29

7 Robinso n Roa d• Warre n • V T • 0567

4 • P: 802.496.341 4 • F : 802.496.276 7 • www.northeastchp.or

g

Massachusett

s Departmen

t o f Environmenta

l Protectio n Busines s Complianc e Divisio n On e Winte r Stree t Boston , M A 0210 8

Dea r Mr

. Donaldson : O n behal f o f th e Northeas t

CombinedHea

t an dPowe r Initiativ e (NECHPI) , w

e ar e writin g t

o commen t o n MADEP' s propose

demission regulation s fo r combustion turbine s an

dengines

. A s note di n ou r Octobe r 9 , 200 3 commen

t lette r on th e draf t o f these regulation s NECHP I support s th e us e o f output base d emission standard

s to stimulat

e efficiency

. However , w e wer e onc e agai n disappointedtha

t DE P di dnot include a n incentiv e fo r

combine dhea

t an dpowe r (CHP) a s develope

di n th e RA P Mode l Rul e tha

t DE P use d a s abasi s fo r

thi s Propose

dRule (PR)

. Considering tha

t amembe r o f DE P wa s th e co-coordinato

r o f th e Mode l Rule project , w

e ar e unclea r on th e rational e to exclud

e th e CH P provisio n o f

th e Mode l Rule

. Th

e othe r co coordinato

r wa s fro mC T DEP

. W

e not e tha t CT' s propose

drul e date

dNovembe

r 25 , 2003 di d includ e thi s provision

. DEP' s BackgroundDocumen t request s comment

s on thi s provision , an

dindicate s i t

wa s no t include da

s i t woul dallo w aprojec t

to "ne t out " o f Best Availabl e Contro l Technology (BACT) , th e consequenc

e bein g a"dirtier, " non-state-of-the-ar t engin e o r combustio n turbin e coul db e installed

. W

e strongly disagre

e wit h thi s assertion

. Fo r engines , Phas

e I I an dII I o f th e propose demission standards ar

e no t BACT , the

y ar e mor e stringen t tha n BAC T a

s acknowledgedi n th

e RA P Mode l Rule BackgroundDocument

. I n fact , th e RA P documen

t suggeste d tha t th e CH P incentiv e woul db

e require dto mee

t Phas e III

. Th e Mode l Rule provisio n simpl y recognize s th e actua l benefi t o f CH P an dacknowledge s tha

t absen t th e hea t recover y aboiler woul dnee

d to b e installe do

r a n existin g boiler

woul dnee

d t o continue to operat

e a t th e facility

. Thi s woul dnot allo w adirtie r

engin e t o b e installed

. A s a

n example , ane

w gas-fire dlea

n bur n engin e wit h hea

t recover y woul dnee

d to hav e SC Rinstalle d wit h o r withou t th e CH P incentive

. A typical suc h engin e woul dhav

e a n uncontrolle dNO x emission rat

e o f abou t 4. 7 lb/MW-h

. Th

e propose dNO x emission limi t

ranges fro m0. 6 down t

o Mr

. Rober

t Donaldson Jun e 29 , 200 40.1 5 lb/MW- h (Phas e I- III) , thu s requirin g th e us e o f Selective Catalyti c Reductio n (SCR ) t o contro l th e NO x emissions

. I t

i s currentl y impossible to mee t these limit s withou t

add-o n controls

. Usin g atypical hea

t recover y boiler i n CH P mod e wit h apower/hea

t rati o o f 0.35/0. 2 = 1.75 , an

d DEP' s ER

P limi t fo r aga s fire dboiler

o f 0.03 5 lb/MMBTU , th

e "credit " woul db

e approximatel

y 0.08 5 lb/MW h according t o th e formul ai n th

e Mode l Rule

. Thus , instea do f 0. 6 lb/MWh , th

e emission limi t

woul db e 0.68 5 lb/MWh

. Thi s wil l stil l requir e th e sam e engin e wit h SCR , an dwhil e th e limi t i s highe r when attribute dto th

e engine , th

e emission s tha

t woul d otherwis e resul

t fro mth e boiler d o no t occur . W

e believe tha

t DE P i s overlookin g thi s detail i f th e focu s remain s o n th

e engine

. Th e P Ri s no t atrue , output-base

dregulation

. I t

fail s to reflec t

th e actua l energ y produced , i t fail s t o acknowledg

e th e greate r energ y efficiencie s achieve

db y CHP , an

di t i s fundamentally unfai r i n it s preference toward s les s efficien t energ y production

. Output-base

dregulation s ar

e characterizedby th

e Unite dState

s Environmenta

l Protectio n Agenc y a s those tha

t include output-base

demission standard

s tha t relat e emission s to th

e productiv e outpu

t o f th e process , thereby encouragin g energ y efficiency

. I n addition , output

base d regulation s leve l th

e technologica

l an deconomi

c playin g fiel di n energ

y productio n by allowin g an

dpromotin g energ

y efficienc y to compet

e on a n equa l footin g wit h an

y othe r method o f reducing emissions ; e.g . combustio n control s an dadd-o n controls. 1 DE P ha s faile dto provide an

y mechanismt

o acknowledge th

e actua l energ y outpu t an d emissions displace

da s th e result o f CHP

. Th

e justificatio n fo r

thi s i s th e clai mtha

t suc h a n acknowledgmen

t woul dallo w aprojec t

t o "ne t out " o f BACT , th

e consequences being a "dirtier, " non stat

e o f th e ar t engin e o r turbine

. This.conclusion , a

s discusse d above , i s generall

y incorrect

. I t

certainly doe

s no t provide abasi s upon whic h t

o maintain fundamenta

l inequitie s i n asyste

mtha t currently provide s n

o incentive s fo r energ y efficiency

. CH

P reduce s bot

h energ y consumption an

demissions , locall y an

d regionally , an

dha s th e adde d benefi t o f creating permanen

t emission s benefit s by employing energ y efficienc y a

s a n operationa

l standard

. A s written , th

e P Ractually create s adisincentiv e to increase d efficienc y an

dcoul dhav

e th e unintende deffec t o f delayin g permanen

t an dsignifican t

emission reduction s i n thi s region

. Th e P Ri s contrar

y to th e Offic e fo r

Commonwealt

h Development' s Climat

e Protectio n Pla

n fo r Massachusetts

. Th e Massachusett

s Climat e Actio n Plan ; Spring 2004 ; (Plan) begin s wit h th e salutar y statemen

t tha t th e Commonwealt

h ha s determinedtha

t i t i s going t o put a n emphasi s o n actions , not discourse , i n addressin

g climat e change

. Those action s include policie s to promot e energ y efficiency , smar

t busines s practices , an

dimprovin g th

e environmen

t (pag e 3 - lette r fro m Governo r Mit t Romney)

.

1 Output-Base dRegulations : A Handboo k fo r Ai r Regulators ; Apri l 22 , 2004 ; U.S

. Environmenta l Protectio n Agency Offic e o f

Atmospheri c Programs ; Draf t Fina l Report )Th

e Plan' s Actio n Ite m5 i s "Business , Industry , an dInstitution s a

s Climat e Protectio n Partners. " Thi s Itemcall s for , amon g specifi c points , th

e promotio n o f

distribute dgeneration , combine d hea t an dpowe

r [emphasi s added] , an

drenewabl

e energ y a t companie s an

dinstitution s (pag

e 9)

. Actio n Item6 specificall y encourages regulator y policie s tha

t wil l mak e i t easie r to sit e small

scal e energ y efficienc y an

drenewabl

e energ y project s (pag

e 10)

. Thes e actio n item s ar

e expande

d upon late

r i n th e Plan , leavin g n

o doubt a s to th e polic y th

e Commonwealt

h say s i t i s implementing : A number of Massachusetts companies have already asked the state to address climate change through regulatory and incentive policies that

would grant them greater

certainty in their business planning while supporting their goal of being environmentally responsible. The state will be responsive to such concerns [emphasis added]. The state will also encourage all

Massachusetts businesses to see climate change as a business opportunity, focusing on those businesses that could offer new technologies and

products that lower demand for fossil fuels, cut

carbon emissions, and

create new jobs, particularly in the energy efficiency and renewable energy sectors (page 23). PROMOTE DISTRIBUTED GENERATION, COMBINED HEAT AND POWER, AND RENEWABLE ENERGY AT COMPANIES AND INSTITUTIONS. Changing how and

where energy is generated, and what is done with the resulting waste heat, can provide significant opportunities

for efficient energy use. In combined heat and power systems, fuel

is used to generate electricity. The resulting waste heat is used for heating buildings, heating water, process heating, etc. Where standard centralized power plants use roughly 40% of the fuel they burn to produce electricity, combined heat and power systems use up to 80% to produce electricity and heat.

... [emphasis added] The state will

encourage the installation of combined

heat and power applications, other forms of clean distributed

generation, and

the installation of

new renewable energy sources through such measures as streamlined permitting and

interconnection standards (page 25). ENCOURAGE REGULATORY POLICIES THAT

WILL MAKE IT

EASIER TO SITE SMALL-SCALE ENERGY EFFICIENCY

AND RENEWABLE PROJECTS. The Division of

Energy Resources and

the Department

of Environmental

Protection, in cooperation with the Department of Telecommunications and Energy, and

the State Office of Building Standards, will

be asked to review our

existing laws and

regulatory policies, and

make recommendations that facilitate the introduction of distributed

energy sources, giving special

attention to interconnection standards for fuel cells, combined heat and power [emphasis added], standby rates, air emission standards, and renewables. Recommendations for future legislation and

regulatory streamlining are the expected outcomes of

this action step (page 31).I n ligh t

o f thes e direc t polic y statements , DEP' s curren t positio n an

d reluctanc e to craf

t th e P Ra s amechanis

mto encourag

e energ y efficiency , promot

e th e us e o f CH P an dstreamlin

e permittin g i s acaus e o f grea t concern . Th

e CH P provisio n o f

th e P Rflie s i n th

e fac e o f these direc t expressions o f

th e Commonwealth' s positio n on climat e change

. Th e P Ri s Contrar

y to th e July 24 , 200 1 Ozon

e Transpor

t Commission Statemen

t o f Principle s t

o Encourag e Energ y Efficienc y an

dClea n Energ y Productio n an

d Us e (attached)

. Th

e OT C determine d tha t CH P developmen

t an dpromotio n wa

s sufficientl y importan

t to it s missio n tha

t i t include s th

e followin g Principl e i n it s July 24 , 200 1 (MIS C 01-2 ) Statement, acop y o f whic h i s includedher

e an di s explicitl y incorporatedby referenc e into these comments : ENCOURAGE COMBINED HEAT AND POWER Clean combined

heat and power (CHP) should

be encouraged. CHPwith low emissions can provide superior

energy efficiency, which in turn protects air quality and

public health, and

assures continued

power reliability. Structural, regulatory, and policy barriers that

impede application of

CHPshould

be identified, and

economic incentives should be investigated, as steps towards greater implementation of

CHP.
Th e NECHPI i s a

n organizatio n dedicate

d to th e premis e tha

t greate r CH P deploymen

t i s i n th e bes t economi c an denvironmenta

l interests o f

th e U.S

. W e ar e committe dt o doublin g th e us e o f CH P i n th e Northeas t

by 2010 , agoa

l share da t anationa l leve l b y th

e U.S

. Departmen

t o f Energ y an dth e U.S

. Environmenta

l Protectio n Agency

. NECHP I i s a n allianc e o f

mor e tha n 4 0 organization s whic h include s CH P projec t developer

s an d equipmen

t manufacturers , electri c an d ga s utilities , consultants , air regulators , stat

e governmen

t agenc y representatives , universitie s an d othe r organization s involve di n th e energ y an denvironmenta

l field. Th

e majority o f

thes e entitie s ar e eithe r base d i n o r d o considerabl

e busines s i n Massachusetts

. Th e NECHPI hopes i t

ca n ente r i n asubstantiv

e dialo g wit h th

e DE P o n th e issues an

d concerns highlighte di n thi s letter

. I t i s ou r goa l t o provide apositiv e resourc e t o th e Stat e to promot

e bette r understandin

g o f th e benefit s o f

CHP

. W e woul dwelcom

e th e opportunit

y to mee t to discus s thi s topic

. Than k you fo r you r consideratio n o f

thes e comments
. Sincerely ,

Eri n Russell-Stor

y Executive Directo r Northeast CombinedHea

t an dPowe r Initiativ e

iDale Raczynski , P.E

.

Principa l Epsilo n Associates , Inc

. Vic e Chai r - Permitting/Emission s Sub-Committe e www.northeastchp.or

g

cc : Jame s Colman , Assistan

t Commissioner , Burea

u o f Wast e Prevention , MADEP , On e Winte r Street, Boston , M A 0210 8 Secretar y Douglas I

. Foy , Offic e fo r Commonwealt

h Development , 10

0 Cambridg e Street

, Suit e 1010 , Boston , M A 0211 4 Secretar y Elle n Ro y Herzfelder , Executiv e Offic e o f Environmenta

l Affairs , 10

0 Cambridge Street , 9t h Floor , Boston , M A 0211 4 Gerr y Bingham , Polic y an

dMarket s Coordinator , Renewabl e Energ y an dClimat e Chang e Group , Massachusett

s Divisio n o f

Energ y Resources , 10

0 Cambridge St. , Suit

e 1020 , Boston , M A 0211 4MIS C 01-2 OZON E TRANSPOR T COMMISSIO N STATEMEN T O F PRINCIPLE S T O ENCOURAG E ENERG Y EFFICIENC Y

AN D CLEA N ENERG Y PRODUCTIO N AN D US E
WHEREA S th e productio n an d us e of energ y ca n resul t i n significan t amount s o f pollutan t emission s int o th e atmosphere ; an d WHEREA S th e emission s tha t resul t fro m energ y productio n an d us e mus t b e evaluate d an d controlle d t o ensur e protectio n o f publi c health ; an d WHEREA S concern s hav e bee n raise d regardin g th e reliabilit y an d cos t of energ y suppl y i n severa l area s o f th e Unite d States ; an d WHEREA S pollutio n preventio n an d energ y efficiency ca n minimiz e emission s an d enhanc e energ y reliabilit y an d reduc e energ y costs ; an d WHEREA S pollutio n preventio n an d energ y efficiency ar e tw o way s t o minimiz e pollutio n whil e meetin g energ y need s an d shoul d b e considere d prio rt o ne w generation ; an d WHEREA S energ y issue s fal l withi n th e regulator y an d polic

y jurisdictio n of multipl e Stat e department s an d agencies , s o cooperatio n an d coordinatio n amon g suc h organization s i s essentia l t o ensur e optima l energ y policies ; THEREFORE , B E I T RESOLVE D tha t th e protectio n o f publi c healt h an d th e environmen t mus t b e fundamentall y integrate d int o decision s regardin g energ y policy ; an d FURTHERMOR E tha t th e reduction s o f multipl e pollutant s throug h energ y efficiency an d othe rmean s shoul d b e encourage d i n energ y polic y decisions ; an d FURTHERMOR E tha t OT C wil l utiliz e th e attache d se t o f principle s t o guid e it s involvemen t i n energy-relate d issues ; an d FURTHERMOR E tha t OT C wil l wor k wit h Stat e an d Federa l energ y an d utility regulators , an d th e Independen t Syste m Operators (ISOs) , t o implemen t energ y policie s tha t are designe d t o protect publi c healt h an d environmen t whil e ensurin g reliabilit y at reasonabl e cost ; an d FURTHERMOR E tha t OT C wil l reac h ou t t o it s Stat e energ y counterpart s t o discus s thei rconcern s an d t o cooperativel y develo p potentia l opportunitie s an d recommendation s fo rjoin t regiona l actio n a t th e 200 2 OT C Winte rMeeting

. Approve d Jul y 24 , 200 1STATEMEN T O F PRINCIPLE S T O ENCOURAG E ENERG Y EFFICIENC Y AN D CLEA N ENERG Y PRODUCTIO N AN D US E
ENSUR E COMPATIBILIT Y O F ENERG Y AN D AI R QUALIT Y GOAL S Energ y an d economi c goal s ca n b e me t throug h a sustainabl e energ y polic y withou t erodin g ai rquality an d publi c healt h mandates

. Clea n generation , energ y efficiency , energ y wast e reduction , an d conservatio n ca n an d mus t b e integrate d int o policie s fo rdevelopin g sufficien t an d reliabl e energ y capacity

. I n addition , energ y efficiency an d conservatio n ca n enhanc e energ y reliability , an d assis t i n reducin g pea k electricity price s an d overal l costs

. SEE K MULTIPL

E POLLUTAN

T REDUCTION

S AN D REDUCTION

S O F TRANSPORTE

D POLLUTIO

N Provision s fo rreducin g emission s o f multipl e pollutant s an d reduction s i n th e transport o f pollutant s shoul d b e considere d i n th e context o f ne w energ y initiatives

. Concurren t reduction s o f pollutant s shoul d b e encourage d at existin g electri c generatio n units

. ENCOURAG E COMBINE D HEA T AN D POWE R Clea n combine d heat an d powe r(CHP ) shoul d b e encouraged

. CH P wit h lo w emission s ca n provid e superio renerg y efficiency , whic h i n tur n protect s ai rquality an d publi c health , an d assure s continue d powe r reliability

. Structural , regulatory , an d polic y barrier s tha t imped e applicatio n o f CH P shoul d b e identified , an d economi c incentive s shoul d b e investigated , a s step s toward s greate rimplementatio n o f CHP

. PROVID E INCENTIVE S FO R ENERG Y EFFICIENC Y I N AI R QUALIT Y PROGRAM S Wheneve rpossible , incentive s fo renerg y efficiency , clea n distribute d generation , an d renewabl e energ y shoul d b e integrate d int o regulator y programs , suc h a s ai remission s tradin g mechanism s an d ai rsourc e permittin g programs
. ESTABLIS H INFORMATIO N SYSTEM S AN D PUBLI C INFORMATIO N Informatio n system s ar e critica l fo reducatin g th e public , verifyin g data , an d developin g innovativ e programs
. Energ y conservatio n an d efficienc y ca n b e encourage d throug h disclosur e o f emissio n attributes

. System s nee d t o b e develope d and/o rutilize d tha t allo w dat a t o b e gathered , verified , an d share d t o suppor t energ y an d environmen t regulator y programs , promot e informe d consume rchoice , an d t o promot e energ y efficienc y an d clea n powe rthroug h increase d consume rawarenes s o f th e environmenta l impact s o f energ y use
. ENSUR E COORDINATIO N AMON G ENERG Y AN D ENVIRONMENTA L OFFICIAL S Stat e an d Federa l energ y an d environmenta l official s mus t see k ou t opportunitie s t o jointl y develo p optima l energ y policie s an d t o incorporat e emergin g cleane renerg y technologies

. Wheneve rpossible , suc h join t energ y efficiency policy initiative s shoul d b e promote d nationall y o rove rthe ' broades t regio n possible

. PROVID E FO R SUSTAINABL E TRANSPORTATIO N AN D LAN D US E POLICIE S Cleane ran d more efficien t form s o f transportatio n ar e crucia l t o reducin g energ y deman d an d it s associate d publi c health , environmental , reliability , an d cos t impacts

. Therefore , energ y an d environmenta l need s shoul d b e incorporate d int o lan d us e planning , sustainabl e developmen t practices , an d othe rrelate d activities

. LEA D B Y EXAMPL E THROUG H STAT E AN D FEDERA L GOVERNMEN T ACTION S Government s shoul d lea d b y exampl e i n promotin g energ y efficiency an d conservatio n throug h procuremen t an d othe raction s relate d t o energ y use
.