September 8, 2010 

Air and Radiation Docket and Information Center 

U.S. Environmental Protection Agency 

Mail Code: 6102T 

1200 Pennsylvania Avenue, NW 

Washington, DC 20460 

RE: Docket ID No. EPA-HQ-OAR-2010-0295 

Standards of Performance for Stationary Compression Ignition and Spark Ignition Internal 

Combustion Engines; Proposed Rule 

Response to DNREC Comment Letter dated August 5, 2010 

Dear Madam/Sir: 

CPower, Inc., EnergyConnect, Inc., EnerNOC, Inc., and Innoventive Power, LLC (collectively the 

“Companies”) are providing these comments in response to the proposed revisions to the standards 

of performance for new stationary compression ignition internal combustion engines under section 

111(b) of the Clean Air Act that were proposed by the United States Environmental Protection 

Agency (“EPA”) in the June 8, 2010 Federal Register. Specifically, this letter addresses the 

comment letter to this docket from Ali Mirzakhalili, Director of the Division of Air Quality at the 

Delaware Department of Natural Resources & Environmental Control (“DNREC”) dated August 5, 

2010. 

The Companies appreciate Delaware’s concern regarding this issue but firmly believe that their 

concerns are misguided. Specifically, our review of the record and conversations with DNREC staff 

shows that: 

• DNREC Confuses Emergency Demand Response (“DR”) with Economic DR; 

• DNREC Confuses Reserve Margin with Emergency Conditions; 

• DNREC Grossly Overestimates Emissions from Emergency DR; 

• DNREC Misstates the Synapse Study; and 

• DNREC’s Argument that Air Emissions Decrease During a Blackout Is Not a Reason to 

Preclude Emergency Demand Response 

DNREC Confuses Emergency DR with Economic DR 

Emergency DR programs are called in response to grid emergencies only, while economic DR 

programs are dispatched by utilities or Independent System Operators (“ISOs”) in response to 

high prices or are self-selected by end users in response to prices. These are very different 

types of programs and EPA should treat them differently. DNREC, in their comment letter, 

demonstrates that they still do not make a distinction between emergency DR (DR called as the last 
line of defense to avoid blackouts either at the start of voltage reductions or just before voltage 

reductions) and economic DR (e.g., peak shaving and other forms of non-emergency operation). 

This is a critical distinction; as discussed throughout this docket, emergency DR is operated under 

very rigid North American Electric Reliability Council (“NERC”) regulations by the grid operator 

only in the case of grid emergencies. 

The following statements made by DNREC in their comment letter are referring to economic DR not 

emergency DR: 

Some organizations are now employing emergency generators contrary to their design and 

purpose. These organizations have created programs that “aggregate” many small 

emergency generators so that they are able to participate as a group in wholesale demand 

response programs. ... In fact, the ability for these units to participate in demand response 

markets can actually move the economic dispatch curve such that these types of aggregated 

units could be available at a lower cost on the dispatch curve displacing somewhat higher 

cost, but more efficient and clean generation. (see page 2, second paragraph) 

For example, in Delaware a local electric provider currently operates a demand response 

program consisting of about 225 participants who have uncontrolled generators (almost all 

of which are on poultry farms) that were originally installed for emergency use and are all 

below 300 kW. These individuals have contracted with the electric provider to achieve lower 

electric rates in exchange for operating the emergency generators as a block during peak 

demand scenarios. ... Delaware believes that the change in the definition of emergency 

stationary ICE explicitly provides for this type of use. (see page 3 first full paragraph) 

What Delaware describes above is NOT emergency DR. Indeed, the definition of emergency 

stationary ICE in both National Emissions Standards for Hazardous Air Pollutants (“NESHAP”) for 

Reciprocating Internal Combustion Engines (“RICE”) ZZZZ and the proposed New Source 

Performance Standards (“NSPS”) IIII specifically excludes peak shaving and other such economic 

use of emergency generators from the definition of emergency stationary ICE. (see 40 CFR 

63.6640(f)(4) of the NESHAP for RICE; 40 CFR 63.6640(f)(1)(iii) of the NESHAP for Spark 

Ignition RICE, and proposed changes to 40 CFR 60.4211(f)(4) of the NSPS) If engines are used for 

such purposes, they must comply with the non-emergency provisions in the NESHAP and NSPS. 

DNREC’s own regulations actually allow some generators to operate as non-emergency generators 

in an economic DR program without meeting rigid emission limits1

. If DNREC is so concerned 

about non-economic DR programs, which its comments indicate, they should close this loophole in 

their own regulations. 

 

1 See Title 7 Natural Resources and Environmental Control of Delaware Regulations Section 1144 Control of 

Stationary Generator Emissions, Subsection 3.2.1.2
DNREC Confuses Reserve Margin with Emergency Conditions

DNREC states that they do “not believe these ICE are able to play a significant role2

” in helping to 

forestall serious system emergencies. They state that “[t]he aggregated smaller local ICEs, not 

meeting air emissions standards, would not be the difference between reliable service and 

blackout.3

” DNREC believes there is a buffer in PJM “over and above the required reserve 

margin.4” This is not true. There is no buffer when the electric need is above the required reserve 

margin, and the grid operator only calls emergency DR when reserves have been used – or are about 

to be used to satisfy system load. 

ISOs, including PJM, must follow NERC standards when dispatching emergency DR for capacity 

and energy emergencies. Specifically, System Operators call emergency DR programs at EEA 

Alert 2 NERC standards when there is the real potential for blackouts due to insufficient energy 

supply. When facing an energy shortfall a System Operator must declare EEA Alert 2 and measures 

can include public appeals, voltage reductions, interruption of non-firm load, emergency DR, and 

utility-side load conservation5

. The final step after EEA Alert 2 is EEA Alert 3 which entails the 

involuntary shedding of firm customer loads. These are often referred to as “rolling blackouts.” 

Thus, when an EEA Alert 2 is called, there is no reserve margin available. Regarding DNREC’s 

contention that emergency DR cannot make a difference, the Companies believe PJM is in a much 

better position to determine that and they have demonstrated their belief in the efficacy of 

emergency DR by calling on it four times this summer. 

DNREC Grossly Overestimates Emissions from Emergency DR

Emergency DR, as practiced in PJM, allows customers to meet their DR commitments either 

by curtailing their usage (shutting off lights, turning off equipment) or running their backup 

generation. DNREC estimates that the oxides of nitrogen (“NOx”) emissions from the emergency 

DR event in PJM on July 7, 2010 range from 218 to 272 tons. DNREC erroneously assumes that all 

emergency DR on July 7 came from emergency engines, which is grossly inaccurate More than 

75% of emergency DR on July 7 came from curtailment (e.g., turning down lights, air conditioning, 

manufacturing processes, etc.) and, from experience (the Companies represent the largest DR 

providers in PJM), less than 25% came from backup generators. Assuming 25% generation6

, the 

NOx emissions from the July 7 emergency DR event are estimated to be less than 46 tons over a 

wide geographic area. Most likely less than 25% of emergency DR came from emergency engines 

since Delaware (except some coops), New Jersey, Philadelphia County, and the District of Columbia 

- all geographic areas that participated in the emergency DR event - do not currently allow the use of 

emergency engines in emergency DR unless they meet rigid emission limits. 

DNREC Misstates the Synapse Study

 

2

 See Page 2, Third Paragraph of DNREC Comment Letter dated August 5, 2010.

3

 Ibid

4

 See Page 3, Second Line of DNREC Comment Letter dated August 5, 2010

5

 Following EEA Alert 2 declaration, the System Operator must report back to NERC on causes, measures taken to 

address the shortfall, and post-event mitigation.

6

 Assumes 65% non tier rated, 25% tier 1 rated, and 10% tier 2 rated.
A report prepared by Synapse Energy Economics, Inc. (“Synapse Study”) for EPA assessed 

the impacts of DR and energy efficiency programs in New England using an electric system 

dispatch model and concluded that emergency DR actually improves air quality.7

 DNREC 

states that “[h]owever, the report assumed that the non-emergency generators were gas-fired.8

” 

First, the study shows that even assuming all DR is from diesel fired engines, there is a net benefit to 

air quality. This net benefit increases if one assumes some or all of the engines are gas-fired 

engines. Second, for non-emergency generation (e.g., the power that is replaced by emergency DR), 

emission factors for eight different plant types were used: gas-fired combined cycle, oil-fired 

combined cycle, gas-fired combustion turbine, oil-fired combustion turbine, and coal-, gas-, oil-, and 

wood-fired steam plants. 

The Synapse Study concluded that “when the DR resource is used to meet reserve requirements, the 

result is more efficient unit commitment, reduced operation of oil- and gas-fired steam units and 

increased operation of combined-cycle units in New England.9

” And finally, the report noted that 

“New England has a small amount of quick-start capacity relative to the regional peak load 

compared to most other control areas. Many analysts have noted that this requires large power 

plants to operate more than they would otherwise have to in order to maintain sufficient operating 

reserves – capacity that can be provided quickly in response to unplanned losses of capacity. A key 

goal of this work for EPA was to verify that large units were indeed being operated more than 

necessary in New England to meet reserve requirements, to gauge the probable emission impacts of 

this dynamic, and to estimate potential emission reductions that additional DR could provide if it 

were used to meet operating reserve requirements.10” The report concluded that when DR is used 

for reserves there are significant decreases of criteria pollutant emissions, even when it is assumed 

that the DR is all diesel (NOx decreased 23 tons, sulfur dioxide decreased 216 tons, carbon dioxide 

decreased 31,400 tons, particulate matter 2.5 microns or less decreased 12.5 tons, and particulate 

matter decreased 21.2 tons.11

DNREC Argument that Emissions Decrease during a Blackout is not a Reason to Preclude 

Emergency Demand Response

While emissions due to power generation decreased during the 2003 blackout, it’s not realistic 

to presume that the eastern US will sacrifice electricity for reduced emissions; as such, analysis 

of emission impacts shouldn’t assume this as an alternative. Grid failure affects public health 

and safety – people die during blackouts. Blackouts can also cause severe environmental damage; 

during the August 2003 eastern blackout, many millions of gallons of untreated sewage from New 

York City were discharged into rivers as a result of the power failure. Lastly, all generators run 

during blackouts, regardless of condition, age, or permitted status. 

 

7 See Modeling Demand Response and Air Emissions in New England by Geoff Keith, Bruce Biewald, David White, and 

Mike Drunsic, revised September 4, 2003.

8

 See Page 10 of NREC comment letter dated August 5, 2010.

9

 Id Page 2

10 Id Page 4

11 Id Page 13 
The August 2003 was a wholesale blackout caused by an extreme event. Even without the 

wholesale failure of the grid such as occurred in 2003, a grid operator can be forced to call a NERC 

EEA Alert 3, which would be accompanied with rolling blackouts and all power generation 

operating in overload conditions. Many of the risks discussed above would also occur during rolling 

blackouts. 

DNREC claims that during black-outs, emissions actually go down, and cites air quality data from 

the August 2003 blackout that affected wide swaths of the country from the Midwest to the border of 

New England. Presumably they point this out to argue that therefore emergency DR is a threat to the 

environment because it forestalls such black-outs. Such an argument makes no sense. If you shut 

down all of the central station power plants from Minnesota to Connecticut of course you are going 

to reduce air emissions. But, you also get threats to personal health and safety, billions of dollars of 

damage and other environmental problems such as potential loss of fresh water supplies and release 

of untreated sewage into water ways. Blackouts are not a serious way to reduce air pollution. 

Thank you for allowing us to provide comments. 

Respectfully submitted, 

Rick Counihan, EnerNOC, on behalf of 

CPower, Inc. 

EnergyConnect, Inc. 

EnerNOC, Inc. 

Innoventive Power, LLC