan@enernoc.com>
>
> To:
>
> Melanie King/RTP/USEPA/US@EPA, Jeneva Craig/DC/USEPA/US@EPA, Michael 
> Horowitz/DC/USEPA/US@EPA, Peter Tsirigotis/RTP/USEPA/US@EPA, RobertJ 
> Wayland/RTP/USEPA/US@EPA, Rob Brenner/DC/USEPA/US@EPA
>
> Cc:
>
> "David M. Friedland" <DFriedland@bdlaw.com>, "don@blueskyenviro.com"
> <don@blueskyenviro.com>, Ken Schisler <kschisler@enernoc.com>, Don 
> DiCristofaro <DDiCristofaro@enernoc.com>, Rick Counihan 
> <RCounihan@enernoc.com>
>
> Date:
>
> 04/05/2010 06:30 AM
>
> Subject:
>
> RE: Follow-up from Meeting with EPA r.e. RICE NESHAPS and 15 Hour 
> Emergency DR Limit
>
> All,
>
>
>
> Thank you for taking the time to meet with us on Tuesday.  We very 
> much appreciate your willingness to brainstorm with us on the 
> important issue that we have raised.
>
>
>
> To restate the problem: 15 hours does not meet the minimum number of 
> hours required to qualify for the emergency demand response programs 
> in PJM, ERCOT or ISO New England.  As a result, the NESHAPs 
> regulation, as currently written, will preclude all emergency 
> generators from participating in these markets - removing a 
> significant amount of reliable capacity from the system.
>
>
>
> The number of hours allowed for emergency DR participation is not a 
> simple question of risk allocation for us, as Peter suggested at the 
> end of our meeting.  As I hope we have demonstrated, regardless of how 
> many hours are actually dispatched in a given year, it would be a 
> tariff violation to represent that an asset is available for 60 hours 
> per year (the PJM example) when regulations only allow it to be 
> available for 15 hours.
>
>
>
> You asked us to think about alternatives to simply increasing the 
> current 15 hour limit on emergency DR to 60 hours.  Following are two 
> proposals for your consideration:
>
>
>
> Proposal A
>
>
>
> As finalized, NESHAPs has three different hourly limits for emergency 
> generators (40 CFR 63.6640 (f) (4)). First, there is an overall limit 
> of 100 hours per year for testing and maintenance.
> Second, within that 100 hour limit, there is an allowance for up to 50 
> hours of "non-emergency operation" (not to include peak shaving).
> Third, of the 50 hours for non-emergency operation, only 15 can be 
> used for emergency DR.
>
>
>
> One idea is to eliminate the 50 hour allowance for "non-emergency 
> operation" and increase the limit for emergency DR participation to 60 
> hours.  Such a change would preserve the overall 100 hour limit and  
> the prohibition on peak shaving, while likely reducing overall run 
> time because (a) "non-emergency operation" would be disallowed and (b) 
> generator owners have the incentive to skip testing in months when 
> emergency DR events are called because operation during DR events 
> satisfies monthly testing requirements.  Importantly, this change 
> would preserve the last line of electric system defense currently 
> provided by emergency generators.
>
>
>
> Proposal B
>
>
>
> Another idea is to limit emergency DR participation to "the lesser of 
> 60 hours or the minimum number of hours required by a regional 
> transmission organization or equivalent balancing authority's tariff 
> to participate in emergency demand response" (or similar language).
> The effect of this modified provision would be a 60 hour maximum in 
> PJM and ISO New England, and a 24 hour maximum in ERCOT.
>
>
>
> Obviously, the two proposals described above could be combined as 
> well.  That is, eliminate the 50 hour allowance for "non-emergency 
> operation" and increase the limit for emergency DR participation to 
> the lesser of 60 hours or the minimum number of hours required by a 
> regional transmission organization or equivalent balancing authority's 
> tariff to participate in emergency demand response.
>
>
>
> I hope these ideas are helpful.  We look forward to hearing back from 
> you after you have had a chance to further discuss this issue.
>
>
>
> Sincerely,
>
>
>
> Rick Counihan - Vice President Regulatory Affairs
>
> EnerNOC, Inc. | 400 8th St., NW, Suite 804 | Washington  D.C. 20004
>
> o. 415.517.1861
>
> rcounihan@enernoc.com www.enernoc.com
>
> EnerNOC - get more from energy