Randolph Electric

Membership Corporation

Your Touchstone Energy® Cooperative @

PO Box 40 Asheboro, NC 27204

879 McDowell Rd. Asheboro, NC 27205

Telephone: (336) 625-5177

Toll Free: 1-800-672-8212

November 18, 2010

The Honorable Lisa Jackson

Administrator

United States Environmental Protection Agency

Ariel Rios Building (Mail Code 1101)

1200 Pennsylvania Ave., NW

Washington, D.C. 20460

Re: Petition for Reconsideration of Portions of the Final Rule: National Emission

Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines

(Docket EPA-HQ-OAR-2008-0708)

Dear Administrator Jackson:

I am writing in support of the National Rural Electric Cooperative Association's (NRECA)

October 19, 2010, Petition for Reconsideration of portions of the Final National Emission

Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines

promulgated on August 20, 2010, (75 Fed. Reg. 51,570). (Docket EPA-HQ-OAR-2008-0708).

I represent Randolph Electric Membership Corporation, a rural electric cooperative serving more

than 31,000 consumer-members in Alamance, Chatham, Montgomery, Moore, and Randolph

counties in central North Carolina. The company is headquartered in Asheboro and has one

district office in Robbins. Randolph EMC delivers over 500 million kWh of electric energy

annually with an annual peak capacity of 135 MW to residential, commercial and industrial

customers. Our meter density is approximately 7.5 meters per mile of distribution line. Our

wholesale power supply portfolio is made up of 51 percent nuclear and 37 percent coal, with

natural gas, hydro-electric, and other renewable resources completing the mix. Randolph EMC is

currently working toward compliance with North Carolina's Senate Bill 3 (Renewable Portfolio

Standards), replacing 10 percent of our future conventional generating resources with a

combination of renewable generation and energy efficiency measures by 2018.

NRECA's petition addresses restrictions contained in the final rule that prohibit the use of small

emergency generating units for peak shaving programs and limits demand reduction service

beginning in 2013 without the addition of expensive emission reduction technology on units

larger than a specified size.

With the implementation of new, more expensive renewable resources and the reduction of

energy sales associated with energy efficiency, combined with the need to invest in future baseload generation, all indicators point to much higher cost of electricity for our customers.

Randolph EMC is considering every possible measure to keep electric rates affordable for our

members.
The Honorable Lisa Jackson

Page 2 of2

November 18, 2010

One of the most promising low-cost programs that will be used in the future to help offset the

rising cost of our resource portfolio is demand-side management. Our system has in place

approximately 250 small, member-owned generators (mostly agricultural) with a combined

capacity of approximately 9 MW. The ability to control our aggregated system peak is a

valuable tool related to distribution resource management.

From a reliability perspective, demand side management, or distributed generation control, is a

component of our emergency resource plan. In the event that wholesale capacity is not available

or is limited, member-owned generation helps reduce our system need for resources. Financially,

our distributed generation has proven to be a valuable tool in controlling the cost of wholesale

power during hours when capacity was expensive by eliminating the need to purchase additional

peaking capacity. Presently, our distributed generation program is operated in what could be best

described as a maintenance mode. Member-owned generation is operated less than 20 hours per

year in order to maintain their ready status, as the value of peaking capacity has been relatively

affordable. This will not be the case in the near future. Beginning in 2012, wholesale contracts

indicate that the price for peaking resources will again justify the use of load management during

peak periods.

With the continued focus on carbon fuels, such as coal, and the anticipated increase in the use of

electricity as a clean, environmentally friendly alternative energy source for consumer goods like

electric vehicles, peaking capacity will be an issue in the future. The use of load management

using customer-owned generation is one affordable alternative that will help Randolph Electric

Membership Corporation maintain a reliable, affordable supply of electricity to our members.

I urge the agency to reconsider these restrictions on peak shaving and demand reduction

contained in the final rules and to amend the rules so as not to diminish the value of these

programs to our consumer-owners.

If you have additional questions or would like further information regarding demand side

management at Randolph Electric Membership Corporation please contact: Fred Smith, Manager

of Communications and Business Relations, Randolph Electric Membership Corporation, P.O.

Box 40, Asheboro, NC, 27204, fred.smith@randolphemc.com.

Sincerely,

~~:fCY~

Executive Vice President and General Manager

cc: Robert Wayland

Melanie King

Kevin Bromberg, SBA