----- 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

>

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