297 Robinson Road • Warren • VT • 05674 • P: 802.496.3414 • F: 802.496.2767 • www.northeastchp.org 

Massachusetts Department of Environmental Protection 

Business Compliance Division 

One Winter Street 

Boston, MA 02108 

Dear Mr. Donaldson: 

On behalf of the Northeast Combined Heat and Power Initiative (NECHPI), we are writing to 

comment on MADEP's proposed emission regulations for combustion turbines and engines. 

As noted in our October 9, 2003 comment letter on the draft of these regulations NECHPI 

supports the use of output based emission standards to stimulate efficiency. However, we were 

once again disappointed that DEP did not include an incentive for combined heat and power 

(CHP) as developed in the RAP Model Rule that DEP used as a basis for this Proposed Rule 

(PR). Considering that a member of DEP was the co-coordinator of the Model Rule project, we 

are unclear on the rationale to exclude the CHP provision of the Model Rule. The other cocoordinator was from CT DEP. We note that CT's proposed rule dated November 25, 2003 did 

include this provision. 

DEP's Background Document requests comments on this provision, and indicates it was not 

included as it would allow a project to "net out" of Best Available Control Technology (BACT), 

the consequence being a "dirtier," non-state-of-the-art engine or combustion turbine could be 

installed. We strongly disagree with this assertion. 

For engines, Phase II and III of the proposed emission standards are not BACT, they are more 

stringent than BACT as acknowledged in the RAP Model Rule Background Document. In fact, 

the RAP document suggested that the CHP incentive would be required to meet Phase III. 

The Model Rule provision simply recognizes the actual benefit of CHP and acknowledges that 

absent the heat recovery a boiler would need to be installed or an existing boiler would need to 

continue to operate at the facility. This would not allow a dirtier engine to be installed. As an 

example, a new gas-fired lean burn engine with heat recovery would need to have SCR installed 

with or without the CHP incentive. A typical such engine would have an uncontrolled NOx 

emission rate of about 4.7 lb/MW-h. The proposed NOx emission limit ranges from 0.6 down to 

Mr. Robert Donaldson 

June 29, 2004 
0.15 lb/MW-h (Phase I - III), thus requiring the use of Selective Catalytic Reduction (SCR) to 

control the NOx emissions. It is currently impossible to meet these limits without add-on 

controls. 

Using a typical heat recovery boiler in CHP mode with a power/heat ratio of 0.35/0.2 = 1.75, and 

DEP's ERP limit for a gas fired boiler of 0.035 lb/MMBTU, the "credit" would be 

approximately 0.085 lb/MWh according to the formula in the Model Rule. Thus, instead of 0.6 

lb/MWh, the emission limit would be 0.685 lb/MWh. This will still require the same engine 

with SCR, and while the limit is higher when attributed to the engine, the emissions that would 

otherwise result from the boiler do not occur. We believe that DEP is overlooking this detail if 

the focus remains on the engine. 

The PR is not a true, output-based regulation. It fails to reflect the actual energy produced, it 

fails to acknowledge the greater energy efficiencies achieved by CHP, and it is fundamentally 

unfair in its preference towards less efficient energy production. 

Output-based regulations are characterized by the United States Environmental Protection 

Agency as those that include output-based emission standards that relate emissions to the 

productive output of the process, thereby encouraging energy efficiency. In addition, outputbased regulations level the technological and economic playing field in energy production by 

allowing and promoting energy efficiency to compete on an equal footing with any other method 

of reducing emissions; e.g. combustion controls and add-on controls.1 

DEP has failed to provide any mechanism to acknowledge the actual energy output and 

emissions displaced as the result of CHP. The justification for this is the claim that such an 

acknowledgment would allow a project to "net out" of BACT, the consequences being a 

"dirtier," non state of the art engine or turbine. 

This.conclusion, as discussed above, is generally incorrect. It certainly does not provide a basis 

upon which to maintain fundamental inequities in a system that currently provides no incentives 

for energy efficiency. CHP reduces both energy consumption and emissions, locally and 

regionally, and has the added benefit of creating permanent emissions benefits by employing 

energy efficiency as an operational standard. 

As written, the PR actually creates a disincentive to increased efficiency and could have the 

unintended effect of delaying permanent and significant emission reductions in this region. The 

PR is contrary to the Office for Commonwealth Development's Climate Protection Plan for 

Massachusetts. 

The Massachusetts Climate Action Plan; Spring 2004; (Plan) begins with the salutary statement 

that the Commonwealth has determined that it is going to put an emphasis on actions, not 

discourse, in addressing climate change. Those actions include policies to promote energy 

efficiency, smart business practices, and improving the environment (page 3 - letter from 

Governor Mitt Romney). 

1

 Output-Based Regulations: A Handbook for Air Regulators; April 22, 2004; U.S. Environmental Protection 

Agency Office of Atmospheric Programs; Draft Final Report) 
The Plan's Action Item 5 is "Business, Industry, and Institutions as Climate Protection Partners." 

This Item calls for, among specific points, the promotion of distributed generation, combined 

heat and power [emphasis added], and renewable energy at companies and institutions (page 9). 

Action Item 6 specifically encourages regulatory policies that will make it easier to site smallscale energy efficiency and renewable energy projects (page 10). 

These action items are expanded upon later in the Plan, leaving no doubt as to the policy the 

Commonwealth says it is 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). 
In light of these direct policy statements, DEP's current position and reluctance to craft the PR as 

a mechanism to encourage energy efficiency, promote the use of CHP and streamline permitting 

is a cause of great concern. The CHP provision of the PR flies in the face of these direct 

expressions of the Commonwealth's position on climate change. 

The PR is Contrary to the July 24, 2001 Ozone Transport Commission Statement of Principles to 

Encourage Energy Efficiency and Clean Energy Production and Use (attached). The OTC 

determined that CHP development and promotion was sufficiently important to its mission that it 

includes the following Principle in its July 24, 2001 (MISC 01-2) Statement, a copy of which is 

included here and is explicitly incorporated by reference into these comments: 

ENCOURAGE COMBINED HEAT AND POWER 

Clean combined heat and power (CHP) should be encouraged. CHP with 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 CHP should be identified, and economic incentives 

should be investigated, as steps towards greater implementation of CHP. 

The NECHPI is an organization dedicated to the premise that greater CHP deployment is in the 

best economic and environmental interests of the U.S. We are committed to doubling the use of 

CHP in the Northeast by 2010, a goal shared at a national level by the U.S. Department of 

Energy and the U.S. Environmental Protection Agency. NECHPI is an alliance of more than 40 

organizations which includes CHP project developers and equipment manufacturers, electric and 

gas utilities, consultants, air regulators, state government agency representatives, universities and 

other organizations involved in the energy and environmental field. The majority of these 

entities are either based in or do considerable business in Massachusetts. 

The NECHPI hopes it can enter in a substantive dialog with the DEP on the issues and concerns 

highlighted in this letter. It is our goal to provide a positive resource to the State to promote 

better understanding of the benefits of CHP. We would welcome the opportunity to meet to 

discuss this topic. 

Thank you for your consideration of these comments. 

Sincerely, 

Erin Russell-Story 

Executive Director 

Northeast Combined Heat and Power Initiative 

i 
Dale Raczynski, P.E. 

Principal 

Epsilon Associates, Inc. 

Vice Chair - Permitting/Emissions Sub-Committee 

www.northeastchp.org 

cc: 

James Colman, Assistant Commissioner, Bureau of Waste Prevention, MADEP, One Winter 

Street, Boston, MA 02108 

Secretary Douglas I. Foy, Office for Commonwealth Development, 100 Cambridge Street, Suite 

1010, Boston, MA 02114 

Secretary Ellen Roy Herzfelder, Executive Office of Environmental Affairs, 100 Cambridge 

Street, 9th Floor, Boston, MA 02114 

Gerry Bingham, Policy and Markets Coordinator, Renewable Energy and Climate Change 

Group, Massachusetts Division of Energy Resources, 100 Cambridge St., Suite 1020, Boston, 

MA 02114 
MISC 01-2 

OZONE TRANSPORT COMMISSION 

STATEMENT OF PRINCIPLES TO ENCOURAGE ENERGY EFFICIENCY 

AND CLEAN ENERGY PRODUCTION AND USE 

WHEREAS the production and use of energy can result in significant amounts of 

pollutant emissions into the atmosphere; and 

WHEREAS the emissions that result from energy production and use must be evaluated 

and controlled to ensure protection of public health; and 

WHEREAS concerns have been raised regarding the reliability and cost of energy 

supply in several areas of the United States; and 

WHEREAS pollution prevention and energy efficiency can minimize emissions and 

enhance energy reliability and reduce energy costs; and 

WHEREAS pollution prevention and energy efficiency are two ways to minimize pollution 

while meeting energy needs and should be considered prior to new generation; and 

WHEREAS energy issues fall within the regulatory and policy jurisdiction of multiple 

State departments and agencies, so cooperation and coordination among such 

organizations is essential to ensure optimal energy policies; 

THEREFORE, BE IT RESOLVED that the protection of public health and the 

environment must be fundamentally integrated into decisions regarding energy policy; 

and 

FURTHERMORE that the reductions of multiple pollutants through energy efficiency and 

other means should be encouraged in energy policy decisions; and 

FURTHERMORE that OTC will utilize the attached set of principles to guide its 

involvement in energy-related issues; and 

FURTHERMORE that OTC will work with State and Federal energy and utility 

regulators, and the Independent System Operators (ISOs), to implement energy policies 

that are designed to protect public health and environment while ensuring reliability at 

reasonable cost; and 

FURTHERMORE that OTC will reach out to its State energy counterparts to discuss 

their concerns and to cooperatively develop potential opportunities and 

recommendations for joint regional action at the 2002 OTC Winter Meeting. 

Approved July 24, 2001 
STATEMENT OF PRINCIPLES 

TO ENCOURAGE ENERGY EFFICIENCY AND CLEAN ENERGY PRODUCTION AND USE 

ENSURE COMPATIBILITY OF ENERGY AND AIR QUALITY GOALS 

Energy and economic goals can be met through a sustainable energy policy without eroding air quality and 

public health mandates. Clean generation, energy efficiency, energy waste reduction, and conservation can 

and must be integrated into policies for developing sufficient and reliable energy capacity. In addition, 

energy efficiency and conservation can enhance energy reliability, and assist in reducing peak electricity 

prices and overall costs. 

SEEK MULTIPLE POLLUTANT REDUCTIONS AND REDUCTIONS OF TRANSPORTED POLLUTION 

Provisions for reducing emissions of multiple pollutants and reductions in the transport of pollutants should 

be considered in the context of new energy initiatives. Concurrent reductions of pollutants should be 

encouraged at existing electric generation units. 

ENCOURAGE COMBINED HEAT AND POWER 

Clean combined heat and power (CHP) should be encouraged. CHP with 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 CHP should be identified, and 

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

PROVIDE INCENTIVES FOR ENERGY EFFICIENCY IN AIR QUALITY PROGRAMS 

Whenever possible, incentives for energy efficiency, clean distributed generation, and renewable energy 

should be integrated into regulatory programs, such as air emissions trading mechanisms and air source 

permitting programs. 

ESTABLISH INFORMATION SYSTEMS AND PUBLIC INFORMATION 

Information systems are critical for educating the public, verifying data, and developing innovative programs. 

Energy conservation and efficiency can be encouraged through disclosure of emission attributes. Systems 

need to be developed and/or utilized that allow data to be gathered, verified, and shared to support energy 

and environment regulatory programs, promote informed consumer choice, and to promote energy efficiency 

and clean power through increased consumer awareness of the environmental impacts of energy use. 

ENSURE COORDINATION AMONG ENERGY AND ENVIRONMENTAL OFFICIALS 

State and Federal energy and environmental officials must seek out opportunities to jointly develop optimal 

energy policies and to incorporate emerging cleaner energy technologies. Whenever possible, such joint 

energy efficiency policy initiatives should be promoted nationally or over the' broadest region possible. 

PROVIDE FOR SUSTAINABLE TRANSPORTATION AND LAND USE POLICIES 

Cleaner and more efficient forms of transportation are crucial to reducing energy demand and its associated 

public health, environmental, reliability, and cost impacts. Therefore, energy and environmental needs 

should be incorporated into land use planning, sustainable development practices, and other related 

activities. 

LEAD BY EXAMPLE THROUGH STATE AND FEDERAL GOVERNMENT ACTIONS 

Governments should lead by example in promoting energy efficiency and conservation through procurement 

and other actions related to energy use.