AT&T Services, Inc. 

4430 Rosewood Drive 

Pleasanton, CA 94588 

T: 415-454-9282 

F: 415-454-9099 

www.att.com 

May 18, 2011 

Melanie King 

Energy Strategies Group 

Sector Policies and Programs Division 

Office of Air Quality Planning and Standards 

United States Environmental Protection Agency 

Mail code D243-01 

RTP, NC 27771 

Re: New Source Performance Standards, Subpart IIII; Low Sulfur Diesel Fuel 

Requirements 

Dear Ms. King: 

On behalf of various associated legal entities, AT&T Services, Inc. (AT&T) 

hereby requests that the Environmental Protection Agency (EPA) amend the New Source 

Performance Standards (NSPS) for Stationary Compression Ignition Internal Combustion 

Engines (CI ICE), 40 C.F.R. Part 60, Subpart IIII, to allow facilities to deplete their 

existing inventory of low-sulfur diesel (LSD) without having to obtain a “waiver” from 

EPA every six months. This result could be accomplished simply by amending 40 C.F.R. 

§ 60.4207(b) to mandate the “purchase” of ultra low-sulfur diesel (ULSD) instead of the 

“use” of such fuel. Such an amendment would: (1) ensure the orderly transition from 

LSD to ULSD without compromising any of the environmental benefits of the rule; (2) 

allow facilities to deplete their existing LSD inventories and avoid the economic hardship 

of having to drain and repurchase fuel inventories; (3) eliminate the regulatory (and cost) 

burdens of EPA’s waiver program; and (4) comport with President Obama’s recent 

Executive Order, Improving Regulation and Regulatory Review, that calls for the 

innovation of needlessly burdensome requirements. 

Background 

NSPS Subpart IIII regulates CI ICE emissions and, among other things, requires, 

as of October 1, 2010, that all affected engines use diesel fuel that meets a sulfur content 

limit of 15 parts per million (ppm) or less (ULSD). 40 C.F.R. § 60.4207(b). Subpart IIII, 

however, also includes a provision under which facilities can petition the Administrator 

for permission to continue using “noncompliant” fuel beyond the specified compliance 

date if warranted. Id. § 60.4207(c). These waivers are valid for six months, and if 

additional time is needed, the facility must submit a new petition. Subpart IIII does not 

limit the number of waivers a facility may seek. Id. 
To date, AT&T has sought and obtained two waivers. EPA issued the first waiver 

in September 2010 and the second on March 10, 2011. The current waiver authorizes 

AT&T to use “non-compliant” fuel until October 1, 2011. For the reasons discussed 

below, unless Subpart IIII is amended, AT&T is likely to seek additional waivers every 

six months for many years to come. This is an inefficient and uncertain process. 

AT&T’s only other option would be to drain its existing fuel inventory and replace it 

with ULSD. This option would cost AT&T as much as $10 million, yet result in only 

trivial, if any, environmental benefit. In fact, mandating the draining of tanks could 

actually result in environmental harm by increasing the potential for spills and emissions 

during pumping and transportation. 

A better solution is needed and easily implemented through the amendment 

discussed herein.

AT&T’s CI ICE Fleet and Fuel Inventory 

AT&T owns and operates approximately 1,300 CI ICE− the overwhelming 

majority of which are emergency backup engines. These engines, which are located at 

more than 1,200 facilities across the United States, provide critical backup power to 

wireless and wireline telecommunications systems in the event of commercial power loss. 

Of AT&T’s more than 12,500 storage tanks, approximately 1,200 are dedicated to CI 

ICE. The current fuel inventory of these tanks is approximately 1.8 million gallons. 

Since at least October, and at many sites earlier, AT&T has purchased only ULSD for its 

CI ICE fleet. The ULSD has been added directly to previously existing LSD inventory in 

the same tanks. 

As AT&T’s CI ICE are only used in emergency situations, and are rarely run for 

long periods when they are used, the fuel inventory supplying these engines depletes 

slowly. Indeed, many of our tanks are re-supplied with fuel only once per year, and in 

some cases even less frequently than that. Additionally, AT&T has an emergency 

preparedness policy of not allowing the fuel levels in its storage tanks to dip below 50 

percent of capacity or to exceed 90 percent of capacity. The minimum level ensures that 

there is always an adequate fuel supply on-hand for each emergency backup engine in the 

event of a prolonged electrical grid outage, whereas the upper threshold is a safety 

measure to allow for fuel expansion. Therefore, the maximum amount of fuel that can be 

introduced into a tank at any one time during refueling is 40 percent of tank capacity. 

Impacts of the Existing Subpart IIII

Given our engines’ use patterns and our internal fuel policies (which are in part 

needed to satisfy our Federal Communication Commission requirements), if Subpart IIII 

is not amended, AT&T would have little choice but to seek waivers repeatedly over the 

next 11 or so years since we estimate it will take at least this long for the sulfur content of 

our fuel inventory to meet a limit of 15 ppm through mixing and be deemed “compliant.” 

According to our internal calculations, even if we depleted our fuel inventory at our 

maximum rate of 40 percent per year and replaced it each time with ULSD, it would still 

take 12 years before the fuel in our tanks would achieve a sulfur concentration of 15 ppm. 

Obviously, it will take even longer if we do not fill to our maximum levels each year. 
This repeated petition process would be burdensome for EPA and for AT&T. In 

addition to the financial burden, the petition process would not afford us with the 

regulatory certainty and control over our future compliance status. Given the timing of 

the process and the short duration of waivers, were EPA to deny a future petition, it is 

unlikely that we could timely come into compliance with Subpart IIII since it would take 

many months to drain our tanks. 

Even more burdensome than the petition process, however, would be the only 

other option that AT&T has to guarantee compliance with Subpart IIII: draining and then 

refilling the more than 1,200 tanks servicing its CI ICE fleet. Whether AT&T did this 

prospectively or in response to a waiver denial by EPA, it would be extremely costly. 

For example, assuming a price of $4 per gallon,1

 replacing our existing fuel inventory of 

1.8 million gallons would cost approximately $7.2 million (although this cost might be 

partially offset by the recovery of some of the existing fuel value). The cost of draining 

each tank and removing the fuel is likely to cost an additional $2.7 million.2

 Thus, 

replacing our fuel inventory to comply with Subpart IIII would cost AT&T in the range 

of approximately $6 million to $10 million. 

From an environmental protection standpoint, forcing AT&T and other similarly 

situated sources to replace their fuel inventory would not result in any net benefit. In 

fact, the opposite may occur. Any non-complaint fuel drained from our tanks would 

likely be resold and combusted by other nearby sources. Thus, there would be no 

benefits to local air quality. Any noncompliant fuel that is not locally used presumably 

would be disposed of or sold for further reprocessing. The first of these options would 

result in increased waste, whereas the second would involve further energy use – both 

undesirable consequences. Finally, the process of emptying tanks and transporting fuel 

could also lead to spills and increased emissions from fuel transportation. 

The above estimates are just AT&T’s. We have every reason to believe that other 

companies within the telecommunications sector are in similar positions and also need 

relief. 

AT&T’s Recommended Solution 

The problems associated Subpart IIII’s fuel requirement can be addressed easily 

by changing the fuel restrictions from a “use” requirement to a “purchase” requirement. 

EPA could accomplish this by revising the language of 40 C.F.R. § 60.4207(b) from “. . . 

must use diesel fuel that meets the requirements of 40 CFR 80.510(b)” to “. . . must 

purchase diesel fuel that meets the requirements of 40 CFR 80.510(b).” Alternatively, 

EPA could make the new purchase requirement applicable only to CI ICE used for 

emergency purposes. 

Both of these options would provide significant relief to the owner/operators of 

emergency backup engines, including but not limited to the following: 

 

1

 According to the Department of Energy, Energy Information Administration website, 

the cost of on-highway diesel is now at least $4 per gallon in every region of the country: 

http://www.eia.gov/oog/info/gdu/gasdiesel.asp 

2

 We estimate the cost to drain tanks to be between $0.30 and $1.5 dollars per gallon. 
 Both EPA and owner/operators of emergency backup CI engines would be 

relieved of the burdens of the waiver petition and approval process currently in 

place under Subpart IIII; 

 Owner/operators of emergency backup CI engines with long-term fuel inventories 

would have more certainty in their fuel-supply purchasing and compliance 

strategies; 

 Owner/operators of emergency backup CI engines would not be required to 

needlessly spend millions of dollars replacing their existing fuel inventories; 

 Owner/operators of emergency backup CI engines that serve a critical 

infrastructure role, such as AT&T, would be allowed to maintain their current 

policies regarding fuel levels; and 

 The amendment would eliminate an inefficient and unnecessary regulatory 

requirement, consistent with the President’s Executive Order 13563. 

For the reasons articulated in this letter, AT&T respectfully urges EPA to amend 

Subpart IIII accordingly. 

* * * 

AT&T thanks EPA for its consideration of this matter. If you have any questions or 

would like to discuss this issue further, please contact me at 415-454-9282or 

mb8242@att.com. 

Sincerely, 

AT&T Services, Inc 

Michele Blazek 

Director, Environment, Health & Safety 

cc: Chet Thompson 

Crowell & Moring LLC