# OZONE TRANSPORT COMMISSION

Connecticut

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Vermont Virginia Anna Garcia Executive Director 444 N. Capitol St. NW Suite 638 Washington, DC 20001 (202) 508-3840 FAX (202) 508-3841 e-mail: ozone@otcair.org September 8, 2010

Lisa P. Jackson, Administrator U.S. Environmental Protection Agency Air and Radiation Docket Mail Code 6102T 1200 Pennsylvania Avenue, N.W. Washington, DC 20460 RE: Proposed Rule - Docket No. EPA-HQ-OAR-2010-0295 DearAdministratorJackson: The Ozone Transport Commission (OTC) appreciates the opportunityto comment on EPA's proposed rule, "Standards of Performance for Stationary Compression Ignition and Spark Ignition Internal Combustion Engines (40 CFR Parts 60, 1039, 1042, et al.) ." The comments herein focus on three issues: (1) emission rates for stationary combustion engines; (2) fuel sulfur content limits; and (3) EPA's revised definition for emergency demand response. Emission Rates OTC supports EPA's proposal to align Federal restrictions on emissions of particulate matter (PM), oxides of nitrogen (NOX), non-methane hydrocarbons (NMHC) and carbon monoxide (CO) from new stationary compression ignition (CI) engines with displacementgreaterthan 10 I/cylinderwith corresponding non-road engine emissions standards forthese marine-propulsion and locomotive-type engines. (Smaller displacement new stationary engines, typically used for emergency generator sets, are already subject to New Source Performance Standards (NSPS) emissions limitationsthat took effect in 2006. They have been aligned with corresponding non-road emissions standards.) The proposed NSPS amendments also restricts the level ofsulfur permitted in diesel fuel used in new stationary CI engines greaterthan 10 I/cylinder. OTC is currently developing a draft model rule proposing to set emission limits on new, stationary internal combustion engines. The emission limit in the OTC draft model rule for new, non-emergency stationary internal combustion engines is 0.88 IbjMWh NOx (0.4 gjkWh).This is consistent with the Tier 4 non-road engine limitsthat EPA already promulgated (40 CFR 1039). The standards EPA is proposing for stationary engines should be consistent with the emission limits already promulgated for non-road stationary combustion engines. OTC also recommends that these limits should be applied to any portable engine that is on site for more than 30 days. These units should not be considered portable.EPA may also want to consider other provisions that may be included in the OTC model rule, which would potentially limit emissions or ensure compliance with the limits in the OTC model rule. These provisions include: o Monitoring and data reporting on generator usage; o Incentives for combined heat and power; o Incentives for innovative technologies; and o Emission standards for demand response programs. Fuel Sulfur Content OTC recommends that EPA reduce the maximum fuel sulfur content for stationary engines as soon as possible to 15 ppm, as already required for on-road and off-road mobile engines. This is consistent with the Northeast and Mid-Atlantic States' commitmentto pursue low sulfur in fuel limits to help meetthe reasonable progress goals set in their state implementation plans for regional haze. Emergency Demand Response The OTC urges EPA to eliminate its definition ofemergency demand response in the proposed rule as referenced in the preamble. The OTC also urges EPA to clarify the distinction between emergency response units and price response units in its definition of "Emergency stationary internal combustion engine" in the proposed rule. Because there are differences between the Independent System Operators (ISOs) in the treatment ofemergency generator operations, it is critical to have a clear distinction between true emergency operations and operation of uncontrolled engines in price response mode.We further recommend that EPA evaluate the definition of "real-time emergency generation resource" as specified in the current Independent System Operator (ISO) New England, Inc. Transmission, Markets and Services Tariff, FERC Electric Tariff No.3, issued December 22, 2004, which states:

"Real-Time Emergency Generation Resource is Distributed Generation whose Federal, State and/or local air quality permits limit operation in response to requests from the ISO to the times when the ISO implementsvoltage reductions offive percent of normal operatingvoltage that require more than 10 minutes to implement.A Real-Time Emergency Generation Resource must be capable of: (i) curtailing its end-use electric consumption from the New England grid within 30 minutes of receiving a Dispatch Instruction; and (ii) continuing that curtailment until receiving a Dispatch Instruction to restore consumption." The OTC understandsthe need for emergency generation and on-peak demand response to ensure the reliable delivery ofelectricity by the various ISOs in our region. As we saw in 2003, there are significant public health and economic impacts in addition to air quality considerations that are associated with wide-scale grid failure. However, the use ofemergency engines to generate electricity to satisfy on-peak demand has significant public health impacts on high electric demand days (HEDDs) . These impacts include high emission rates ofozone precursors and air toxics, which greatly exacerbate already impaired air qualityon these HEDDs. As a result, OTC believes that EPA should discourage the operation ofemergency generatorsto satisfy on-peak demand unless emergency generation is necessary to address atrue power emergency. 2

### With respect to the need for emergency generation in true emergencies (blackouts and brownouts, including periods offive percentvoltage reduction), OTC believes that restricting the hours ofoperation is not necessary ifthe definition of "emergency" is specific enough and stringent enough to preclude the operation ofemergency engines in price-response mode. As such, OTC recommends EPA: • Develop a definition of "emergency" that provides precise conditions, including periods offive percentvoltage reduction, as exemplified by ISO-NE in the implementation oftheir current " real-time emergency generation resource" definition in Tariff No. 3 dated December 22,2004; • To the extent possible, set environmental standards that will incentivize the dispatch ofnongenerating demand response resources priorto the dispatch of polluting demand response resources; and • To the extent that emergency engines are called upon to meet on-peak demand, EPA's rules should ensure that control technology complements the intended use ofthese engines for quick start capacity and require that emission controls are operating atfull effectiveness as soon as possible, but not laterthan 10 minutes following engine start up orthe amount oftime recommended by the engine manufacturer ifadd-on controls like selective catalytic reduction (SCR) are applied. In addition to these specific recommendations on the proposed rule, OTC also requests that EPA consider with the Federal Energy Regulatory Commission (FERC) the potential energy and environmental benefits achievable from the national adoption by all ofthe ISOs ofa definition ofemergency consistent with the first ofthe above three bullets. OTC respectfully submits these comments for EPA's consideration in developing afinal rule for new source performance standards on stationary combustion engines. We welcome further discussion on this issue and offer our assistance to EPA as work proceeds on development ofafinal rule. Please contact me with any questions at (202) 508-3840. Sincerely, Anna Garcia Executive Director



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