NEC

A Boar d o f Director s C . Joh n Meeske , Presiden

t Presiden t Energy Market

Decisions, Inc. Mar y Bet h Gentleman , V P. , Policy Partne r Foley Hoag LLP Frederic k M . Sellars , V. P Administratio n Vic e Presiden

t TRC Mar k C . Kalpin , Secretar

y Senio r Partne r Hale and Dorr LLP Keit h H . Kennedy , Treasure

r Vic e Presiden

t Tech Environmental, Inc. Lawrence W . Plitch , Presiden t Emeritu s Principa l McCauley & Plitch, LLC Scot t 1 Mueller , Presiden

t Emeritu s Partne r LeBoeuf, Lamb, Greene & MacRae, L.L.P. William C. "Jack"

Sheehan, President

Emeritus President, Managing Director Financial Managent

Group, LLC Pete r W . Brown , Presiden

t Emeritu s Presiden t an d Membe r Brown , Olso

n & Wilson , P.C . Pentt i J Aalt o Presiden t PJ A Energ y System s Desig n Scot t M . Albert Principal & Northeast

Region Manager GDS Associates, Inc. Thoma s Atkin s Presiden t Pinpoint Power LLC Theodore A. Barten, PE Managing Principal Epstlon Associates, Inc. Joh n R . Bitte r Principa l Levita n & Associates , Inc . Chri s Bursa

w Manager , Regiona l regulator

y Affair s USGe n Ne w England , Inc . Stephe n H . Bryan

t Presiden t Bay Stale Gas Company Northern Utilities, Inc. Joseph Cavicchi Vice President Lexicon Inc. Davi d Corrsi n Executive Vic e Presiden

t Ameresco, Inc. Do n C . DiCristofar o Manager , Energ y an d Ai r Engineerin

g Earth Tech Michae l D . Ernst Vic e Presiden

t TransEnergie U.S. Ltd. Roge r D . Feldma

n Partne r Bingha mMcCutche

n LL P Rober t G . Erase r Senio r Progra mManage

r ENS R International Te d Gehri g President & Chief Operating Officer Weaver's Cove Energy And y Green e Principa l Navigan t Consulting In c Joh n Hanisch National Air & Energy Director Arcadis GAM John E. Higgins, Jr. Executive Advisor Concentric Energy Advisors, Inc. Shaw n Konar y Director , Environmenta

l Affair s Mirant New England, L.L.C. Denni s Lori a Principa l R. W. Beck

Inc. Mar k Magya r Managin g Director Energy Management

Group Jame s P . Sweene

y Presiden t Cos t Containmen

t Inc . , Pete r Zschokk e VPSlate Regulatory Policy, US Transmission Co. National Grid USA NEC A Administrativ e Directo r Loi s W . Lawso

n 

# Northeas tEnerg y an d Commerc e Associatio

n 104 0 Grea t Plain Avenu

e • Needham

, Massachusett

s 02492-251 7 PHONE : (781 ) 449-595 9 • FAX : (781 ) 449-831 9 E-MAiL:lois@necanews.org . WEB : www.necanews.or g

Jun e 30 , 200 4 Mr . Rober

t T . Donaldson , Associat

e Directo r Busines s Complianc e Divisio n Burea u o f Wast e Preventio n Departmen

t o f Environmenta

l Protectio n On e Winter Street , Eight

h Floo r Boston , M A 0210 8 RE : Propose

d Amendments t o 31 0 CM R 7.0 0 an d 31 0 CM R 70.00 Dea r Mr . Donaldson : Th e Northeas t

Energy an

d Commerce Associatio n ("NECA" ) appreciate s thi s opportunit

y t o provid e inpu t

int o the Massaschusett

s Departmen

t o f Environmenta

l Protection' s ("DEP" ) propose d regulatio n change

s fo r engine s an

d turbine s (31 0 CM R 7.0 0 an d 31 0 CM R 70.00) . NEC A i s Ne w England' s oldes t and mos t

broadly based , non-profi t trad e association servin g the competitiv e electri c powe r industry . NEC A promote s environmentall y sound , reliable , an d cost-effectiv e wholesale an d retai l market

s fo r the productio n an

d deliver y o f energy . NECA' s divers e membershi p include s developers an

d owner/operators o f

competitiv e powe

r projects , regulate d an

d merchan t transmissio n an

d distributio n companies , powe r marketers an

d traders , fue l an d equipmen

t suppliers , powe

r consumers , environmenta l consultants , attorneys , consultin g engineers , an d othe r servic e provider s to th

e energ y industry . NEC A commends the DE P fo r th e positiv e aspect

s o f th e proposed regulation . Thes e include : (1 ) th

e streamlinin g o f

the permittin g proces s fo r distribute d generators throug h the propose d certificatio n process ; (2 ) accountin g fo r an d creditin g uni t

efficiencie s throug h the proposa l o f output-base

d standards ; an

d (3 ) th e exemptio n fromthe emission s limit s provide d fo r emergenc

y generator

s an d th e proposa

l t o revis e the definitio n o f emergenc

y (th e importanc e o f

whic h w e detai l a t th e en d o f thi s lette r o n pages 5 throug h 7) . However , NEC A ha

s serious concern

s wit h th e hearto

f th e propose

d regulation , namel

y th e extremel

y stringen

t"fue l an d technology-neutral " emission s limitations propose

d a s the criteri a fo r certificatio n eligibility . Whil e NEC A understands ma t the proposed regulatio n i s base d o n the "Mode l Regulation s fo r

the Output

o f Specifie d Ai r

Emission s fromSmaller-Scale Electri c Generation Resources " issue d b y the Regulator

y Assistanc e Projec t

("RAP" ) i nMr . Rober t T . Donaldson Jun e 30,200 4 Pag e 2 . lat e 2002 , NEC A believe s tha t thes e model regulation s ar e flawe d an

d tha t their developmen

t di d not include a n ope n an d vali d stakeholde

r process . Th

e Northeas t

States fo r

aCoordinate d Ai r

Us e Managemen

t ("NESCAUM") , the Ne w York Stat e Departmen

t o f Environmenta

l Conservation ("NYSDEC") , an

d man y other s hav e no t endorse d the RA P Mode l Rule . N o state s othe r tha n Connecticu

t hav e adopte d regulation s followin g the model rul e an d som e (e.g. , Ne w York , Ne w Hampshire ) hav

e developed o r

ar e developin g quite different rules . I n ligh t

o f this , adetaile d technica l suppor t document

mus t b e prepare d b y th e Massachusett s DE P befor e proceedin g furthe r wit h thi s rule . Thi s documen

t shoul d include a

n analysi s o f

whethe r the propose

d emission limitatio n ca n b e achieve d usin g best

availabl e contro l technology , th e potentia l economic impac t

on industrie s operating i n the Commonwealth , an

d the potentia

l effec t o n th e reliabl e operatio n o f th e regiona l electri c powe

r grid . Unde r th e propose d -regulation s a

n applican

t fo r certai n type s o f

project s ha

s th e optio n t o obtai n a

n individua l permit

i n lie u o f

the certificatio n base

d o n meetin g the stringen t limits . However , th

e mer e promulgatio n o f

aregulatio n listin g thes e stringen t standards ma

y pre-determin

e the Best

Availabl e Contro l Technology ("BACT" ) proces s require d fo r suc h a n individua l permit . Thus , whil e NEC A i s i n favo r o f fuel-neutral , output-base d performanc e standards , we recogniz e tha t havin g suc

h standards i s not possible du

e t o the inheren

t limitation s o f

technolog y (whic h ar

e reflecte d i n the BACT-analysi s process) . I n reality , th

e nee d fo r electri c reliabilit y and fue l diversificatio n "trumps " the nee d fo r settin g the extremel y lo w emission limit s currentl y proposed b y the DEP , whic h onl y ca n b e me t base d on the us

e o f natura l gas . N o particula

r technology shoul d b e rule d out du e t o it s limitations . Instead , les s efficien t and/o r highe r pollutin g technologie s shoul d bea r a n emission s fe e burden , a s discusse

d below , a

s a n incentiv e t o spu

r th e developmen

t o f mor e efficien t

an d cleane r technologies . NEC A ha s detaile d comment

s i n five area

s relate d t o the propose

d regulations : (1 ) the availability o f th e Pla n Approva

l option ; (2 ) th

e propose d emission s standards fo r distribute d generators ; (3 ) efficienc y considerations , (4 ) peaking versu s bas e load consideration s an

d a n alternativ e "market-based " approac h tha t woul d conside

r this ; an d (5 ) th e definitio n o f

"emergency. " Pla n Approva

l Optio n I t i s vita l tha

t the Pla n Approval optio n b

e availabl e fo r

al l source s rathe

r tha n limitin g thi s optio n t o a handfu l o f

sourc e types . Th

e propose d regulation s allo w engine s o r turbine s t o b

e operate d a s peaking powe r productio n units , loa

d shaving units , unit s i n a n energ y assistanc

e program , unit s tha

t produce mechanica

l powe r t o ru n pumps , unit s t o compres s natura l ga s a t apipelin e compresso

r station , an

d unit s burnin g landfill , digesto

r or othe r bioga s t o file fo r

atraditiona l applicatio n fo r approva l (e.g. , apermit) . These operation s ca

n hav e specifi c technica

l o r economic consideration s tha t should b e considered o n a case-by-cas

e review . Whil e NEC A i s encourage d tha t th e Departmen

t apparentl

y agrees wit h ou

r earlie r comment

s tha t thi s optio n i s vita l t o the liste d type s o f projects , NEC A see

s n o reaso

n no t t o allo w thi s optio n fo r al l applicant s sinc

e eac h woul d b e require d t o mee

t BAC T criteri at o the Department' s satisfactio n i f the Pla n Approval optio n i s selected . Connecticu t DE P ha s take n thi s approac

h i n it s recen

t distribute d generation regulations . Thi s woul d preven t th e Departmen

t frombein g i n the positio n o f havin g t o tr y t o lis t

i n advanc e al l categorie s tha

t migh t i n th e futur e hav

e ver y legitimate reason

s why the certificatio n criteri a ar e impossible t o mee

t fo r thei r particula r cases .Mr . Rober t T . Donaldso n Jun e 30 , 200 4 Pag e 3 . Propose d Emissio n Standards fo r Distribute d Generator

s A s detaile d below , NEC A recommends th e followin g changes t o th e propose d emission s standards . • Increas e the lowe

r siz e threshol d t o 30

0 kW ;

• Include mor

e achievable emission s standards fo r fuel s fo r th e firs t categor y o f limit s (installatio n after Januar y 1 , 2005 ) b y providin g fo r afue l Best

Availabl e Contro l Technolog y ("BACT" ) analysis ;

• Eliminat

e th e secon d an d thir d categorie s o f

limit s (installatio n on or

afte r May 1,2008) ;

• Rais e the ammoni alimi t fro m2 pp mt o 1 0 ppm ;

• Wor k toward s th

e developmen

t o f amarket-base

d approac

h by allowin g a

n emission s fe e system , suc h a s afee-base

d syste msimila r t o wha t Ne w Hampshir

e ha s enacte d o r a n allowanc e system , a s a n alternativ e t o the emission s standards . Suc h asyste mwould , b y it s nature , conside r uni t efficiencie s an

d differentiat e betwee

n heav y an d ligh t us e (se e nex t sections) . Unde r th e propose d change s t o 31 0 CM R 7.00 , the DE P i s proposin g ver

y stric t emission s standards fo r ne w distribute d generator

s fo r non-emergenc

y use . I t

i s unlikel y tha

t an y ne w diesel (liqui d fuel ) generator s wil l b e able t o mee

t thes e propose

d standards eve

n wit h BACT . I f

owners an

d operators o f small-scale diesel generator s wis h t o us

e thei r unit s fo r

non-emergenc

y generation , th

e resultin g application s fo r

individua l permit s unde r 31 0 CM R 7.2 6 wil l caus e a n increase

d workloa d fo r

th e Departmen

t an d negat e the underlyin g purpos e o f the proposed regulator

y revisions . Th

e Jun e 200 3 NESCAU M repor

t "Stationar

y Diese l Engine s i n the Northeast : A n Initia l Assessmen t o f the Regiona

l Populatio n Contro l Technolog y Operation s an d Ai r Quality Polic y Issues " states : "stationar y diesel engine s are , b y alarg e margin , th e most commonly use

d engine s fo r

distribute d generation. " A s th e proposed distribute d generato r regulation s ar

e currentl y written , ver

y fe w diesel (liqui d fuel ) distribute d generato r engine s wil l b

e abl e t o b

e i n complianc e withou t

obtainin g a

n individua l permit , eve

n i f postcombustio n control s wer

e added. 1 Th e NESCAU M repor

t indicate s tha

t selectiv e catalyti c reductio n ("SCR" ) technolog y ha s bee n successfull y applie d t o larg e diesel engine s wher e i t ca n achieve NO xreduction s o f 80-90 % or

more . However , these system

s ar e mor e cos t effectiv e fo r

larg e engine s tha

t operat e frequently . Les s costl y NO x contro l strategie s include injection-timin g adjustments ; generally provide mor e modest reduction s on th

e orde r o f 10-20% . Thus , ther

e ar e no cost-effectiv e control s availabl e yet tha t wil l lowe

r NO xemission s fromsmalle

r scal e diesel engine s or

thos e tha t operat e infrequentl y t

o the propose

d levels . Th

e us e o f SC R does not

eve n guarante

e tha t the propose

d emission limit s wil l b

e met. 2

1 Fo r example , usin g AP-4 2 emissio n factors , a1-MW

, 4-strok e lean-bur n diese l (liqui d fuel ) engin

e ha s oxide s o f nitroge n ("NO x " ) emission

s o f mor e tha n 19 lbs/MW

h whic h i s mor e tha n thirty-on

e times th e propose d standar d o f 0. 6 lbs/MW

h fo r ne w DG s installe d befor e Ma y 1 , 2008 . Th

e estimate d P M emission

s o f 1 lb/MW h ar e highe r tha n th e propose d standar d o f 0.7 lbs/MWh .

2A ne w 2-M W Caterpilla

r XQ2000SCR

, 4-strok e diese l reciprocatin

g engin e wit h SC Rtha t reduce s NO xemission

s b y 90 % wil l no t mee t th e standard s fo r ne w DG s - eve n thoug h tha t engin e currentl y represent

s BACT . Th

e estimate d NO xemission

s fromth e engin e wit h SC Rwhic h represent

s BAC T ar e 1. 9 lbs/MWh , whic

h i s thre e time s th e propose d standar d o f 0. 6 lbs/MW

h fo r ne w DG s installe d befor e Ma y 1 , 2008 .Mr . Rober t T . Donaldson Jun e 30 , 200 4 Pag e 4 . NEC A ca

n onl y suppor

t th e propose

d stringen

t standards durin g the firs t phas e (unit s installe d after Januar y 1 , 2005 ) i f

the y becom e applicabl e onl y t o natura l ga s firin g an

d achievable limit s ar

e establishe

d fo r othe r fuel s (e.g. , b y allowin g afue l BAC T analysis ) s o lon g a s th e DE P establishe s amarket-base d syste mi n th e nea r future. 3 NEC A als o urge s tha t the secon d and thir d phase

s o f limit s (effectiv e i n 200 8 an d 2012 ) b

e eliminate d sinc e the abilit y o f an y ne w reciprocatin g engine s o r turbine s t o achiev

e these stringen t limit s i n acost-effectiv e manne r i s highl y speculativ e a t thi s time . Thes e limit s becom e unnecessar

y i f amarket-base

d approac

h t o regulatin g thes e source s i s adopte d withi n th

e nex t fe w year s a s recommende

d below . NEC A als o recommends tha t th e lowe r size threshol d fo r

thi s regulatio n b

e se t t o 30 0 kW . Regulatin g the extremely smal l source s i s unnecessar y becaus e thei r tota l emission s burde

n i s mino r

relativ e t o the significan t

administrativ e burde

n t o bot h sourc e owners/operators an

d th e DEP . DEP' s existin g regulator y cutof f fo r these source s i s approximately 30 0 k W an d lowerin g thi s b y almos t a n orde r o f magnitud e ma y lea d t o anumbe

r o f potentiall y difficul t

procedura

l issues suc

h a s addressin

g these changes i n th

e Titl e V operatin g permi t progra mfo r the majo r

sources . Combined Hea

t an d Powe r Credi t I t i s recommende

d tha t th e regulation s provide fo r a n emission s credi t

i n Combined Hea

t an d Powe r (CHP ) applications , provide d tha t th e propose d efficienc y standar

d does no t

penaliz e som

e efficien t system s whil e allowin g othe

r inefficien t

systems . CH

P system s tha t sav e energ y ove r conventiona

l system s wil l mee

t th e followin g formula :

Echp"^"(H c hp*(E

conv /H conv) ) ^ E con v wher e E Ch

p an d Hch

Par e electrica

l an d heating efficiencie s o f CHP an d E con v an d Hc 0n v ar e efficiencie s o f conventiona

l system s displaced . E con v shoul d instea d b e th e margina l delivere d efficienc y fo r electricity , wit h alikel y valu e o f

betwee n 0.3 0 an d 0.40 . Alternativ e "Market-Based " Approac h Th e regulation s nee

d t o recogniz e the environmenta l difference s betwee

n system s tha t operat e frequentl y an d thos e tha

t onl y ru n occassionally . Expensive afte r treatment s provide littl e environmenta l benefi t i n peake r system s whe n the peaker

s d o no t run . Cleane

r system s shoul d b

e encourage

d t o operat

e mor e frequentl y tha

n dirtie r systems . NEC A believe s tha t amarket-base

d syste mcoul d bes

t addres s bot

h th e frequenc y o f

operation an

d th e combined hea

t an d powe r credit . Realizin g tha

t th e developmen

t o f amarket-base

d approac

h ma y requir e alon g lea

d time , NEC A encourage s th

e DE P to immediately wor

k toward s th

e developmen

t o f amarket-base

d syste mto replace thes e standards a

s soo n a s possible . A s state

d previously , a

s a n interi mmeasur

e whil e amarket-base

d syste mi s bein g developed ove r the next severa l years , NEC A recommend s tha t mor e reasonabl

e fuel

specifi c standards b

e developed an

d adde d to th e existin g initia l standard s whic h woul d the

n b e applicable

3 Include d i n thes e change s shoul d b e a n alternativ

e limi t fo r al l fuel s o f

10 pp mfo r ammoni ainstea d o f th e propose d 2 pp mlimi t sinc e thi s extremel

y stringen t lowe r limi t is simpl y neithe r practica l no r necessar y for thes e smalle r source s o f ai r pollution .Mr . Rober t T . Donaldso n Jun e 30,200 4 Pag e 5 . fo r natura l ga s only. 4 These additiona l standards woul d b

e fo r sources installe d o n or

afte r Januar y 1 , 2005 firin g fuel s othe

r tha n natura l gas . On e exampl e o f a"market-based " syste

mtha t NEC A recommends b

e considered i s th

e emission s fe e syste mtha t i s bein g use

d by Ne w Hampshire . A s the NESCAU M repor t states : "innovativ e regulator

y approache s ca

n provide attractiv e alternative s t o mandating costl y retrofi t controls . Ne w Hampshir e ha s introduce d aprogra

mo f emission s fee s fo r

smal l diese l generators . Fee

s ar e impose d pe r to n o f NO xgenerate

d an d ar e schedule

d t o increas e ove

r time . Simila

r incentiv e programs coul d b e use d t o promot

e les s pollutin g engine s elsewhere , wit h resultin g revenue s applie d t o research , developmen t an d demonstration an

d t o suppor

t availabl e cleane

r technologies . Anothe

r optio n woul d b

e t o requir e distribute d generator

s t o obtai n pollutio n allowances , especiall y wher e emission s budge t an d tradin g programs alread y exist. " Charge s unde

r the Ne w Hampshir

e emission s fe e syste

mrang e from$40

0 t o $800 pe

r to n o f NO x emissions , dependin

g on whethe

r emission s occu

r durin g the summe

r ozon e season , an

d ar e schedule

d t o increas e t o $50

0 t o $1,000 pe

r ton , respectively , i n 2005 . Smal l engine s (i.e. , thos e wit h NO xemission s belo w 5 tpy ) an

d emergenc

y generator

s ar e exempted . NEC A recommends tha t Massachusett

s conside r asimila r emission s fe e syste

mtha t woul d appl

y t o generator s use d t o mee t economic deman

d response . Unde

r suc h aplan , unit s wit h annua l emission s i n deman d respons e mod e exceedin

g acertai n threshol d woul d b e subjec t t o emission s fees . Th

e fe e woul d no t b e require d fo r

unit s tha t ru n durin g period s o f

emergenc y (includin g period s o f

OP-4 , Actio n 1 2 or highe r operations) . Definitio n o f

Emergenc

y Th e Independen

t Syste mOperato

r fo r Ne w Englan d ("IS O Ne w England " o r "ISO") , the entit

y responsible fo r

operatin g Ne w England' s bul k powe r system , ha

s determined tha

t electri c load i n parts o f Massachusett

s coul d excee

d th e capabilit

y o f existin g electri c generatin g an d transmissio n resource s i n the region . Unde

r certai n conditions , these existin g resource s ma y not b e abl e t o supply the loa

d withou t overloadin g the line s o r

reducin g voltage . I n 2002 , the IS O reporte d tha t tw o t o fou r

time s pe r yea r the IS O was onl y on

e ste p awa y fromsheddin

g 5 0 t o 10

0 megawatt

s ("MW" ) o f

load fo r a s man y a s ten hours a t atime . Th

e Commonwealt

h need s t o act immediatel y t o ensur

e the continue d reliabilit y o f powe r suppl y i n Massachusetts . Withou t thi s reliability, Massachusett' s econom y an d busines s climat

e wil l severel

y suffer . Th e DEP' s inten

t t o amen d the definitio n o f

"emergency " to include situation s whe n IS O Ne w Englan

d declare s Actio n 1 2 unde r NEPOO L Operating Procedur e 4 ("O P 4" ) "Actio n Durin g A Capacit y Deficiency " o r

highe r fo r aspecifie d are

ai s strongly supported . Thi s wil l allo w back-u p generator

s t o participat e i n IS O Ne w England' s 30-minut e real-tim

e deman d response progra

m(the "emergency " deman d response program) . O P 4 , Actio n 12 , a

s i t i s referre d to , i s th

e star t o f brownout s wit h th

e nex t

4 Whil e th e initial limit s ar

e extremel y stringen t eve n fo r natura l gas-fire d distribute

d generators , NEC

A ca n suppor t the mfo r natura l ga s fired application

s abov e 30 0 k W i n siz e wit h th e importan t exceptio n o f ammonia . I t i s apparen t tha t man y application

s woul d requir e SC Rt o achiev e th e NO xlimi t

an d 2 pp mammoni

asli p is inappropriat

e for th e siz e o f generator s bein g regulate d her e an d doe s no t represen t BACT . NEC

A recommend

s 10 pp mfor th e ammoni a standard.Mr . Rober t T . Donaldson Jun e 30,200 4 Pag e 6 . ste p bein g involuntar

y interruption s o f

load . Thi s declaratio n i s take n ver y seriously b y the ISO . I n fact , eve n unde r the extrem

e weathe r condition s whic h occurred durin g the summe r o f 2002 , the IS O di d no t declar e O P 4 , Actio n 12 . Othe

r tha n o n Augus t

15 , 2003 , i n response to the majo r powe r failur e tha

t occurre d throughout

th e Northeast , thi s leve l ha s rarely bee

n declared - i t

i s trul y reserve

d fo r emergenc

y situations . Thi s declaratio n shoul d no t b e confuse d wit h othe

r IS O program s tha

t ar e enacte d fo r economic reason

s (suc h a s the ISO' s pric e response program) . O P 4 , Actio n 12 , a

s approve d b y the NEPOO L Participant s Committee on Jun e 26,2003 , is : "Implemen

t avoltag e reductio n o f fiv e percen

t (5% ) o f

norma l operatin g voltag e requirin g mor

e tha n 1 0 minute s t o implement . Interrup t Real-Tim

e Deman d Respons

e - 3 0 Minute s or

Les s Notificatio n (tha

t require s avoltag e reductio n t o b e implemented). " NEC A recommends tha

t the DE P use languag

e simila r t o the languag

e tha t the Connecticu

t DE P ha s proposed i n it s propose

d amendmen

t t o the definitio n o f

"emergency. " Thi s proposa l ha s bee n throug h the publi c hearing proces s an d i s expecte

d t o b e enacte d on Januar

y 1 , 2005 . The propose

d languag

e tha t the Connecticu

t DE P ha s propose d i n §22a-174-22(a)(4 ) tha t revise s the definitio n o f

emergenc

y is : "require s th

e operatio n o f

the emergenc

y engin e durin g the perio d o f

tim e i n whic h the Ne w England Regio n Syste mOperato

r begin s voltag e reduction s o r involuntar

y loa d interruption s withi n the Connecticu t load zone. " Thi s amendmen

t doe s no t

explicitl y us

e the ter mO P 4 , Actio n 1 2 because the Connecticu t Stat e Implementatio n Pla

n Revisio n Advisory Committe e ("SIPRAC" ) subcommittee o f the DE P tha t drafte d these propose

d regulation s wa

s concerne

d tha t IS O ma y chang e th e terminolog y i n th

e future . Thus , language wa

s use d tha t describe s O

P 4 , Actio n 12 . I t

i s not unti l O P 4 , Actio n 1 2 tha

t th e IS O ca n implemen

t voltag e reductions . Further , the definitio n does no t eve n identif y th e ISO-Ne

w England - but rathe r uses the Ne w England Regio n Syste mOperato

r terminolog y instea

d - t o accoun

t fo r an y futur e reorganizatio n or

renaming o f

tha t entity . W e d o no t believ e th

e language tha

t the DE P propose s i n it s revision s t o 31 0 CM R 7.0 0 i s adequate . Specifically , the proposed language : "Emergency shal l als o mea n when th

e imminen

t threa t o f apowe r outage i s likel y du

e to failur e o f the electrica

l suppl y o r whe n capacit y deficiencie s result

i n adeviatio n o f voltag e fromthe electrica l supplie r t o the premise s o f

thre e percen

t (3% ) abov

e or five percen t (5% ) belo w standar

d voltage. " shoul d b e replaced wit h th

e followin g languag

e tha t combine s th

e Massachusett s propose d languag

e alon g wit h wha

t th e Connecticu

t DE P i s using : "Emergenc

y shal l als o mea

n whe n the imminen

t threa t o f apowe r outag e i s likel y du

e t o failur e o f the electrica

l supply , suc

h a s whe n the operatio n o f

the emergenc

y engin e i s require d durin g th

e perio d o f

tim e i n whic h th

e Ne w England Regio n Syste mOperato

r begin s voltag e reduction s o r involuntar

y loa d interruption s withi n th

e Massachusett

s loa d zone(s). " Th e modifie d definitio n o f

"emergency " shoul d appl y t o al l ne

w an d existin g sources , whethe r the y ar e permitte d by rul e or

b y a n air pla n approval . Al l emergenc y engine s shoul d b

e treated consistently . Thus , the existin g ai r

regulation s fo r

emergenc y engine s a

s regulate d b y permi t

b y rul e nee

d t o b e amende d s o tha t th e definitio n o f

"emergency " als o applie s t o existin g emergenc y engine s located a

t facilitie s wit h existin g ai r

pla n approvals . Thus , th

e modifie d definitio n o f

"emergency " wil l b

e consistent ; otherwise , th e DE P wil l hav

e t o modif

y ever y air pla n approva l tha t ha s bee n issue d fo r emergenc

y engines .Mr . Rober t T . Donaldso n Jun e 30,200 4 Pag e 7 . A repor t prepare d b y Synaps

e Energ y Economics , Inc . fo r

the Environmenta

l Protectio n Agenc y ("EPA" ) entitle d "Results o f

Deman d Respons

e Emission s Modeling " b y Geof f Keith , Bruc e Biewald , Davi d White an d Mik e Drunsi c date

d August , 2003 an

d revise d Septembe

r 4 , 2003 , assesse

s th e impact s o f deman d respons

e ("DR" ) an

d energ y efficienc y programs i n Ne w England usin g a n electri c syste

m dispatc h model. 5 A s th

e repor t states , "whe n the D R resourc e i s use d t o mee t reserv e requirements , th

e result i s mor e efficien t

uni t commitment , reduced operatio n o f oil

- an d gas-fire d stea

munit s an

d increase d operatio n o f

combined-cycl e unit s i n Ne w England. " Eve n assumin

g al l D R i s fromdiesels , th e repor t showe d ane t benefi t i n ai r quality . Thus , b y changing the definitio n o f "emergency" , mor

e D Rresource s wil l provide th

e necessar

y reserv e capacit y an d regiona l ai r qualit y should actually improve . A s noted i n the Synaps

e report , "Ne w England ha s asmal l amoun

t o f quick-star

t capacit y relativ e t o th

e regiona l pea k load compare

d t o most

othe r contro l areas . Man

y analyst s hav e note d tha

t thi s require s larg e powe

r plant s t o operat

e mor e tha n the y woul d otherwis e hav

e t o i n orde

r t o maintai n sufficien t operatin g reserve s - capacit y tha t ca n b e provide d quickl y i n response t o unplanned losse s o f capacity . A ke y goa l o f thi s wor k fo r EP A wa s t o verif y tha t larg e unit s wer

e indee d bein g operated mor

e tha n necessar y i n Ne w Englan d t o mee t reserv e requirements , t o gaug

e th e probable emissio n impacts o f thi s dynamic , an

d t o estimat

e potentia

l emission reduction s tha t additiona l D Rcoul d provid e i f

i t wer e use d t o mee t operating reserv

e requirements. " Summar y NEC A i s supportiv e o f

th e Department' s effort s t o foster the developmen

t o f improve d combustio n an d pollutio n contro l technologie s tha t woul d lower

emission s o f

air pollutant s an

d improv e ai r

qualit y i n the Commonwealth . However , th e ensuin g requirement s canno

t b e s o stringen

t tha t the Commonwealth' s state d goal s o f promotin g ne

w technologies , increasin g th e availability o f renewabl e energy , ensuring the reliabilit y o f

the electrical supply system , and improvin g environmenta l qualit y ar e not realized . NEC A hope s tha t th e Departmen

t wil l recogniz e the importanc e o f reliabilit y an

d the rol e o f

fue l diversit

y i n promotin g reliability. NEC S hope s th e Departmen

t wil l giv e furthe r

consideratio n t o NECA' s proposal . W e ar e confident

tha t throug h suc

h adeliberativ e proces s th e appropriat

e balance tha

t i s neede d i n thi s instance ca

n b e realize d t o th

e ultimat e benefi t o f th e environmen

t an d th e regulate d communit

y alike .

5 A hypothetica

l near-ter myea r i n Ne w Englan d usin g projecte d 200 6 fue l prices an

d load s wa s modeled. Th

e modelin g include d 50 0 M W o f D Rcapability : 6

0 percen t loa d respons e an d 4 0 percen t generation . Th

e emission s impact s whe n D Ri s use d fo r reserve s result s i n significan

t decrease s o f criteri apollutan

t emissions , eve

n whe n i t i s assume d tha t th e D Ruse d t o mee t reserve s i s al l diese

l (e.g. , summe

r ai r impact s include : NO xdecrease

s 2 3 tons , sulfu r dioxid e decrease s 21 6 tons , carbo

n dioxid e decrease s 31,40 0 tons , particulat

e matte r 2. 5 micron

s o r less decrease s 12. 5 tons , particulat

e matte r decrease s 21. 2 ton s an d mercur y decrease s 0.2 9 tons) .

### Mr . Rober

t T . Donaldso

n Jun e 30,200 4 Pag e 8 . I n advance

, than k yo u fo r you r consideratio

n o f ou r comments . Sincerely ,
C . Joh n Meesk e Presiden t Northeas t Energ y an d Commerc

e Associatio

n

cc : Elle n Ro y Herzfelder

, Secretary, EOE

A Stephe n Pritchard , COO , EOE

A Rober t W . Golledge , Jr. , Commissioner , DE P Pau l G . Afonso , Chairman

, DT E W . Rober t Keating , Commissioner

, DT E Davi d L . O'Connor

, Commissioner

, DOE R