Bryan W. Shaw, Ph.D., Chairman 

Carlos Rubinstein, Commissioner 

Toby Baker, Commissioner 

Zak Covar, Executive Director 

RECEIVED- 6POL 

AIR PLANNING SEC. 

13 HAY 17 PH 5: 07 

TEXAS COMMISSION ON ENVIRONMENrAL QUALI1Y 

Protecting Texas by Reducing and Preventing Pollution 

May 14, 2013 

Ron Curry 

Regional Administrator 

U.S. Environmental Protection Agency- Region 6 

1445 Ross Avenue 

Dallas, Texas 75202-2733 

Dear Mr. Curry: 

Docket No. 2012-o8g6-RUL 

Rule Project No. 2012-025-117-AI 

On April 10, 2013, the Texas Commission on Environmental Quality (Commission) adopted revisions 

to the State Implementation Plan (SIP). 

The Commission adopted amendments to §117.10 in 30 TAC Chapter 117, Control of Air Pollution 

from Nitrogen Compounds; and §101.379 in 30 TAC Chapter 101, General Air Quality Rules; and 

corresponding revisions to the SIP. The adopted rulemaking will amend §101.379 and the definition of 

emergency situation in §117.10 to reference the version of the Electric Reliability Council of Texas, Inc. 

(ERCOT) nodal protocols effective June 1, 2012. The adopted rulemaking will also amend the 

definition of emergency situation in §117.10 to reflect changes made by ERCOT to promote reliability 

during energy emergencies by allowing the operation of generators for purpose of selling power back 

to the electric grid under limited circumstances. 

Enclosed are the proposed revisions to the SIP, a public hearing certification, a complete record of the 

public hearing[s], and the accompanying order. I look forward to your expeditious approval of these 

SIP revisions. 

Sincerely, 

~\~.r 

-;~. ~ha: Ph.D. .x 

Chairman 

BWS/al 

Enclosures 

cc: The Honorable Rick Perry, Governor of Texas 

Ms. Kelly Kennedy, Office of Budget, Planning and Policy, Office of the Governor 

Mr. Zak Covar, Executive Director, Texas Commission on Environmental Quality 

P.O. Box 13087 • Austin, Texas 78711-3087 • 512-239-1000 • tceq.texas.gov 

How is our customer service? tceq.texas.gov/custornersurvey 
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY 

THE STATE OF TEXAS 

COUNTY OF TRAVIS 

Docket No. 2012-0896-RUL 

Rule Project No. 2012-025-117-AI 

This is to certify that the attached electronic file is included and that the electronic file is a 

true and correct copy of documents for a revision to the Texas State Implementation Plan, 

adopted on ApriliO, 2013, pursuant to 40 Code of Federal Regulations§ 51.104. I am the 

records administrator for the Air Quality Division of the Texas Commission on 

Environmental Quality (Commission). 

¥~~ Air Quality Division 

Texas Commission on Environmental Quality 
Texas Commission on Environmental Quality 

Public Hearing 

November 28, 2012 

Concerning Revisions to 30 T AC Chapters 101 and 117 

and corresponding revisions to the State 

Implementation Plan 

Rule Project No. 2012-025-117 -AI 
INTRODUCTION 

The Texas Commission on Environmental Quality (commission) scheduled a public hearing in 

Austin on November 28, 2012 to receive testimony regarding 30 TAC Chapter 101, General Air 

Quality Rules, and Chapter 117, Control of Air Pollution from Nitrogen Compounds and 

corresponding revisions to the state implementation plan. 

The rulemaking revises Chapter 101 and Chapter 117 to update references to Electric Reliability 

Council of Texas, Incorporated (ERCOT) protocols and reflect the changes to ERGOT's new 

Emergency Response Service program. The rulemaking revises §1 01.379 and the definition of 

emergency situation in §117.1 0 to reference the most recent version of the ERCOT protocols. 

The rulemaking revises the definition of emergency situation in §117.1 0 to reflect changes made 

by ERCOT to promote reliability during energy emergencies by allowing the operation of 

generators for purposes of selling power to the electric grid under limited circumstances. 

The comment period closed on December 5, 2012. All testimony and comments have been 

reviewed and seriously considered. This hearing record contains a complete record of the 

public hearing and is divided into the following four sections: 

o Public Notification and Proposal 

o Written and Oral Testimony 

o Evaluation of Testimony 

o Staff Recommendations/Order 
Additional copies of this hearing record are maintained in the TCEQ central office at 12100 Park 

35 Circle, Austin, Texas 78753. For further information, please contact Lindley Anderson at 

(512) 239-0003. 

• 
NOTICE & PROPOSAL 
PUBLIC NOTIFICATION 

Notification to the public of the proposed revisions was conducted by the following procedures: 

1. Publication of notice of public hearings in the following newspapers on the date listed: 

Austin American-Statesman: October 19, 2012 

Fort Worth Star-Telegram: October 19, 2012 

Houston Chronicle: October 19, 2012 

2. Publication of the proposed rules in the November 2, 2012 issue of the Texas Register(37 

TexReg 8718, 8722). 

3. Publication of the Notice of Public Hearing in the November 2, 2012 issue of the Texas Register 

(37 TexReg 8880). 

4. Correspondence forwarding the notice of public hearings to the following officials and agencies: 

Speaker of the House 

Lieutenant Governor 

Alamo Area Council of Governments 

Capital Area Planning Council 

City of Austin, Mayor's Office 

City of Dallas, Department of Environmental Quality 

City of Dallas, Department of Aviation 

City of El Paso, Environmental Services 

City of Fort Worth, Environmental Management Department 

City of Houston, Department of Health and Human Services 

East Texas Council of Governments 
El Paso Metropolitan Planning Organization 

Federal Highway Administration 

Galveston County Health District 

Harris County Public Health and Environmental Services 

Houston-Galveston Area Council 

North Central Texas Council of Governments 

South East Texas Regional Planning Commission 

Texas Department of Transportation 

Travis County Judge 

Victoria Metropolitan Planning Organization 

Arkansas Department of Pollution Control and Ecology 

Louisiana Department of Environmental Quality 

New Mexico Environmental Department 

Oklahoma Department of Environmental Quality 

United States Environmental Protection Agency 
Example of Newspaper Classified Ad 

Austin American-Statesman, October 19, 2012 

NOTICE OF PUBLIC HEARING ON . . . PROPOSED REVISIONS .. 

T030TACCHAP!EIIS fo1 and 117and. TO THE STATE IMPLEMENTATION PIAN 

Thi! Texas CorrimlisiM oii £nvirorimen- tar·ouality (comrills;lon) will conduct a public .hearing to receive testimony re- garding proposed revisions to 30 TAC Cliapter·.t01, GeneraJ'Atr Q.uality Rules and Chapter '1'17; Ca[ltrcl of Air Pollu- tlolj'From Nitrogen Co'rrlpounds, and 

cor.respondlng rev.islons to the· state lm~r~m</ntation plan.(SIP) undenhe r<l:- qwrel)1ents of 1 exas H~alth a~d Safety 

<ode;·§3B2.0l7; Texas Government Code, Cha.p ter 200. T, Subchapter B; .and 40 Code of Federal Regulatloh> §51.102, an~ the United States Environmental Protectfon Agency whGernlng SIPs. · · The proposea'):utemaking w:oul~ revise Chapters:ro.1 and 117-to tipdat.e ref~r­ eAce!> to Electric Rella blllty Council of 

Texas,.lncorporated (ERCOT) protocol~ 

and reflect changes to ERCOT's new Emergency Resporue Service program. The proposed rulemakin~ would revise §1 01.379 and the definotion of emer- gency situation In §ll7.10 to reference ·the mosHecent version of tlt'e ERCQT 

eJ~~fJ~ t';or~:JI~~~~e~:fi~"i~~~~~l emergency situation in §117'.10 tore- flect changes made b.y ERCOT to pro- mote rellatillity during energy emergen- cies by allowing the 0 peration of er.atq'ls.fl;>r purposes of seJIIng power .. .ectrjc.grld un,der limited meum-

·.· k\isian-;_;;ljl h~Yd a publk .hearJog on this propo'salln Austin on No- vembe'r 28, 2012 at 2:00 p.m. at tl)e 

Te;xa; Commission on Environmental Qoality, Building E; Roam io1·s, at the ··comm,.sion's central offici!Jcicated at ' 12100 Park 35 Circle. The. hearing fs structured for the recelpfof oraf,or wift- 'te,; comments by lnt'ete's\iid persorS: In,· . dlvlduaJs. may· presen~ .oral' statements '•;:~hen.~~!l'e<iuponin,of<;ler Of reglstr.a-· · ·tion,dP,en.d)sCilssTo~ wm·not qe permt- 'ted durt'ng·.the· freanng; howev~ri com- mission· staff members WiJfbe aV91iable I 

to discuS< the proposal30 minutes prior tO the hearing. · . Persons Who ha11fi sj:Jedal cbmmunica· tlo'n or other accommodation. n~eds who ar'e planning to attend the hearing should contact Sandy Wong, Offlc& of Legal Services at (512) 239-1802. Re- q"ests should be made as far in advance as possible. 

Written coinmen'ts may be submitted to Bnice McAnally, MC 205, Office of Legal Services, T~xas Commission on Environ- mental Quality, P.O. Box 13087, Austin, 

1exas·78711-3087, ar faxed to (512) 239-4808. Electronic.comnients may be s · u·. b. ni · i, ·t , t, · e .d. a t : httptlwww5.tr.eq.texas.gov/rules/ecomments/. ~ile size restrktions may apply to comments being·submitted via the eComments Sy~tem. All comments should reference Rule Project Num bet 20H-02S,·t 17-AI. The comment period.· · closes Decemoe.r 5, 2012. Copies <if the prt;~posed rti!erilaklng c~n-.be otitafhed f,om·.the .. co·mml55lb n•>·webslte· at 

httpJ/votWw.tCetf.texas.gdv/navfriJlestprop 

ose~adojit.html. For further information, 

please contact Ra~ Schubert, Air Quality 

Plan"ing Section, (512) 239-5615. . . 
TIFIER: RN102063757; LOCATI N: San Antonio, Bexar County; 

TYPE OF FACILITY: convenience store with retail sales of gasoline; 

RULE VIOLATED: 30 TAC §334 49(a)(1) and TWC, §26.3475(d), 

by failing to provide proper corrosi n protection for the underground 

storage tank system; PENALTY: $ ,000; ENFORCEMENT COORDINATOR: Steve Villatoro, (512) 39-4930; REGIONAL OFFICE: 

14250 Judson Road, San Antonio, xas 78233-4480, (21 0) 490-3096. 

(29) COMPANY: Yedneckache Worke dba Longview TD 

Mart; DOCKET NUMBER: 2 12-0920-PST-E; IDENTIFIER: 

RN102425816; LOCATION: Lon view, Gregg County; TYPE OF 

FACILITY: convenience store with etail sales of gasoline; RULE VIOLATED: 30 TAC §334.50(b)(l)( ) and (2) and TWC, §26.3475(a) 

and (c)(1), by failing to monitor the nderground storage tanks (USTs) 

for releases at a frequency of at least once every month (not to 

exceed 35 days between each mon toring) and by failing to provide 

release detection for the piping sociated with the USTs; and 30 

TAC §334.10(b), by failing to m intain UST records and making 

them immediately available for in pection upon request by agency 

personnel; PENALTY: $3,629; E ORCEMENT COORDINATOR: 

Judy Kluge, (817) 588-5825; RE IONAL OFFICE: 2916 Teague 

Drive, Tyler, Texas 75701-3734, (9 3) 535-5100. 

TRD-20 1205496 

Kathleen C. Decker 

Director, Litigation Division 

Texas Commission on Environment I Quality 

Filed: October 23, 2012 

• • • 

Notice of Public Hearing on a P oposed Revision to the State 

Implementation Plan 

The Texas Commission on Enviro ental Quality (commission) will 

conduct a public hearing to receive estimony regarding the proposed 

Houston-Galveston-Brazoria (HGB 1997 Eight-Hour Ozone Standard 

Nonattainment Area Motor Vehicle Emissions Budgets (MVEB) Update State Implementation Plan (SIP Revision, under the requirements 

of Texas Health and Safety Code, §3 2.012 and §382.0 13; and 40 Code 

of Federal Regulations §51.102 of the United States Environmental 

Protection Agency (EPA) regulatio s concerning SIPs. 

The proposed HGB SIP revision ould update the HGB attainment 

demonstration and reasonable furt er progress SIP revisions for the 

1997 eight-hour ozone standard tha were adopted by the commission 

on March 10, 2010, by revising on road mobile source emissions inventories for nitrogen oxides (NOx and volatile organic compounds 

(VOC) based on the EPA's latest m bile source emissions estimation 

model, Motor Vehicle Emission Si ulator (MOVES), which was released on March 2, 2010. The 2008 2011, 2014, 2017, and 2018 NO, 

and VOC MVEBs would also be pdated using the MOVES-based 

emissions inventories. The propose revision also includes a review of 

emissions inventory data, photoche ical modeling, and the quantitative and qualitative corroborative a alyses used as weight of evidence 

supporting the March 2010 HGB a ainment demonstration SIP revision. The proposed SIP revision uld also address the outstanding 

contingency obligations for the HG area and Federal Clean Air Act 

requirements for transportation con ol measures in severe nonattainment areas. 

A public hearing on this proposal wi I be held in Houston on November 

19, 2012, at 2:00p.m. in Conferen e Room B of the Houston-Galveston Area Council at 3555 Timmon Lane. The hearing will be structured for the receipt of oral or writte comments by interested persons. 

Registration will begin 30 minutes prior to the hearing. Individuals 

may present oral statements when c lied upon in order of registration. 

37 TexReg 8880 November 2, 2012 Texas Register 

~here will be no open discussion d ring the hearing; however, commissiOn staff members will be availab e to discuss the proposal30 minutes 

before the hearing. 

Persons planning to attend the he ring who have special communication or other accommodation nee s should contact Lola Brown Air 

Quality Division, at (512) 239-03 8. Requests should be made~ far 

in advance as possible. 

Comments may be submitted to Lola Brown, MC 206, State Implementation Plan Team, Offic of Air, Texas Commission on 

Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087 

or faxed to (512) 239-6188. Elec ronic comments may be submitted 

at http://www5.tceq.texas.gov/rule lecomments. File size restrictions 

may apply to comments being s bmitted electronically. All comments should reference the "H B MVEB Update SIP Revision" 

and Project Number 2012-002-SI -NR. The comment period closes 

November 26, 2012. Copies of e proposed SIP revision and associated appendices can be obtai d from the commission's website 

at http://www.tceq.texas.gov/airqu litylsiplhgblhgb-latest-ozone. For 

additional information regarding he proposed SIP revision, please 

contact Lola Brown, Air Quality "vision, at (512) 239-0348. 

TRD-201205495 

Robert Martinez 

Director, Environmental Law Divisi 

Texas Commission on Environment I Quality 

Filed: October 23, 2012 

• • 

Notice of Public Hearing on Proposed Revisions to 30 TAC 

Chapters 101 and 117 and to the State Implementation Plan 

The Texas Commission on Environmental Quality (commission) will 

c?nduct a public hearing to receive testimony regarding proposed reviSions to 30 TAC Chapter 101, General Air Quality Rules, and Chapter 

117, Control of Air Pollution from Nitrogen Compounds, and correspon_ding revisions to the state implementation plan (SIP) under the 

reqmrements of Texas Health and Safety Code, §382.01 7; Texas Government Code, Chapter 2001, Subchapter B; and 40 Code of Federal 

Regulations § 51.1 02, and the United States Environmental Protection 

Agency concerning SIPs. 

The proposed rulemaking would revise Chapters 101 and 117 to update references to Electric Reliability Council of Texas, Incorporated 

(ERCOT) prot~cols and reflect changes to ERCOT's new Emergency 

Response Serv1ce program. The proposed rulemaking would revise 

§101.379 and the definition of emergency situation in §117.10 to reference the most recent version of the ERCOT protocols. The proposed 

rulemaking would also revise the definition of emergency situation in 

~117.10 to reflect changes made by ERCOT to promote reliability durmg energy e';llergencies by allowing the operation of generators for purposes of selling power to the electric grid under limited circumstances. 

The commission will hold a public hearing on this proposal in Austin 

on November 28,2012, at 2:00p.m., at the Texas Commission on Environmental Quality, Building E, Room 201 S, at the commission's central 

office located at 12100 Park 35 Circle. The hearing is structured for the 

receipt of oral or written comments by interested persons. Individuals 

may present oral statements when called upon in order of registration. 

Open ~is_cussion will not be permitted during the hearing; however, 

comm1ss1on staff members will be available to discuss the proposal 30 

minutes prior to the hearing. 

Persons who have special communication or other accommodation 

needs who are planning to attend the hearing should contact Sandy 
Wong, Office of Legal Services, at (512) 239-1802. Requests should 

be made as far in advance as possible. 

Written comments may be submitted to Bruce McAnally, MC 

205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087 or 

faxed to (512) 239-4808. Electronic comments may be submitted 

at: http://www5.tceq.texas.govlrules/ecommentsl. File size restrictions may apply to comments being submitted via the eComments 

system. All comments should reference Rule Project Number 

2012-025-117-AI. The comment period closes December 5, 2012. 

Copies of the proposed rulemaking can be obtained from the 

commission's website at http://www.tceq.texas.gov/navlrules/propose_adopt.html. For further information, please contact Ray 

Schubert, Air Quality Planning Section, (512) 239-6615. 

TRD-201205433 

Robert Martinez 

Director, Environmental Law Division 

Texas Commission on Environmental Quality 

Filed: October 19, 2012 

• • 

Notice of Public Hearing on Pr posed Revisions to 30 TAC 

Chapters 291 and 293 

The Texas Commission on Enviro ental Quality (commission) will 

conduct a public hearing to receive stimony regarding proposed revisions to 30 Texas Administrative Co e (TAC) Chapter 291, Utility Regulations, §§291.22, 291.102,291.1 , and 291.113, and 30 TAC Chapter293, Water Districts, §§293.11, 2 3.32, 293.41, 293.51, and293.81, 

under the requirements of Texas W ter Code, §5.103, and Texas Government Code, Chapter 2001, Subc apter B. 

The proposed rulemaking would im lement House Bill (HB) 679, HB 

1901, Senate Bill (SB) 18, SB 51 SB 573, SB 914, and SB 1234, 

82nd Legislature, 20 11. The propo ed amendments would: impact a 

district's ability to increase the allo ble change order amount; exempt 

bonds issued by a public utility a ency from executive director approval; alter eminent domain power of a municipal utility district outside its boundary; modifY the elect' n qualifications for a fresh water 

supply district director; exempt bo ds issued by certain multi-county 

districts from executive director a proval; limit the time for certain 

municipalities to consent to certific tes of public convenience and necessity (CCN) within the corporate I mits or extraterritorial jurisdiction 

(ETJ) of the municipality and set co ditions for granting the CCN without the consent; alter a city's abili to extend a CCN beyond its ETJ 

if a landowner elects to exclude pro erty; add a provision that a CCN 

applicant or CCN holder that has Ia d removed by landowner election 

is not required to provide service to the removed land for any reason; 

change the requirements for a releas from a CCN; specifY that having 

federal loans is not a bar to release; nd add requirements for notice of 

utility rate changes. 

The commission will hold a public h aring on this proposal in Austin on 

December4, 2012, at2:00 p.m., in B ildingE, Room201S, at the commission's central office located at 1 100 Park 35 Circle. The hearing 

is structured for the receipt of oral r written comments by interested 

persons. Individuals may present or I statements when called upon in 

order of registration. Open discussi n will not be permitted during the 

hearing; however, commission staf members will be available to discuss the proposal 30 minutes prior t the hearing. 

Persons who have special commu ication or other accommodation 

needs who are planning to attend e hearing should contact Sandy 

Wong, Office of Legal Services, at 512) 239-1802. Requests should 

be made as far in advance as possib e. 

Written comments may be sub itted to Michael Parrish, MC 205, 

Office of Legal Services, Te as Commission on Environmental Quality, P.O. Box 13087, ustin, Texas 78711-3087 or faxed 

to (512) 239-4808. Electroni comments may be submitted at: 

http://www5.tceq.texas.gov/rules comments/. File size restrictions may apply to comments eing submitted via the eComments 

system. All comments shoul reference Rule Project Number 

2011-055-293-0W. The com nt period closes December 10, 

2012. Copies of the proposed lemaking can be obtained from the 

commission's Web site at http l/www.tceq.texas.gov/navlruleslpropose_adopt.html. For further information, please contact Kent 

Steelman, Utilities and Districts ection, (512) 239-5143. 

TRD-201205442 

Robert Martinez 

Director, Environmental Law Divis n 

Texas Commission on Environme tal Quality 

Filed: October 19, 2012 

• • 

Notice of Water Quality Appli 

The following notices were issue on October 12,2012 through October 19, 2012. 

The following require the applica ts to publish notice in a newspaper. 

Public comments, requests for pu lie meetings, or requests for a contested case hearing may be submi ed to the Office of the Chief Clerk, 

Mail Code 105, P.O. Box 13087, ustin, Texas 78711-3087, WITHIN 

30 DAYS OF THE DATE OFNE SPAPER PUBLICATION OF THE 

NOTICE. 

INFORMATION SECTION 

STAGECOACH PROPERTIES C has applied for a renewal of 

Texas Pollutant Discharge Elimin tion System (TPDES) Permit No. 

WQ0010884001, which authorize the discharge of treated domestic 

wastewater at a daily average flo not to exceed 50,000 gallons per 

day. The facility is located at 40 South Stagecoach Road, Salado, 

200 feet west of Farm-to-Market ad 2268, 300 feet south of Salado 

Creek, and 400 feet southeast oft e crossing of Salado Creek by the 

Interstate Highway 35 east frontag road, in the community of Salado 

in Bell County, Texas. 

GEORGIA PACIFIC WOOD PR DUCTS SOUTH LLC which operates Camden Plywood Plant, a mber, chip, and plywood manufacturing plant, has applied for a ~or amendment to TPDES Permit 

No. WQ0001598000 to authorize: a) the disposal of kiln condensate, 

treated domestic wastewater, and s rmwater runoff at a daily average 

flow not to exceed 15,000 gallons p r day and at an application rate not 

to exceed 0.8 acre-feet per acre per ear within the proposed 24.7-acre 

and 26.1-acre tracts that are covere with pine trees, and (b) the construction of proposed Pond No. 9 or the storage of kiln condensate, 

treated domestic wastewater, and st rmwater runoff prior to irrigation. 

The existing permit authorizes the discharge of non-contact cooling 

water, boiler blowdown, boiler fee pre-treatment water, treated domestic wastewater (previously mon ored) wet deck runoff, fire deluge 

water, boiler scrubber water, log fl e water, vehicle wash water and 

storm water runoff on an intermitten and flow variable basis via Outfall 

001; stormwater overflow includin wet deck runoff, fire deluge water and wash water from the Rege rative Catalytic Oxidizer (RCO) 

and Regenerative Thermal Oxidize (RTO) Units on an intermittent 

and flow variable basis via Outfall 02; st01mwater overflow including non-contact cooling water, boil r blowdown, boiler scrubber water, log flume water, vehicle wash w ter, boiler feed pre-treatment water and treated domestic wastewater from the equalization pond on an 

intermittent and flow variable basis ia Outfall 004; storm water runoff 

IN ADDITION November 2, 2012 37 TexReg 8881 
ment has determined that this p oposed repeal will not have an 

adverse economic effect on sm II or micro business carriers because it is simply a repeal of a ata collection and analysis requirement. In accord with the G vernment Code §2006.002, the 

department is not required to pr are a regulatory flexibility analysis. 

TAKINGS IMPACT ASSESSM NT. The department has determined that no private real pr perty interests are affected by 

this proposal and that this pro osal does not restrict or limit 

an owner's right to property th t would otherwise exist in the 

absence of government action nd does not constitute a taking 

or require a takings impact ass ssment under the Government 

Code §2007.043. 

REQUEST FOR PUBLIC COM ENT. To be considered, written comments on the proposal ust be submitted no later than 

5:00 p.m. on December 3, 201 , to Sara Waitt, general counsel, by email at chiefclerk@td .state.tx.us or by mail at Mail 

Code 113-2A, Texas Departmen of Insurance, P.O. Box 149104, 

Austin, Texas 78714-9104. An dditional copy of the comment 

must be simultaneously submitt d to Doug Danzeiser, manager, 

by email at LHLcomments@t i.state.tx.us or by mail at Mail 

Code 107-2A, Texas Departmen of Insurance, P.O. Box 149104, 

Austin, Texas 78714-9104. A y request for a public hearing 

must be submitted separately t the Office of Chief Clerk, Mail 

Code 113-2A, Texas Departmen of Insurance, P.O. Box 149104, 

Austin, Texas 78714-9104 bef e the close of the public comment period. If a hearing is h ld, written and oral comments 

presented at the hearing will be considered. 

STATUTORY AUTHORITY. Th repeal of §3.3713 is proposed 

pursuant to Insurance Code §1 01.007 and §36.001. Section 

1301.007 provides that the c missioner of insurance must 

adopt rules as necessary to im lement Chapter 1301. Section 

36.001 provides that the commi sioner of insurance may adopt 

any rules necessary and appro riate to implement the powers 

and duties of the Texas Dep ment of Insurance under the 

Insurance Code and other laws of this state. 

CROSS REFERENCE TO S TUTE. The proposed repeal 

affects regulation pursuant to t e following statute: Insurance 

Code §36.001 and §1301.007 

§3.3713. Submission of Plan; Co ection and Analysis oflriformation 

Concerning the Effects of Underco pensated Care. 

This agency hereby certifies tha the proposal has been reviewed 

by legal counsel and found to be ithin the agency's legal authority to adopt. 

Filed with the Office of the Se retary of State on October 19, 

2012. 

TRD-201205451 

Sara Waitt 

General Counsel 

Texas Department of Insurance 

Earliest possible date of adoption: ecember 2, 2012 

For further information, please call: (512) 463-6327 

• • 

TITLE 30. ENVIRONMENTAL QUALITY 

PART 1. TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY 

37 TexReg 8718 November 2, 2012 Texas Register 

CHAPTER 101. GENERAL AIR QUALITY 

RULES 

SUBCHAPTER H. EMISSIONS BANKING 

AND TRADING 

DIVISION 4. DISCRETE EMISSION CREDIT 

BANKING AND TRADING 

30 TAC §101.379 

The Texas Commission on Environmental Quality (TCEQ, 

agency, or commission) proposes an amendment to §1 01.379. 

If adopted, amended §101.379 will be submitted to the United 

States Environmental Protection Agency (EPA) as a revision to 

the state implementation plan (SIP). 

Background and Summary of the Factual Basis for the Proposed 

Rule 

The Electric Reliability Council of Texas, Inc. (ERCOT) manages the electrical grid within the ERCOT region of Texas, with 

oversight by the Public Utility Commission of Texas (PUCT). On 

March 22, 2012, the PUCT repealed 16 TAC §25.507, to replace 

the Emergency Interruptible Load Service (ElLS) program with 

the Emergency Response Service (ERS) program (new 16 TAC 

§25.507). Like the ElLS program, the new ERS program is designed to help decrease the likelihood of requiring firm load shedding (i.e., rolling black-outs) during an ERGOT-declared energy 

emergency by decreasing the power demand on the electrical 

grid. Subsequent changes to ERGOT's Nodal Protocols reflecting the new ERS program became effective on June 1, 2012. 

On December 10, 2008, the commission adopted the amendment to §101.379 to restrict the use of discrete emissions reduction credits (DERCs) in the Dallas-Fort Worth 1997 eight-hour 

ozone nonattainment area (DFW area) to a level consistent with 

the attainment and maintenance of the 1997 eight-hour ozone 

National Ambient Air Quality Standard (NAAQS). The rule requires an annual review of the DFW area DERC program to 

determine the flow control limit and apportion available DERCs 

for potential use. The rule also provides an exemption from the 

DFW flow control limit for DERCs used in response to an ERGOT-declared emergency situation and references the specific 

ERCOT protocols that detail the emergency notice. The existing rule references the previous version of the ERCOT protocols, which could potentially cause confusion for regulated entities and delay the processing of DERC usage requests. The 

proposed rulemaking would update §1 01.379 to reference the 

version of the ERCOT protocols effective on June 1, 2012. 

The amendment to §101.379 is proposed concurrently with the 

amendment to 30 TAC §117.10 that will be published in a separate rulemaking in this issue of the Texas Register. 

Section Discussion 

The commission proposes to revise §1 01.379(c)(2)(D) to reference the version of the ERCOT Protocols effective on June 1, 

2012. 

Fiscal Note: Costs to State and Local Government 

Jeffrey Horvath, Strategic Planning and Assessment Section 

analyst, has determined that for the first five-year period the 

proposed rule is in effect, no fiscal implications are anticipated 

for the TCEQ or other units of state or local government. The 
amendment to Chapter 101 is proposed concurrently with an 

amendment to Chapter 117. 

The new ERS program is designed to help decrease the likelihood of rolling black-outs during an ERGOT-declared ene.rgy 

emergency by decreasing the power demand on the electncal 

grid. The proposed amendment in Chapter 101 wo~ld merely update a reference in agency rules to reflect the vers1on of the ERGOT Protocols effective on June 1, 2012. The proposed amendment to Chapter 101 does not add or delete administrative or 

regulatory requirements for the TCEQ or other units of state .or 

local government and, therefore, no fiscal implications are antiCipated due to the administration or enforcement of the proposed 

change. 

Public Benefits and Costs 

Mr. Horvath has also determined that for each year of the first 

five years the proposed rule is in effect, the public benefit anticipated from the changes seen in the proposed rules will be 

the facilitation of the new ERS program administered by ERGOT, which is designed to help decrease the likelihood of rolling 

black-outs during an ERGOT-declared energy emergency by decreasing the power demand on the electrical grid. 

The proposed rule is not expected to have a fiscal impact on 

individuals or businesses. The proposed amendment to Chapter 101 would merely update a reference in agency rules toreflect the version of the ERCOT Protocols effective June 1, 2012, 

which reflect changes to ERGOT's new ERS program. 

Small Business and Micro-Business Assessment 

No adverse fiscal implications are anticipated for small or micro-businesses as a result of the proposed rule. The amendment to §1 01.379 is proposed concurrently with the amendment 

to §117.1 0. Together. the proposed amendments are intend~dto 

facilitate the implementation of the new ERS program administered by ERCOT. The new ERS program is designed to help decrease the likelihood of rolling black-outs during an ERGOT-declared energy emergency by decreasing the power demand on 

the electrical grid. The proposed amendment to Chapter 101 

would merely update a reference in agency rules to reflect ~he 

version of the ERCOT Protocols effective June 1, 2012, wh1ch 

reflect changes to ERGOT's new ERS program. 

Small Business Regulatory Flexibility Analysis 

The commission has reviewed this proposed rulemaking and determined that a small business regulatory flexibility analysis is not 

required because the proposed rule does not adv~rsely affect a 

small or micro-business in a material way for the f1rst f1ve years 

that the proposed rule is in effect. 

Local Employment Impact Statement 

The commission has reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rule does ~ot ~dversely affect a 

local economy in a material way for the f1rst f1ve years that the 

proposed rule is in effect. 

Draft Regulatory Impact Analysis 

The commission reviewed the proposed rule in light of the 

regulatory analysis requirements of Texas Governme~t Code, 

§2001.0225 and determined that the proposed rulemak1ng does 

not meet the definition of a major environmental rule. Texas 

Government Code, §2001.0225 states that a major environmental rule is a rule for which the specific intent is to protect the 

environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the 

economy, a sector of the economy, productivity, competition, 

jobs, the environment, or the public health and safety of the 

state or a sector of the state. Furthermore, while the proposed 

rulemaking does not constitute a major environmental r.ule, 

even if it did, a regulatory impact analysis would not be requ1red 

because the proposed rulemaking does not meet any of the fo~r 

applicability criteria for requiring a regulatory impact analysis 

for a major environmental rule. Texas Government Code, 

§2001.0225 applies only to a major environmental rule that 1) 

exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement 

of state law, unless the rule is specifically required by federal 

law; 3) exceeds a requirement of a delegation agreement. or 

contract between the state and an agency or representative 

of the federal government to implement a state and federal 

program; or 4) adopts a rule solely under the general P?Wers ~f 

the agency instead of under a specific state law. Spec1f1cally, 1t 

does not meet any of the four applicability criteria listed in Texas 

Government Code, §2001.0225 because: 1) the proposed 

rulemaking is part of the SIP, and as such is designed to meet, 

not exceed the relevant standard set by federal law; 2) parts 

of the proposed rulemaking are directly required by s~ate Ia":'; 

3) no contract or delegation agreement covers the top1c that IS 

the subject of this proposed rulemaking; and 4) the proposed 

rulemaking is authorized by specific sections of Texas Health 

and Safety Code (THSC). Chapter 382 (also known .as the 

Texas Clean Air Act). and the Texas Water Code, wh1ch are 

cited in the Statutory Authority section of this preamble. 

The proposed rule implements requirements of the Federal 

Clean Air Act (FCAA). Under 42 United States Code (USC), 

§7410, each state is required to adopt and implement .a s.IP 

containing adequate provisions to implement. attain, ma1nta1n, 

and enforce the NAAQS within the state. While 42 USC, §7410 

generally does not require specific programs, meth~ds, or 

reductions in order to meet the standard, SIPs must mclude 

enforceable emission limitations and other control measures, 

means, or techniques (including economic incentives such as 

fees, marketable permits, and auctions of emissions rights). as 

well as schedules and timetables for compliance as may be 

necessary or appropriate to meet the applicab~e requi~ements 

of the FCAA (meaning 42 USC, Chapter 85, A1r Pollution P_revention and Control). The provisions of the FCAA recogmze 

that states are in the best position to determine what programs 

and controls are necessary or appropriate in order to meet 

the NAAQS. This flexibility allows states, affected industry, 

and the public to collaborate on the best methods for attaining 

the NAAQS for the specific regions in the state. Even though 

the FCAA allows states to develop their own programs, this 

flexibility does not relieve a state from developing a program 

that meets the requirements of 42 USC, §7 410. States are not 

free to ignore the requirements of 42 USC, §7 410, and must 

develop programs and control measures to assure that their 

SIPs provide for implementation, attainment, maintenan~~· 

and enforcement of the NAAQS within the state. The spec1f1c 

intent of the proposed rulemaking is to update references to the 

ERCOT protocols in §1 01.379 to be consistent with §117.10. 

While the proposed rulemaking protects the environment or reduces risks to human health from environmental exposure, it 

does not constitute a major environmental rule under Texas Government Code, §2001.0225(g)(3), because it does not adversely 

affect in a material way the economy, a sector of the economy, 

PROPOSED RULES November 2, 2012 37 TexReg 8719 
productivity, competition, or jobs, nor would the rulemaking adversely affect in a material way the environment, or the public 

health and safety of the state or a sector of the state. The rulemaking as a result is not subject to a regulatory impact analysis 

under Texas Government Code, §2001.0225, because it is not a 

major environmental rule. 

The requirement to provide a fiscal analysis of regulations in the 

Texas Government Code was amended by Senate Bill (SB) 633, 

75th Legislature, 1997. The intent of SB 633 was to require 

agencies to conduct a regulatory impact analysis of extraordinary rules. These rules are identified in the statutory language 

as major environmental rules that will have a material adverse 

impact and will exceed a requirement of state law, federal law, 

or a delegated federal program; or are adopted solely under the 

general powers of the TCEQ. With the understanding thatthis requirement would seldom apply, the commission provided a cost 

estimate for SB 633 that concluded: based on an assessment of 

rules adopted by the agency in the past, it is not anticipated that 

the bill will have significant fiscal implications for the agency due 

to its limited application. The commission also noted that the 

number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in 

part, on the criteria set forth in the bill that exempted rules from 

the full analysis unless the rule was a major environmental rule 

that exceeded a federal law. 

The FCAA does not always require specific programs, methods, 

or reductions in order to meet the NAAQS; thus, states must develop programs for each nonattainment area to help ensure that 

those areas will meet the attainment deadlines. Because of the 

ongoing need to address nonattainment issues and to meet the 

requirements of 42 USC, §7410, the commission routinely proposes and adopts revisions to the SIP and rules. The legislature 

is presumed to understand this federal scheme. If each rule proposed for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every revision to 

the SIP would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by 

the Legislative Budget Board (LBB) in its fiscal notes. Since the 

legislature is presumed to understand the fiscal impacts of the 

bills it passes, and that presumption is based on information provided by state agencies and the LBB, the commission believes 

that the intent of SB 633 was only to require the full regulatory 

impact analysis for rules that are extraordinary in nature. While 

the rules have a broad impact, that impact is no greater than is 

necessary or appropriate to meet the requirements of the FCAA. 

For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a), 

because they are required by federal law. 

The commission has consistently applied this construction to its 

rules since this statute was enacted in 1997. Since that time, 

the legislature has revised the Texas Government Code, but 

left this provision substantially unamended. It is presumed that, 

when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the 

statute, the legislature is deemed to have accepted the agency's 

interpretation (Central Power & Light Co. v. Sharp, 919 S.W.2d 

485, 489 (Tex. App. Austin 1995), writ denied with per curiam 

opinion respecting another issue, 960 S.W.2d 617 (Tex. 1997); 

Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. 

Austin 1990, no writ) superseded by statute on another point 

of law, Tax Code §112.108, Other Actions Prohibited, as recognized in, First State Bank of Dumas v. Sharp, 863 S.W.2d 81, 83 

37 TexReg 8720 November 2, 2012 Texas Register 

(Tex. App. Austin 1993, no writ); Cf. Humble Oil & Refining Co. 

v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm 

Mut. Auto Ins. Co., 9 S.W.3d 884, 893 (Tex. App. Austin 2000); 

Southwestern Life Ins. Co. v. Montemayor, 24 S.W.3d 581 (Tex. 

App. Austin 2000, pet. denied); and Coastallndust. Water Auth. 

v. Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978)). 

The commission's interpretation of the regulatory impact analysis requirements is also supported by a change made to the 

Texas Administrative Procedure Act (APA) by the legislature in 

1999. In an attempt to limit the number of rule challenges based 

upon APA requirements, the legislature clarified that state agencies are required to meet these sections of the APA against the 

standard of substantial compliance as required in Texas Government Code, §2001.035. The legislature specifically identified 

Texas Government Code, §2001.0225 as falling under this standard. The commission has complied with the requirements of 

Texas Government Code, §2001.0225. 

Even if the proposed rulemaking constitutes a major environmental rule under Texas Government Code, §2001.0225(g)(3), 

a regulatory impact analysis is not required because this exemption is part of the commission's SIP for making progress toward 

the attainment and maintenance of the NAAQS. Therefore, the 

proposed rulemaking does not exceed a standard set by federal 

law or exceed an express requirement of state law, since they 

are part of an overall regulatory scheme designed to meet, not 

exceed the relevant standard set by federal law (NAAQS). The 

commission is charged with protecting air quality within the state 

and to design and submit a plan to achieve attainment and maintenance of the federally mandated NAAQS. The Third District 

Court of Appeals upheld this interpretation in Brazoria County 

v. Texas Comm'n on Envtl. Quality, 128 S.W. 3d 728 (Tex. 

App. -Austin 2004, no writ). The specific intent of the proposed 

rulemaking is to update references to the ERGOT protocols in 

§101.379 to be consistent with §117.10. This proposal, therefore, does not exceed an express requirement of federal law. 

The amendment is needed to implement state law but does exceed those new requirements. Finally, this rulemaking was not 

developed solely under the general powers of the agency, but 

is authorized by specific sections of THSC, Chapter 382, which 

are cited in the Statutory Authority section of this preamble, including THSC, §382.012 and §382.019. Because this proposed 

rulemaking does not meet any of the four applicability requirements, Texas Government Code, §2001.0225(b) does not apply 

and a regulatory impact analysis is not required. 

Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address 

listed under the Submittal of Comments section of this preamble. 

Takings Impact Assessment 

The commission evaluated the proposed rulemaking and performed an analysis of whether the proposed rulemaking constitutes a taking under Texas Government Code, Chapter 2007. 

The commission's preliminary assessment indicates Texas Government Code, Chapter 2007 does not apply. 

Under Texas Government Code, §2007.002(5), taking means: 

"(A) a governmental action that affects private real property, in 

whole or in part or temporarily or permanently, in a manner that 

requires the governmental entity to compensate the private real 

property owner as provided by the Fifth and Fourteenth Amendments to the United States Constitution or Section 17 or 19, Article I, Texas Constitution; or (B) a governmental action that (i) 

affects an owner's private real property that is the subject of the 
governmental action, in whole or in part or temporarily or permanently, in a manner that restricts or limits the owner's right to the 

property that would otherwise exist in the absence of the governmental action; and (ii) is the producing cause of a reduction of at 

least 25 percent in the market value of the affected private real 

property, determined by comparing the market value of the property as if the governmental action is not in effect and the market 

value of the property determined as if the governmental action 

is in effect." 

Promulgation and enforcement of the rulemaking would be neither a statutory nor a constitutional taking of private real property. 

The primary purpose of the rulemaking is an update to Chapter 

101, Subchapter H to ensure consistency with ERGOT's new 

ERS program. This rule is not burdensome, restrictive, or limiting of rights to private real property because the rulemaking regulates the use of electric generators in certain limited emergency 

situations. Furthermore, the rulemaking benefits the public by 

potentially decreasing the likelihood of requiring firm load shedding (i.e., rolling black-outs) when additional control measures 

are needed to achieve or maintain attainment of the federal air 

quality standards through the use of electric generators. The 

rulemaking does not affect a landowner's rights in private real 

property because this rulemaking does not burden, restrict, or 

limit the owner's right to property, nor does it reduce the value 

of any private real property by 25% or more beyond that which 

would otherwise exist in the absence of the regulations. Therefore, this rule does not constitute a taking under Texas Government Code, Chapter 2007. 

Consistency with the Coastal Management Program 

The commission reviewed the proposed rulemaking and found 

that the proposal is subject to the Texas Coastal Management 

Program (CMP) in accordance with the Coastal Coordination 

Act, Texas Natural Resources Code, §§33.201 et seq., and 

therefore must be consistent with all applicable CMP goals 

and policies. The commission conducted a consistency determination for the proposed rule in accordance with Coastal 

Coordination Act Implementation Rules, 31 TAG §505.22 and 

found the proposed rulemaking is consistent with the applicable 

CMP goals and policies. 

The CMP goal applicable to the proposed rulemaking is the goal 

to protect, preserve, and enhance the diversity, quality, quantity, 

functions, and values of coastal natural resource areas (31 TAG 

§501.12(1)). The CMP policy applicable to the proposed rulemaking is the policy that commission rules comply with federal 

regulations in 40 Code of Federal Regulations to protect and enhance air quality in the coastal areas (31 TAG §501.32). The 

proposed rulemaking would not increase emissions of air pollutants and is therefore consistent with the CMP goal in 31 TAG 

§501.12(1) and the CMP policy in 31 TAG §501.32. 

Promulgation and enforcement of this rule will not violate or exceed any standards identified in the applicable CMP goals and 

policies because the proposed rule is consistent with these CMP 

goals and policies and because this rule does not create or have 

a direct or significant adverse effect on any coastal natural resource areas. Therefore, in accordance with 31 TAG §505.22(e), 

the commission affirms that this rulemaking action is consistent 

with CMP goals and policies. 

Written comments on the consistency of this rulemaking may be 

submitted to the contact person at the address listed under the 

Submittal of Comments section of this preamble. 

Effect on Sites Subject to the Federal Operating Permits Program 

The proposed amendment will not require any changes to federal 

operating permits. 

Announcement of Hearing 

The commission will hold a public hearing on this proposal in 

Austin on November 28, 2012, at 2:00p.m. in Building E, Room 

201S, at the commission's central office located at 12100 Park 

35 Circle. The hearing is structured for the receipt of oral or written comments by interested persons. Individuals may present 

oral statements when called upon in order of registration. Open 

discussion will not be permitted during the hearing; however, 

commission staff members will be available to discuss the proposal 30 minutes prior to the hearing. 

Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact 

Sandy Wong, Office of Legal Services, at (512) 239-1802. Requests should be made as far in advance as possible. 

Submittal of Comments 

Written comments may be submitted to Bruce McAnally, MC 

205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087 

or faxed to (512) 239-4808. Electronic comments may be 

submitted at: http://www5. tceq. texas.govlruleslecomments!. 

File size restrictions may apply to comments being submitted 

via the eComments system. All comments should reference 

Rule Project Number 2012-025-117-AI. The comment period 

closes December 5, 2012. Copies of the proposed rulemaking can be obtained from the commission's website at 

http://www.tceq.texas.gov/navlruleslpropose_adopt.html. For 

further information, please contact Ray Schubert, Air Quality 

Planning Section, (512) 239-6615. 

Statutory Authority 

The amendment is proposed under the authority of the following: Texas Water Code (TWC), §5.1 02, General Powers, §5.1 03, 

Rules, and §5.1 05, General Policy (these provisions authorize 

the commission to adopt rules necessary to carry out its powers 

and duties as well as all general policies under the TWC); Texas 

Health and Safety Code (THSC), §382.017, Rules, which authorizes the commission to adopt rules consistent with the policy 

and purposes of the Texas Clean Air Act; THSC, §382.002, Policy and Purpose, which establishes the commission's purpose 

to safeguard the state's air resources, consistent with the protection of public health, general welfare, and physical property; 

THSC, §382.011, General Powers and Duties, which authorizes 

the commission to control the quality of the state's air; THSC, 

§382.012, State Air Control Plan, which authorizes the commission to prepare and develop a general, comprehensive plan for 

the control of the state's air; and THSC, §382.051(d), Permitting 

Authority of Commission; Rules, which authorizes the commission to adopt rules as necessary to comply with changes in federal law or regulations applicable to permits under THSC, Chapter 382. Finally, the amendment is also proposed under Federal 

Clean Air Act (FCAA), 42 United States Code (USC), §§7 401, et 

seq., which requires states to submit state implementation plan 

revisions that specify the manner in which the National Ambient 

Air Quality Standard will be achieved and maintained within each 

air quality control region of the state. 

PROPOSED RULES November 2, 2012 37 TexReg 8721 
The proposed amended implements TWC, §§5.1 02, 5.1 03, and 

5.105; THSC, §§382.002, 382.011, 382.012, 382.016, 382.017, 

and 382.021; and FCAA, 42 USC, §§7401 et seq. 

§101.379. Program Audits and Reports. 

(a) No later than three years after the effective date of this section, and every three years thereafter, the executive director will audit 

this program. 

( 1) The audit will evaluate the timing of credit generation 

and use, the impact of the program on the state's attainment demonstration and the emissions of hazardous air pollutants, the availability and 

cost of credits, compliance by the participants, and any other elements 

the executive director may choose to include. 

(2) The executive director will recommend measures to 

remedy any problems identified in the audit. The trading of discrete 

emission credits may be discontinued by the executive director in 

part or in whole and in any manner, with commission approval, as a 

remedy for problems identified in the program audit. 

(3) The audit data and results will be completed and submitted to the United States Environmental Protection Agency and made 

available for public inspection within six months after the audit begins. 

(b) No later than February I of each calendar year, the executive director shall develop and make available to the general public 

and the United States Environmental Protection Agency a report that 

includes the following information for the previous calendar year: 

(I) the amount of each pollutant emission credits generated 

under this division; 

(2) the amount of each pollutant emission credits used under this division; 

(3) a summary of all trades completed under this division; 

and 

(4) the amount of discrete emission reduction credits 

(DERC) approved for use under subsection (c) of this section. 

(c) No later than October I of each year, the executive director 

will complete, and make available to the general public and the United 

States Environmental Protection Agency, an annual review to determine the number of DERCs available for potential use in the upcoming calendar year for the Dallas-Fort Worth (DFW) eight-hour ozone 

nonattainment area. The annual review will include the calculation of 

the flow control limit as specified in subsection ( c )(2)(A) of this section to ensure noninterference with attainment and maintenance of the 

ozone National Ambient Air Quality Standard (NAAQS) and the apportionment of approved DERCs. 

(1) For the 2009 control period, the flow control limit 

for DERCs available for use is the number prescribed in the DFW 

Eight-Hour Ozone Attainment Demonstration SIP Revision for the 

1997 eight-hour ozone standard, in tons per day, not to be exceeded in 

any day, where a day is a 24-hour period from midnight to midnight. 

(2) For any control period after 2009, the annual review 

will establish a flow control limit for that year, in tons per day, not to 

be exceeded in any day, where a day is a 24-hour period from midnight 

to midnight. 

(A) The flow control limit for a particular year will be 

determined using the following equation: 

Figure: 30 TAC §101.379(c)(2)(A) (No change.) 

(B) If use of the entire DERC bank would not interfere with attainment and maintenance of the 1997 eight-hour ozone 

NAAQS in the DFW eight-hour ozone nonattainment area, then the 

37 TexReg 8722 November 2, 2012 Texas Register 

number of DERCs potentially available for use is the total number of 

DERCs in the bank. 

(C) If the flow control limit, as calculated in the equation in subparagraph (A) of this paragraph, is greater than the total number ofDERCs requested for use in accordance with §101.376(d) of this 

title (relating to Discrete Emission Credit Use) the executive director: 

(i) may approve all requested Notice oflntent to Use 

Discrete Emission Credits (DEC-2 Form) submittals; and 

(ii) will consider any late DEC-2 Forms submitted 

as provided under §101.376(d)(3) of this title that is not an Electric 

Reliability Council of Texas, Inc. (ERCOT)-declared emergency situation as defined in subparagraph (D) of this paragraph, but will not 

otherwise approve a late submittal that would exceed the flow control 

limit established by the equation under subsection (c)(2)(A) of this section. 

(D) If the DEC-2 Forms are submitted in response to 

an ERCOT -declared emergency situation, the request will not be subject to the flow control limit and may be approved provided all other 

requirements are met. For the purposes of this subparagraph, an ERCOT -declared emergency situation is defined as the period of time that 

an ERCOT-issued emergency notice (as defined in ERCOT Protocols. 

Section 2: Definitions and Acronyms (June 1, 2012) and issued as specified in ERCOT Protocols, Section 6: Adjustment Period and Real-Time 

Operations (June 1, 20 12))[,-asdefu!edia~Preteee!s, See#enb 

Dcji11iliem tmti Aerenyms Wfil U,. ~ isstled ey ~as speeffied ffi ~ Preteee!s, See#en J-c Dispatch Wfil U, ~] is 

applicable to the serving electric power generating system. The emergency situation is considered to end upon expiration of the emergency 

notice issued by ERCOT. 

This agency hereby certifies that the proposal has been reviewed 

by legal counsel and found to be within the agency's legal authority to adopt. 

Filed with the Office of the Secretary of State on October 19, 

2012. 

TRD-20 1205435 

Robert Martinez 

Director, Environmental Law Division 

Texas Commission on Environmental Quality 

Earliest possible date of adoption: December 2, 2012 

For further information, please call: (512) 239-2141 

• 

CHAPTER 117. 

POLLUTION FROM NI 

SUBCHAPTER A. 

30 TAC §117.10 

The Texas Commission on 

agency, or commission) propos 

If adopted, amended §117.10 

States Environmental Protectio 

the state implementation plan ( 

• 

OGEN COMPOUNDS 

ITIONS 

nvironmental Quality (TCEQ, 

san amendment to §117.10. 

ill be submitted to the United 

Agency (EPA) as a revision to 

IP). 

Background and Summary ofth Factual Basis for the Proposed 

Rule 

The Electric Reliability Council f Texas, Inc. (ERCOT) manages the electrical grid within th ERCOT region of Texas, with 
The proposed amended imple ents TWC, §§5.1 02, 5.1 03, and 

5.105; THSC, §§382.002, 382. 11, 382.012, 382.016, 382.017, 

and 382.021; and FCAA, 42 U C, §§7401 et seq. 

§101.379. Program Audits and eports. 

(a) No later than three yea s after the effective date of this section, and every three years therea er, the executive director will audit 

this program. 

(1) The audit will eva! ate the timing of credit generation 

and use, the impact of the program n the state's attainment demonstration and the emissions of hazardo air pollutants, the availability and 

cost of credits, compliance by the articipants, and any other elements 

the executive director may choose o include. 

(2) The executive dir tor will recommend measures to 

remedy any problems identified i the audit. The trading of discrete 

emission credits may be disconti ued by the executive director in 

part or in whole and in any mann r, with commission approval, as a 

remedy for problems identified in he program audit. 

(3) The audit data and results will be completed and submitted to the United States Environ ental Protection Agency and made 

available for public inspection wit ·n six months after the audit begins. 

(b) No later than Februa 

utive director shall develop and 

and the United States Environme 

includes the following informatio 

1 of each calendar year, the execke available to the general public 

a! Protection Agency a report that 

for the previous calendar year: 

( 1) the amount of each ollutant emission credits generated 

under this division; 

(2) the amount of each pollutant emission credits used under this division; 

(3) a summary of all tr des completed under this division; 

and 

(4) the amount of di crete emission reduction credits 

(DERC) approved for use under s section (c) of this section. 

(c) No later than October 1 of each year, the executive director 

will complete, and make available o the general public and the United 

States Environmental Protection gency, an annual review to determine the number ofDERCs avail lefor potential use in the upcoming calendar year for the Dallas-F rt Worth (DFW) eight-hour ozone 

nonattainment area. The annual re iew will include the calculation of 

the flow control limit as specified n subsection ( c )(2)(A) of this section to ensure noninterference wi attainment and maintenance of the 

ozone National Ambient Air Qual Standard (NAAQS) and the apportionment of approved DERCs. 

(1) For the 2009 cont ol period, the flow control limit 

for DERCs available for use is e number prescribed in the DFW 

Eight-Hour Ozone Attainment D monstration SIP Revision for the 

1997 eight-hour ozone standard, in tons per day, not to be exceeded in 

any day, where a day is a 24-hour eriod from midnight to midnight. 

(2) For any control pe iod after 2009, the annual review 

will establish a flow control limit r that year, in tons per day, not to 

be exceeded in any day, where ada is a 24-hour per.iod from midnight 

to midnight. 

(A) The flow contr I limit for a particular year will be 

determined using the following eq ation: 

Figure: 30 TAC §101.379(c)(2)(A (No change.) 

(B) If use of the e tire DERC bank would not interfere with attainment and mainten nee of the 1997 eight-hour ozone 

NAAQS in the DFW eight-hour one nonattainment area, then the 

37 TexReg 8722 November 2, 2012 Texas Register 

number ofDERCs potentially a ailable for use is the total number of 

DERCs in the bank. 

(C) If the flow c ntrollimit, as calculated in the equation in subparagraph (A) of this p ragraph, is greater than the total number ofDERCs requested for use i accordance with§ 1 01.376( d) of this 

title (relating to Discrete Emissi n Credit Use) the executive director: 

(i) may appro e all requested Notice oflntent to Use 

Discrete Emission Credits (DEC 2 Form) submittals; and 

(ii) will consi er any late DEC-2 Forms submitted 

as provided under §101.376(d)( ) of this title that is not an Electric 

Reliability Council of Texas, In . (ERCOT)-declared emergency situation as defined in subparagrap (D) of this paragraph, but will not 

otherwise approve a late submit! I that would exceed the flow control 

limit established by the equation nder subsection (c)(2)(A) of this section. 

(D) If the DEC-2 orms are submitted in response to 

an ERCOT-declared emergency ituation, tl1e request will not be subject to the flow control limit and ay be approved provided all other 

requirements are met. For the p oses of this subparagraph, an ERCOT-declared emergency situatio is defined as the period of time that 

an ERCOT-issued emergency not ce (as defined in ERCOT Protocols, 

Section2: De nitionsandAcron s June 1,2012 andissuedass ecified in ERCOT Protocols, Section : Ad"ustment Period and Real-Time 

Operations (June 1, 2012))[,as ffi.ER(;.f}J:Pretecels, &e#en:J.:. 

Dejfflitiel'lS tmd Acronyms Wfi.l , ~ issHea by ERGG+ as .speeffied ffi ER(;.f}J: Pretece!s, J+ Dispetch Wfi.l U, ~] is 

applicable to the serving electric ower generating system. The emergency situation is considered toe d upon expiration of the emergency 

notice issued by ERCOT. 

This agency hereby certifies th the proposal has been reviewed 

by legal counsel and found to b within the agency's legal authority to adopt. 

Filed with the Office of the Se retary of State on October 19, 

2012. 

TRD-201205435 

Robert Martinez 

Director, Environmental Law Divisi 

Texas Commission on Environment I Quality 

Earliest possible date of adoption: ecember 2, 2012 

For further information, please call: (512) 239-2141 

• 

CHAPTER 117. 

• • 

CONTROL OF AIR 

POLLUTION FROM NITROGEN COMPOUNDS 

SUBCHAPTER A. DEFINITIONS 

30 TAC §117.10 

The Texas Commission on Environmental Quality (TCEQ, 

agency, or commission) proposes an amendment to §117.10. 

If adopted, amended §117.10 will be submitted to the United 

States Environmental Protection Agency (EPA) as a revision to 

the state implementation plan (SIP). 

Background and Summary ofthe Factual Basis for the Proposed 

Rule 

The Electric Reliability Council of Texas, Inc. (ERGOT) manages the electrical grid within the ERGOT region of Texas, with 
oversight by the Public Utility Commission of Texas (PUCT). On 

March 22, 2012, the PUCT repealed 16 TAC §25.507, to replace the Emergency Interruptible Load Service (EI LS) program 

with the Emergency Response Service (ERS) program (new 16 

TAC §25.507). Like the ElLS program, the new ERS program 

is designed to help decrease the likelihood of requiring firm load 

shedding (i.e., rolling black-outs) during an ERGOT-declared energy emergency by decreasing the power demand on the electrical grid. Under the ERS program, participants commit to decrease their power consumption from the electrical grid during 

a declared energy emergency. ERS program participants might 

meet this commitment by decreasing overall power use, replacing power consumption from the grid with local generation by operating local emergency backup generators, or a combination of 

both. However, unlike the ElLS program, the new ERS program 

allows qualified participants to provide power back into the electrical grid for sale during an ERGOT-declared emergency under 

limited circumstances. 

Operating an emergency generator as part of ERGOT's former 

ElLS program meets the existing definition of an emergency situation in §117.10. The existing definition of an emergency situation in §117.1 0 includes the period of time that an emergency notice issued by ERGOT is applicable to the serving electric power 

generating system and references the specific ERGOT protocols 

that detail the emergency notice. However, the Chapter 117 definition of an emergency situation also specifically excludes operation for purposes of supplying power for distribution to the electrical grid. Therefore, operation of an emergency generator that 

also provides power back to the electrical grid would not be considered an emergency situation under the current Chapter 117 

definition even if the operation was at the directive of ERGOT 

under the ERS program. 

While Chapter 117 would not prohibit companies from participating in the new ERS program, the Chapter 117 rules that apply 

in the Dallas-Fort Worth and Houston-Galveston-Brazoria 1997 

eight-hour ozone nonattainment areas have specific provisions 

that restrict the non-emergency operational hours of emergency 

generators. For these sources to qualify for an exemption from 

the rule control requirements, participants in the ERS program 

would have to count hours of operation during an ERGOT emergency as non-emergency use if power is sold to the grid and 

might risk losing exemption status under Chapter 117 if the operational hours exceed the exemption criteria. 

The proposed rulemaking would update the definition of emergency situation in § 117.10 to ensure consistency with ERGOT's 

new ERS program. The proposed rulemaking would reference 

the most recent version of the ERGOT protocols. The proposed 

rulemaking would also revise the definition of emergency situation to reflect changes made by ERGOT to promote reliability 

during energy emergencies by allowing the operation of generators for purposes of selling power to the electric grid under limited 

circumstances. 

The amendment to §117.10 is proposed concurrently with an 

amendment to §101.379 that will be published in a separate rulemaking in this issue of the Texas Register. 

Demonstrating Nonintetference under Federal Clean Air Act, 

Section 11 0(1) 

The commission provides the following information to demonstrate why the proposed change to the definition of emergency 

situation in Chapter 117 will not negatively impact the status of 

the state's progress towards attainment with the 1997 eight-hour 

ozone National Ambient Air Quality Standard (NAAQS), will not 

interfere with control measures, and will not prevent reasonable 

further progress toward attainment of the ozone NAAQS. 

As mentioned elsewhere in this preamble, the Chapter 117 rules 

provide exemptions for certain sources in the Dallas-Fort Worth 

and Houston-Galveston-Brazoria 1997 eight-hour ozone nonattainment areas that operate exclusively during emergency situations or operate for a limited number of hours in non-emergency situations. Under the existing Chapter 117 rules, the period of time during an ERGOT-declared emergency is considered an emergency situation. The commission has interpreted 

this to mean that when demonstrating compliance with the Chapter 117 exemption criteria, participants in ERGOT's former ElLS 

program were not required to include the hours of operation for 

generators operated during an ERGOT-declared emergency as 

non-emergency operation. 

ERGOT's new ERS program promotes reliability during energy 

emergencies by allowing qualified participants to provide power 

for distribution to the electrical grid during an ERGOT-declared 

emergency. Under the existing Chapter 117 rules, participants 

in ERGOT's new ERS program are not required to include the 

hours of operation for generators operated during an ERGOTdeclared emergency when demonstrating compliance with the 

Chapter 117 exemption criteria as long as these sources do not 

provide power for distribution to the electrical grid. Because the 

existing Chapter 117 definition of an emergency situation specifically excludes operation for purposes of supplying power for distribution to the electrical grid, ERS program participants would 

have to count hours of operation during an ERGOT-declared 

emergency when demonstrating compliance with the Chapter 

117 exemption criteria if power is provided back into the grid. 

This practice could result in ERS program participants losing exemption status under Chapter 117 if the non-emergency hours 

exceed the exemption criteria and potentially discourage ERS 

program participants from supplying excess generation back to 

the grid during an ERGOT-declared energy emergency. The proposed rulemaking would prevent ERS program participants from 

potentially losing exemption status under Chapter 117 if they 

provide power to the electrical grid during an ERGOT-declared 

emergency. The proposed rulemaking ensures that the changes 

made to ERGOT's new ERS program do not narrow the scope 

of what the commission currently considers an emergency situation. 

The period of time during an ERGOT-declared emergency is 

currently considered an emergency situation under the existing 

Chapter 117 rules. The proposed revisions to the definition of 

emergency situation would limit the circumstances under which 

a generator could provide power for distribution to the electrical 

grid to only those operations that are part of an ERGOT emergency response program and in direct response to ar1 instruction by ERGOT during the period of an ERGOT emergency notice. Therefore, the proposed amendment would not increase 

the number of sources that could qualify for exemption under the 

Chapter 117 rules or increase the frequency or duration of the operation during an emergency situation. For these reasons, the 

commission determined that the proposed rulemaking will not 

negatively impact the status of the state's attainment with the 

1997 eight-hour ozone NAAQS and should not be considered 

as backsliding under the Federal Clean Air Act. 

Section Discussion 

The commission proposes to amend the definition of emergency 

situation in §117.10(15). The commission proposes to revise 

PROPOSED RULES November 2, 2012 37 TexReg 8723 
§117.1 0(15)(A)(ii) to reference the version of the ERGOT Protocols effective on June 1, 2012. The commission proposes 

§117.10(15)(A)(vii) to include operation of an emergency generator as part of an ERGOT emergency response program when 

the operation is in direct response to an instruction by ERGOT 

during the period of an ERGOT emergency notice as specified 

in §117.10(15)(A)(ii). The commission is requesting comment 

on whether an ERGOT energy emergency alert level should be 

specified in proposed § 117.1 0( 15)(A)(vii). 

The commission also proposes to reformat the existing 

§117.10(15)(8) description of the situations that are not considered emergency situations. Proposed clause (i) incorporates 

the existing portion of the definition indicating that an emergency 

situation does not include operation for training purposes or 

other foreseeable events. Existing §117.10(15)(B) indicates 

that an emergency situation does not include operation for 

purposes of supplying power for distribution to the electric grid. 

Proposed clause (ii) indicates that an emergency situation does 

not include operation for purposes of supplying power for distribution to the electric grid except as specified under proposed 

§ 117.1 0( 15)(A)(vii) regarding emergency generator operation 

that is part of an ERGOT emergency response program and 

is in direct response to an instruction by ERGOT during the 

period of an ERGOT emergency notice. Proposed clause (ii) 

is necessary to reflect changes made by ERGOT to promote 

reliability during energy emergencies by allowing the operation 

of generators for purposes of selling power to the electric grid 

under limited circumstances. 

Fiscal Note: Costs to State and Local Government 

Jeffrey Horvath, Strategic Planning and Assessment Section analyst, has determined that for the first five-year period the proposed rule is in effect, no significant fiscal implications are anticipated for the TCEQ. Other state agencies or units of local government that participate in the ERS program may benefit under 

the proposed rule in that they could more easily maintain their 

Chapter 117 exemption status while providing power to the electrical grid during an ERGOT-declared emergency. 

The proposed rulemaking would revise the Chapter 117 definition of an emergency situation and is intended to facilitate the implementation of the new ERS program administered by ERGOT. 

The new ERS program is designed to help decrease the likelihood of rolling black-outs during an ERGOT-declared energy 

emergency by decreasing the power demand on the electrical 

grid. Program participants would commit to decrease their overall power consumption from the electrical grid during a declared 

energy emergency by decreasing overall power use, replacing 

power consumption by operating local emergency backup generators, or a combination of both. However, unlike the current 

emergency program, the new ERS program allows qualified participants to sell power back into the electrical grid during an ERGOT-declared emergency under limited circumstances. 

Because the existing Chapter 117 definition of an emergency situation specifically excludes generator operation for purposes of 

supplying power for distribution to the electrical grid, ERS program participants would have to count generator hours of operation during an ERGOT -declared emergency when demonstrating 

compliance with the Chapter 117 exemption criteria. This practice could result in ERS program participants losing exemption 

status under Chapter 117 if the non-emergency hours exceed 

the exemption criteria. The proposed rulemaking would remedy 

this situation by allowing ERS program participants to not have 

to count these generator operational hours as non-emergency 

37 TexReg 8724 November 2, 2012 Texas Register 

hours and to sell power back to the electrical grid during an ERGOT-declared emergency. 

The proposed rulemaking does not add additional administrative 

or regulatory requirements for the TCEQ and, therefore, no significant fiscal implications are anticipated for the TCEQ. Other 

state agencies or units of local government that participate in 

the ERS program may benefit under the proposed rule in that 

they could maintain their Chapter 117 exemption status while 

providing power to the electrical grid during an ERGOT-declared 

emergency. These participants may also benefit from the sale of 

electric power back to the grid during one of these emergencies, 

but those benefits do not result from this rulemaking. 

Public Benefits and Costs 

Mr. Horvath has also determined that for each year of the first 

five years the proposed rule is in effect, the public benefit anticipated from the changes seen in the proposed rules will be 

the facilitation of the new ERS program administered by ERGOT, which is designed to help decrease the likelihood of rolling 

black-outs during an ERGOT-declared energy emergency by decreasing the power demand on the electrical grid. 

The proposed rule is not expected to have a fiscal impact on 

individuals or businesses. Businesses who participate in the 

ERS program may benefit under the proposed rule in that they 

could maintain their Chapter 117 exemption status while providing power to the electrical grid during an ERGOT-declared emergency. These participants may also benefit from the sale of electric power back to the grid during one of these emergencies, but 

those benefits do not result from this rulemaking. 

Small Business and Micro-Business Assessment 

No adverse fiscal implications are anticipated for small or micro-businesses as a result of the proposed rule. The proposed 

rule would allow ERS program participants to sell power back 

into the power grid during an ERGOT-declared emergency without having to count those generator operational hours towards 

Chapter 117 compliance. 

Small Business Regulatory Flexibility Analysis 

The commission has reviewed this proposed rulemaking and determined that a small business regulatory flexibility analysis is not 

required because the proposed rule does not adversely affect a 

small or micro-business in a material way for the first five years 

that the proposed rule is in effect. 

Local Employment Impact Statement 

The commission has reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rule does not adversely affect a 

local economy in a material way for the first five years that the 

proposed rule is in effect. 

Draft Regulatory Impact Analysis Determination 

The commission reviewed the proposed rule in light of the 

regulatory analysis requirements of Texas Government Code, 

§2001.0225 and determined that the proposed rulemaking does 

not meet the definition of a major environmental rule. Texas 

Government Code, §2001.0225 states that a major environmental rule is a rule for which the specific intent is to protect the 

environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the 

economy, a sector of the economy, productivity, competition, 

jobs, the environment, or the public health and safety of the 
state or a sector of the state. Furthermore, while the proposed 

rulemaking does not constitute a major environmental r.ule, 

even if it did, a regulatory impact analysis would not be reqwred 

because the proposed rulemaking does not me~t any of the four 

applicability criteria for requiring a regulatory Impact analysis 

for a major environmental rule. Texas Government Code, 

§2001.0225 applies only to a major environmental rule that 1) 

exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement 

of state law, unless the rule is specifically required by federal 

law; 3) exceeds a requirement of a delegation agreement. or 

contract between the state and an agency or representative 

of the federal government to implement a state and federal 

program; or 4) adopts a rule solely ~~der the general P?Wers of 

the agency instead of under a spec1f1c state law. SpecJ.fJcally, Jt 

does not meet any of the four applicability criteria listed m Texas 

Government Code, §2001.0225 because: 1) the proposed 

rulemaking is part of the SIP, and as such is designed to meet, 

not exceed the relevant standard set by federal law; 2) parts 

of the proposed rulemaking are directly required by s~ate Ia~; 

3) no contract or delegation agreement covers the top1c that IS 

the subject of this proposed rulemaking; and 4) the proposed 

rulemaking is authorized by specific sections of Texas Health 

and Safety Code (THSC), Chapter 382 (also known .as the 

Texas Clean Air Act), and the Texas Water Code, which are 

cited in the Statutory Authority section of this preamble. 

The proposed rule implements requirements of the Federal 

Clean Air Act (FCAA). Under 42 United States Code (USC), 

§7410, each state is required to adopt and impl~ment ~ s.IP 

containing adequate provisions to implement, atta1n, mamta1n, 

and enforce the NAAQS within the state. While 42 USC, §7410 

generally does not require specific programs, meth~ds, or 

reductions in order to meet the standard, SIPs must Include 

enforceable emission limitations and other control measures, 

means or techniques (including economic incentives such as 

fees, ~arketable permits, and auctions of emissions rights), as 

well as schedules and timetables for compliance as may be 

necessary or appropriate to meet the applicab~e requi~ements 

of the FCAA (meaning 42 USC, Chapter 85, Air Pollution P~evention and Control). The provisions of the FCAA recogmze 

that states are in the best position to determine what programs 

and controls are necessary or appropriate in order to meet 

the NAAQS. This flexibility allows states, affected industry, 

and the public to collaborate on the best methods for attaining 

the NAAQS for the specific regions in the state. Even though 

the FCAA allows states to develop their own programs, this 

flexibility does not relieve a state from developing a program 

that meets the requirements of 42 USC, §7 410. States are not 

free to ignore the requirements of 42 USC, §7 410, and must 

develop programs and control measures to assure that their 

SIPs provide for implementation, attainment, maintena.n.c~. and 

enforcement of the NAAQS within the state. The specJfJc 1ntent 

of the proposed rulemaking is merely an u~date to t~e definiti?n 

of emergency situation in §117.1 0, ensunng cons1stency w1th 

ERGOT's new ERS program while also reflecting changes m~de 

by ERGOT to promote reliability during energy emergenc1es 

throughout the state under limited circumstances. 

While the proposed rulemaking protect~ the environment or reduces risks to human health from enwonmental exposure, 1t 

does not constitute a major environmental rule under Texas Government Code, §2001.0225(g)(3), because it does not adversely 

affect in a material way the economy, a sector of the economy, 

productivity, competition, or jobs, nor would the rulemaking adversely affect in a material way the environment, or the public 

health and safety of the state or a sector of the state. The rul~­

making as a result is not subject to a regulatory 1m pact. ~nalys1s 

under Texas Government Code, §2001.0225 because Jt JS not a 

major environmental rule. 

The requirement to provide a fiscal analysis of regulations in the 

Texas Government Code was amended by Senate Bill (SB) 633, 

75th Legislature, 1997. The intent of SB 633 yvas to require 

agencies to conduct a regulatory impact analysis of extraordinary rules. These rules are identifie? in the statutory language 

as major environmental rules that Will have a matenal adverse 

impact and will exceed a requirement of state law, federal law, 

or a delegated federal program; or are adopted solely under the 

general powers of the TCEQ. With the und~rs~anding ~hat this requirement would seldom apply, the commiSSion provided a cost 

estimate for SB 633 that concluded: based on an assessment of 

rules adopted by the agency in the past, it is not anticipated that 

the bill will have significant fiscal implications for the agency due 

to its limited application. The commission also noted that the 

number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in 

part, on the criteria set forth in the bill that exempted rules from 

the full analysis unless the rule was a major environmental rule 

that exceeded a federal law. 

The FCAA does not always require specific programs, methods, 

or reductions in order to meet the NAAQS; thus, states must develop programs for each nonattainment area to help ensure that 

those areas will meet the attainment deadlines. Because of the 

ongoing need to address nonattainment iss~e~ and to.meet the 

requirements of 42 USC, §7410, the commJssJon rout1n~ly proposes and adopts revisions to the SIP and rules. The legislature 

is presumed to understand this federal s.cheme. If each ru!e proposed for inclusion in the SIP was considered to be a m~J?r environmental rule that exceeds federal law, then every revJsJon to 

the SIP would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by 

the Legislative Budget Board (LBB) in its fiscal notes. Since the 

legislature is presumed to understand the fiscal impacts of the 

bills it passes and that presumption is based on i~fo~matio~ provided by state agencies and the LBB, the commiSSion believes 

that the intent of SB 633 was only to require the full regulatory 

impact analysis for rules that are extraordinary in nature .. While 

the rule has a broad impact, that impact is no greater than IS necessary or appropriate to meet the requirements of the FCAA. For 

these reasons, rules adopted for inclusion in the SIP fall under 

the exception in Texas Government Code, §2001.0225(a), because they are required by federal law. 

The commission has consistently applied this construction to its 

rules since this statute was enacted in 1997. Since that time, 

the legislature has revised the Texas Government Code, but 

left this provision substantially unamended. It is presumed that, 

when an agency interpretation is in effect at the t1me the legislature amends the laws without making substantial change 1n the 

statute, the legislature is deemed to have accepted the agency's 

interpretation (Central Power& Light Co. v. Sharp, 919 S.~.2d 

485, 489 (Tex. App. Austin 1995), writ denied with per cunam 

opinion respecting another issue, 960 S.W.2d 617 (Tex. 1997); 

Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. 

Austin 1990, no writ) superseded by statute on another point 

of law, Tax Code §112.1 08, Other Actions Prohibited, as recognized in, First State Bank of Dumas v. Sharp, 863 S. W.2d 81, 83 

(Tex. App. Austin 1993, no writ); Cf. Humble Oil & Refining Co. 

PROPOSED RULES November 2, 2012 37 TexReg 8725 
v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm 

Mut. Auto Ins. Co., 9 S.W.3d 884, 893 (Tex. App. Austin 2000); 

Southwestern Life Ins. Co. v. Montemayor, 24 S.W.3d 581 (Tex. 

App. Austin 2000, pet. denied); and Coastallndust. Water Auth. 

v. Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978)). 

The commission's interpretation of the regulatory impact analysis requirements is also supported by a change made to the 

Texas Administrative Procedure Act (APA) by the legislature in 

1999. In an attempt to limit the number of rule challenges based 

upon APA requirements, the legislature clarified that state agencies are required to meet these sections of the APA against the 

standard of substantial compliance as required in Texas Government Code, §2001.035. The legislature specifically identified 

Texas Government Code, §2001.0225 as falling under this standard. The commission has complied with the requirements of 

Texas Government Code, §2001.0225. 

Even if the proposed rulemaking constitutes a major environmental rule under Texas Government Code, §2001.0225(g)(3), 

a regulatory impact analysis is not required because this exemption is part of the commission's SIP for making progress toward 

the attainment and maintenance of the NMOS. Therefore, the 

proposed rulemaking does not exceed a standard set by federal law or exceed an express requirement of state law, since 

they are part of an overall regulatory scheme designed to meet, 

not exceed the relevant standard set by federal law (NMQS). 

The commission is charged with protecting air quality within the 

state and to design and submit a plan to achieve attainment 

and maintenance of the federally mandated NMQS. The Third 

District Court of Appeals upheld this interpretation in Brazoria 

County v. Texas Comm'n on Envtl. Quality, 128 S.W. 3d 728 

(Tex. App. -Austin 2004, no writ). The specific intent of the proposed rulemaking is merely an update to the definition of emergency situation in §117.1 0, ensuring consistency with ERGOT's 

new ERS program while also reflecting changes made by ERGOT to promote reliability during energy emergencies throughout the state under limited circumstances. This proposal, therefore, does not exceed an express requirement of federal law. 

The amendment is needed to implement state law but does exceed those new requirements. Finally, this rulemaking was not 

developed solely under the general powers of the agency, but 

is authorized by specific sections of THSC, Chapter 382, which 

are cited in the Statutory Authority section of this preamble, including THSC, §382.012 and §382.019. Because this proposed 

rulemaking does not meet any of the four applicability requirements, Texas Government Code, §2001.0225(b) does not apply, 

and a regulatory impact analysis is not required. 

Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address 

listed under the Submittal of Comments section of this preamble. 

Takings Impact Assessment 

The commission evaluated the proposed rulemaking and performed an analysis of whether the proposed rulemaking constitutes a taking under Texas Government Code, Chapter 2007. 

The commission's preliminary assessment indicates Texas Government Code, Chapter 2007 does not apply. 

Under Texas Government Code, §2007.002(5), taking means: 

"(A) a governmental action that affects private real property, in 

whole or in part or temporarily or permanently, in a manner that 

requires the governmental entity to compensate the private real 

property owner as provided by the Fifth and Fourteenth Amend37 TexReg 8726 November 2, 2012 Texas Register 

ments to the United States Constitution or Section 17 or 19, Article I, Texas Constitution; or (B) a governmental action that: (i) 

affects an owner's private real property that is the subject of the 

governmental action, in whole or in part or temporarily or permanently, in a manner that restricts or limits the owner's right to the 

property that would otherwise exist in the absence of the governmental action; and (ii) is the producing cause of a reduction of at 

least 25 percent in the market value of the affected private real 

property, determined by comparing the market value of the property as if the governmental action is not in effect and the market 

value of the property determined as if the governmental action 

is in effect." 

Promulgation and enforcement of the rulemaking would be neither a statutory nor a constitutional taking of private real property. 

The primary purpose of the rule is an update to Chapter 117, 

Subchapter A to ensure consistency with ERGOT's new ERS 

program. This rule is not burdensome, restrictive, or limiting 

of rights to private real property because the rulemaking regulates the use of electric generators in certain limited emergency 

situations. Furthermore, the rulemaking benefits the public by 

potentially decreasing the likelihood of requiring firm load shedding (i.e., rolling black-outs) when additional control measures 

are needed to achieve or maintain attainment of the federal air 

quality standards through the use of electric generators. The 

rulemaking does not affect a landowner's rights in private real 

property because this rulemaking does not burden, restrict, or 

limit the owner's right to property, nor does it reduce the value 

of any private real property by 25% or more beyond that which 

would otherwise exist in the absence of the regulations. Therefore, this rule does not constitute a taking under Texas Government Code, Chapter 2007. 

Consistency with the Coastal Management Program 

The commission reviewed the proposed rulemaking and found 

that the proposal is subject to the Texas Coastal Management 

Program (CMP) in accordance with the Coastal Coordination 

Act, Texas Natural Resources Code, §§33.201 et seq., and 

therefore must be consistent with all applicable CMP goals 

and policies. The commission conducted a consistency determination for the proposed rules in accordance with Coastal 

Coordination Act Implementation Rules, 31 TAC §505.22 and 

found the proposed rulemaking is consistent with the applicable 

CMP goals and policies. 

The CMP goal applicable to the proposed rulemaking is the goal 

to protect, preserve, and enhance the diversity, quality, quantity, 

functions, and values of coastal natural resource areas (31 TAC 

§501.12(1)). The CMP policy applicable to the proposed rulemaking is the policy that commission rules comply with federal 

regulations in 40 Code of Federal Regulations to protect and enhance air quality in the coastal areas (31 TAC §501.32). The 

proposed rulemaking would not increase emissions of air pollutants and is, therefore, consistent with the CMP goal in 31 TAC 

§501.12(1) and the CMP policy in 31 TAC §501.32. 

Promulgation and enforcement of this rule will not violate or exceed any standards identified in the applicable CMP goals and 

policies because the proposed rule is consistent with these CMP 

goals and policies and because the rule does not create or have 

a direct or significant adverse effect on any coastal natural resource areas. Therefore, in accordance with 31 TAC §505.22(e), 

the commission affirms that this rulemaking action is consistent 

with CMP goals and policies. 
Written comments on the consistency of this rulemaking may be 

submitted to the contact person at the address listed under the 

Submittal of Comments section of this preamble. 

Effect on Sites Subject to the Federal Operating Permits Program 

The proposed amendment will not require any changes to federal 

operating permits. 

Announcement of Hearing 

The commission will hold a public hearing on this proposal in 

Austin on November 28, 2012, at 2:00p.m. in Building E, Room 

201S, at the commission's central office located at 12100 Park 

35 Circle. The hearing is structured for the receipt of oral or written comments by interested persons. Individuals may present 

oral statements when called upon in order of registration. Open 

discussion will not be permitted during the hearing; however, 

commission staff members will be available to discuss the proposal 30 minutes prior to the hearing. 

Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact 

Sandy Wong, Office of Legal Services, at (512) 239-1802. Requests should be made as far in advance as possible. 

Submittal of Comments 

Written comments may be submitted to Bruce McAnally, MC 

205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087 

or faxed to (512) 239-4808. Electronic comments may be 

submitted at: http:llwww5.tceq.texas.govlruleslecomments! 

File size restrictions may apply to comments being submitted 

via the eComments system. All comments should reference 

Rule Project Number 2012-025-117-AI. The comment period 

closes December 5, 2012. Copies of the proposed rulemaking can be obtained from the commission's Web site at 

http:llwww.tceq.texas.gov/navlruleslpropose_adopt.html. For 

further information, please contact Ray Schubert, Air Quality 

Planning Section, (512) 239-6615. 

Statutory Authority 

The amendment is proposed under the authority of the following: Texas Water Code (TWC), §5.1 02, General Powers, §5.1 03, 

Rules, and §5.105, General Policy (these provisions authorize 

the commission to adopt rules necessary to carry out its powers and duties as well as all general policies under the TWC); 

Texas Health and Safety Code (THSC), Texas Clean Air Act 

(TCAA), §382.017, Rules, which authorizes the commission to 

adopt rules consistent with the policy and purposes of the TCAA; 

THSC, §382.002, Policy and Purpose, which establishes the 

commission's purpose to safeguard the state's air resources, 

consistent with the protection of public health, general welfare, 

and physical property; THSC, §382.011, General Powers and 

Duties, which authorizes the commission to control the quality 

of the state's air; and THSC, §382.012, State Air Control Plan, 

which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; and 

THSC, §382.051 (d), Permitting Authority of Commission; Rules, 

which authorizes the commission to adopt rules as necessary to 

comply with changes in federal law or regulations applicable to 

permits under THSC, Chapter 382. Finally, the amendment is 

also proposed under FCAA, 42 USC, §§7401, et seq., which requires states to submit SIP revisions that specify the manner in 

which the NAAQS will be achieved and maintained within each 

air quality control region of the state. 

The proposed amended implements TWC, §§5.1 02, 5.1 03, and 

5.105; THSC, §§382.002, 382.011, 382.012, 382.016, 382.017, 

and 382.021; and FCAA, 42 USC, §§7401 et seq. 

§ 117.10. Definitions. 

Unless specifically defined in the Texas Clean Air Act or Chapter 101 

of this title (relating to General Air Quality Rules), the terms in this 

chapter have the meanings commonly used in the field of air pollution 

control. Additionally, the following meanings apply, unless the context clearly indicates otherwise. Additional definitions for terms used 

in this chapter are found in §3.2 and §101.1 of this title (relating to Definitions). 

( 1) Annual capacity factor--The total annual fuel consumed by a unit divided by the fuel that could be consumed by the unit 

if operated at its maximum rated capacity for 8, 760 hours per year. 

(2) Applicable ozone nonattainment area--The following 

areas, as designated under the 1990 Federal Clean Air Act Amendments. 

(A) Beaumont-Port Arthur ozone nonattainment area-

-An area consisting of Hardin, Jefferson, and Orange Counties. 

(B) Dallas-Fort Worth ozone nonattainment area--An 

area consisting of Collin, Dallas, Denton, and Tarrant Counties. 

(C) Dallas-Fort Worth eight-hour ozone nonattairunent 

area--An area consisting of Collin, Dallas, Denton, Ellis, Johnson, 

Kaufman, Parker, Rockwall, and Tarrant Counties. 

(D) Houston-Galveston-Brazoria ozone nonattainment 

area--An area consisting of Brazoria, Chambers, Fort Bend, Galveston, 

Harris, Liberty, Montgomery, and Waller Counties. 

(3) Auxiliary steam boiler--Any combustion equipment 

within an electric power generating system, as defined in this section, 

that is used to produce steam for purposes other than generating 

electricity. An auxiliary steam boiler produces steam as a replacement 

for steam produced by another piece of equipment that is not operating 

due to planned or unplanned maintenance. 

( 4) Average activity level for fuel oil firing--The product of 

an electric utility unit's maximum rated capacity for fuel oil firing and 

the average annual capacity factor for fuel oil firing for the period from 

January 1, 1990, to December 31, 1993. 

(5) Block one-hour average--An hourly average of data, 

collected starting at the beginning of each clock hour of the day and 

continuing until the start of the next clock hour. 

(6) Boiler--Any combustion equipment fired with solid, 

liquid, and/or gaseous fuel used to produce steam or to heat water. 

(7) Btu--British thermal unit. 

(8) Chemical processing gas turbine--A gas turbine that 

vents its exhaust gases into the operating stream of a chemical process. 

(9) Continuous emissions monitoring system (CEMS)--

The total equipment necessary for the continuous determination and 

recordkeeping of process gas concentrations and emission rates in 

units of the applicable emission limitation. 

(10) Daily--A calendar day starting at midnight and continuing until midnight the following day. 

(11) Diesel engine--A compression-ignited two- or fourstroke engine that liquid fuel injected into the combustion chamber ignites when the air charge has been compressed to a temperature sufficiently high for auto-ignition. 

PROPOSED RULES November 2, 2012 37 TexReg 8727 
(12) Duct burner--A unit that combusts fuel and that is 

placed in the exhaust duct from another unit (such as a stationary gas 

turbine, stationary internal combustion engine, kiln, etc.) to allow the 

firing of additional fuel to heat the exhaust gases. 

(13) Electric generating facility (EGF)--A unit that generates electric energy for compensation and is owned or operated by a 

person doing business in this state, including a municipal corporation, 

electric cooperative, or river authority. 

(14) Electric power generating system--One electric power 

generating system consists of either: 

(A) for the purposes of Subchapter C of this chapter 

(relating to Combustion Control at Major Utility Electric Generation 

Sources in Ozone Nonattainment Areas), all boilers, auxiliary steam 

boilers, and stationary gas turbines (including duct burners used in turbine exhaust ducts) at electric generating facility (EGF) accounts that 

generate electric energy for compensation; are owned or operated by 

an electric cooperative, municipality, river authority, public utility, or a 

Public Utility Commission of Texas regulated utility, or any of its successors; and are entirely located in one of the following ozone nonattainment areas: 

(i) Beaumont-Port Arthur; 

(ii) Dallas-Fort Worth; 

(iii) Dallas-Fort Worth eight-hour; or 

(iv) Houston-Galveston-Brazoria; 

(B) for the purposes of Subchapter E, Division I of 

this chapter (relating to Utility Electric Generation in East and Central 

Texas), all boilers, auxiliary steam boilers, and stationary gas turbines 

at EGF accounts that generate electric energy for compensation; are 

owned or operated by an electric cooperative, independent power 

producer, municipality, river authority, or public utility, or any of its 

successors; and are located in Atascosa, Bastrop, Bexar, Brazos, Calhoun, Cherokee, Fannin, Fayette, Freestone, Goliad, Gregg, Grimes, 

Harrison, Henderson, Hood, Hunt, Lamar, Limestone, Marion, 

McLennan, Milam, Morris, Nueces, Parker, Red River, Robertson, 

Rusk, Titus, Travis, Victoria, or Wharton County; or 

(C) for the purposes of Subchapter B of this chapter (relating to Combustion Control at Major Industrial, Commercial, and 

Institutional Sources in Ozone Nonattainment Areas), all units in the 

Houston-Galveston-Brazoria ozone nonattainment area that generate 

electricity but do not meet the conditions specified in subparagraph (A) 

of this paragraph, including, but not limited to, cogeneration units and 

units owned by independent power producers. 

(15) Emergency situation--As follows. 

(A) An emergency situation is any of the following: 

(i) an unforeseen electrical power failure from the 

serving electric power generating system; 

(ii) the period of time that an Electric Reliability 

Council of Texas, Inc. (ERCOT)-issued emergency notice (as defined 

in ERCOT Protocols, Section 2: Definitions and Acronyms (Jw1e 

I, 2012) and issued as specified in ERCOT Protocols, Section 6: 

Adiustment Period and Real-Time Operations (June I, 2012))[, as 

4ffi.Betl ffi ~ Proteeels, &etien .£7 Definitions end Acronyms 

tAj3fil ~ -2006}, -issHed ey the EleetFie Reliability ~ ~ ~ 

In&. (ERGOT) as~ ffi ~ Proteeels, &etien J.;. Disj9flteh 

tAj3fil.U,-2006},] is applicable to the serving electric power generating 

system. The emergency situation is considered to end upon expiration 

of the emergency notice issued by ERCOT; 

37 TexReg 8728 November 2, 2012 Texas Register 

(iii) an unforeseen failure of on-site electrical transmission equipment (e.g., a transformer); 

(iv) an unforeseen failure of natural gas service; 

(v) an unforeseen flood or fire, or a life-threatening 

situation; [ff] 

(vi) operation of emergency generators for Federal 

Aviation Administration licensed airports, military airports, or marwed 

space flight control centers for the purposes of providing power in anticipation of a power failure due to severe storm activity_;_Q!H 

(vii) operation of an emergency generator as part of 

an ERCOT emergency response program if the operation is in direct 

response to an instruction by ERCOT during the period of an ERCOT 

emergency notice as specified in clause (ii) of this subparagraph. 

(B) An emergency situation does not include: 

[ eperatiea fur ~ ~ SUjJj'llyiag pewer fur distributiea te tae 

e-le€trie grid, eperatiea fur trailliag J'lUFflSSes, eF ffiher fereseeable 

~] 

(i) operation for training purposes or other foreseeable events; or 

{ii) operation for purposes of supplying power for 

distribution to the electric grid, except as specified in subparagraph 

(A)(vii) of this paragraph. 

(16) Functionally identical replacement--A unit that performs the same function as the existing unit that it replaces, with the 

condition that the unit replaced must be physically removed or rendered 

permanently inoperable before the unit replacing it is placed into service. 

( 17) Heat input--The chemical heat released due to fuel 

combustion in a unit, using the higher heating value of the fuel. This 

does not include the sensible heat of the incoming combustion air. In 

the case of carbon monoxide (CO) boilers, the heat input includes the 

enthalpy of all regenerator off-gases and the heat of combustion of the 

incoming CO and of the auxiliary fuel. The enthalpy change of the fluid 

catalytic cracking unit regenerator off-gases refers to the total heat content of the gas at the temperature it enters the CO boiler, referring to 

the heat content at 60 degrees Fahrenheit, as being zero. 

( 18) Heat treat furnace--A furnace that is used in the manufacturing, casting, or forging of metal to heat the metal so as to produce 

specific physical properties in that metal. 

(19) High heat release rate--A ratio of boiler design heat 

input to firebox volume (as bounded by the front firebox wall where 

the burner is located, the firebox side waterwall, and extending to the 

level just below or in front of the first row of convection pass tubes) 

greater than or equal to 70,000 British thermal units per hour per cubic 

foot. 

(20) Horsepower rating--The engine manufacturer's maximum continuous load rating at the lesser of the engine or driven equipment's maximum published continuous speed. 

(21) Incinerator--As follows. 

(A) For the purposes of this chapter, the term "incinerator" includes both of the following: 

(i) a control device that combusts or oxidizes gases 

or vapors (e.g., thermal oxidizer, catalytic oxidizer, vapor combustor); 

and 

(ii) an incinerator as defined in § 101.1 of this title 

(relating to Definitions). 
(B) The term "incinerator" does not apply to boilers or 

process heaters as defined in this section, or to flares as defined in 

§101.1 ofthis title. 

(22) Industrial boiler--Any combustion equipment, not including utility or auxiliary steam boilers as defined in this section, fired 

with liquid, solid, or gaseous fuel, that is used to produce steam or to 

heat water. 

(23) International Standards Organization (ISO) conditions--ISO standard conditions of 59 degrees Fahrenheit, 1.0 

atmosphere, and 60% relative humidity. 

(24) Large utility system--All boilers, auxiliary steam boilers, and stationary gas turbines that are located in the Dallas-Fort Worth 

or the Dallas-Fort Worth eight-hour ozone nonattainment area, and 

were part of one electric power generating system on January 1, 2000, 

that had a combined electric generating capacity equal to or greater than 

500 megawatts. 

(25) Lean-burn engine--A spark-ignited or compressionignited, Otto cycle, diesel cycle, or two-stroke engine that is not capable of being operated with an exhaust stream oxygen concentration 

equal to or less than 0.5% by volume, as originally designed by the 

manufacturer. 

(26) Low annual capacity factor boiler, process heater, or 

gas turbine supplemental waste heat recovery unit--An industrial, commercial, or institutional boiler; process heater; or gas turbine supplemental waste heat recovery unit with maximum rated capacity: 

(A) greater than or equal to 40 million British thermal 

units per hour (.MMBtu/hr), but less than 100 .MMBtu/hr and an annual 

heat input less than or equal to 2.8 (1011 ) British thermal units per year 

(Btu/yr), based on a rolling 12-month average; or 

(B) greater than or equal to 100 MMBtu/hr and an annual heat input less than or equal to 2.2 (10 11) Btu/yr, based on a rolling 

12-month average. 

(27) Low annual capacity factor stationary gas turbine or 

stationary internal combustion engine--A stationary gas turbine or stationary internal combustion engine that is demonstrated to operate less 

than 850 hours per year, based on a rolling 12-month average. 

(28) Low heat release rate--A ratio of boiler design heat 

input to firebox volume less than 70,000 British thermal units per hour 

per cubic foot. 

(29) Major source--Any stationary source or group of 

sources located within a contiguous area and under common control 

that emits or has the potential to emit: 

(A) at least 50 tons per year (tpy) of nitrogen oxides 

(NOx) and is located in the Beaumont-Port Arthur ozone nonattainment 

area: 

(B) at least 50 tpy ofNOxand is located in the DallasFort Worth or Dallas-Fort Worth eight-hour ozone nonattainment area; 

(C) at least 25 tpy ofNOxand is located in the HoustonGalveston-Brazoria ozone nonattainment area; or 

(D) the amount specified in the major source definition 

contained in the Prevention of Significant Deterioration of Air Quality 

regulations promulgated by the United States Environmental Protection Agency in 40 Code of Federal Regulations §52.21 as amended 

June 3, 1993 (effective June 3, 1994), and is located in Atascosa, 

Bastrop, Bexar, Brazos, Calhoun, Cherokee, Coma!, Fannin, Fayette, 

Freestone, Goliad, Gregg, Grimes, Harrison, Hays, Henderson, Hood, 

Hunt, Lamar, Limestone, Marion, McLennan, Milam, Morris, Nueces, 

Red River, Robertson, Rusk, Titus, Travis, Victoria, or Wharton 

County. 

(30) Maximum rated capacity--The maximum design heat 

input, expressed in million British thermal units per hour, unless: 

(A) the unit is a boiler, utility boiler, or process heater 

operated above the maximum design heat input (as averaged over any 

one-hour period), in which case the maximum operated hourly rate 

must be used as the maximum rated capacity; or 

(B) the unit is limited by operating restriction or permit 

condition to a lesser heat input, in which case the limiting condition 

must be used as the maximum rated capacity; or 

(C) the unit is a stationary gas turbine, in which case 

the manufacturer's rated heat consumption at the International Standards Organization (ISO) conditions must be used as the maximum 

rated capacity, unless limited by permit condition to a lesser heat input, in which case the limiting condition must be used as the maximum 

rated capacity; or 

(D) the unit is a stationary, internal combustion engine, 

in which case the manufacturer's rated heat consumption at Diesel 

Equipment Manufacturer's Association or ISO conditions must be used 

as the maximum rated capacity, unless limited by permit condition to 

a lesser heat input, in which case the limiting condition must be used 

as the maximum rated capacity. 

(31) Megawatt (MW) rating--The continuous MW output 

rating or mechanical equivalent by a gas turbine manufacturer at International Standards Organization conditions, without consideration 

to the increase in gas turbine shaft output and/or the decrease in gas 

turbine fuel consumption by the addition of energy recovered from exhaust heat. 

(32) Nitric acid--Nitric acid that is 30% to 100% in 

strength. 

(33) Nitric acid production unit--Any source producing nitric acid by either the pressure or atmospheric pressure process. 

(34) Nitrogen oxides (NO)--The sum of the nitric oxide 

and nitrogen dioxide in the flue gas or emission point, collectively expressed as nitrogen dioxide. 

(35) Parts per million by volume (ppmv)--All ppmv emission specifications specified in this chapter are referenced on a dry basis. When required to adjust pollutant concentrations to a specified 

oxygen (0,) correction basis, the following equation must be used. 

Figure: 30 TAC §117.10(35) (No change.) 

(36) Peaking gas turbine or engine--A stationary gas turbine or engine used intermittently to produce energy on a demand basis. 

(37) Plant-wide emission rate--The ratio of the total actual 

nitrogen oxides mass emissions rate discharged into the atmosphere 

from affected units at a major source when firing at their maximum 

rated capacity to the total maximum rated capacities for those units. 

(38) Plant-wide emission specification--The ratio of the total allowable nitrogen oxides mass emissions rate dischargeable into 

the atmosphere from affected units at a major source when firing at 

their maximum rated capacity to the total maximum rated capacities 

for those units. 

(39) Predictive emissions monitoring system (PEMS)--

The total equipment necessary for the continuous determination and 

recordkeeping of process gas concentrations and emission rates using 

process or control device operating parameter measurements and a 

PROPOSED RULES November 2, 2012 37 TexReg 8729 
conversion equation or computer program to produce results in units 

of the applicable emission limitation. 

( 40) Process heater--Any combustion equipment fired with 

liquid and/or gaseous fuel that is used to transfer heat from combustion gases to a process fluid, superheated steam, or water for the purpose of heating the process fluid or causing a chemical reaction. The 

term "process heater" does not apply to any unfired waste heat recovery heater that is used to recover sensible heat from the exhaust of any 

combustion equipment, or to boilers as defined in this section. 

(41) Pyrolysis reactor--A unit that produces hydrocarbon 

products from the endothermic cracking of feedstocks such as ethane, 

propane, butane, and naphtha using combustion to provide indirect 

heating for the cracking process. 

( 42) Reheat furnace--A furnace that is used in the manufacturing, casting, or forging of metal to raise the temperature of that metal 

in the course of processing to a temperature suitable for hot working or 

shaping. 

(43) Rich-bum engine--A spark-ignited, Otto cycle, fourstroke, naturally aspirated or turbocharged engine that is capable of 

being operated with an exhaust stream oxygen concentration equal to or 

less than 0.5% by volume, as originally designed by the manufacturer. 

(44) Small utility system--All boilers, auxiliary steam 

boilers, and stationary gas turbines that are located in the Dallas-Fort 

Worth or the Dallas-Fort Worth eight-hour ozone nonattainment area, 

and were part of one electric power generating system on January 1, 

2000, that had a combined electric generating capacity less than 500 

megawatts. 

(45) Stationary gas turbine--Any gas turbine system that is 

gas and/or liquid fuel fired with or without power augmentation. This 

unit is either attached to a foundation or is portable equipment operated at a specific minor or major source for more than 90 days in any 

12-month period. Two or more gas turbines powering one shaft must 

be treated as one unit. 

(46) Stationary internal combustion engine--A reciprocating engine that remains or will remain at a location (a single site at a 

building, structure, facility, or installation) for more than 12 consecutive months. Included in this definition is any engine that, by itself or 

in or on a piece of equipment, is portable, meaning designed to be and 

capable of being carried or moved from one location to another. Indicia of portability include, but are not limited to, wheels, skids, carrying 

handles, dolly, trailer, or platform. Any engine (or engines) that replaces an engine at a location and that is intended to perform the same 

or similar function as the engine being replaced is included in calculating the consecutive residence time period. An engine is considered 

stationary if it is removed from one location for a period and then returned to the same location in an attempt to circumvent the consecutive 

residence time requirement. Nonroad engines, as defined in 40 Code 

of Federal Regulations §89.2, are not considered stationary for the purposes of this chapter. 

( 4 7) System-wide emission rate--The ratio of the total actual nitrogen oxides mass emissions rate discharged into the atmosphere from affected units in an electric power generating system or 

portion thereof located within a single ozone nonattainment area when 

firing at their maximum rated capacity to the total maximum rated capacities for those units. For fuel oil firing, average activity levels must 

be used in lieu of maximum rated capacities for the purpose of calculating the system-wide emission rate. 

( 48) System-wide emission specification--The ratio of the 

total allowable nitrogen oxides mass emissions rate dischargeable into 

the atmosphere from affected units in an electric power generating sys37 TexReg 8730 November 2, 2012 Texas Register 

tern or portion thereoflocated within a single ozone nonattainment area 

when firing at their maximum rated capacity to the total maximum rated 

capacities for those units. For fuel oil firing, average activity levels 

must be used in lieu of maximum rated capacities for the purpose of 

calculating the system-wide emission specification. 

( 49) Thirty-day rolling average--An average, calculated 

for each day that fuel is com busted in a unit, of all the hourly emissions 

data for the preceding 30 days that fuel was com busted in the unit. 

(50) Twenty-four hour rolling average--An average, calculated for each hour that fuel is combusted (or acid is produced, for a 

nitric or adipic acid production unit), of all the hourly emissions data 

for the preceding 24 hours that fuel was com busted in the unit. 

(51) Unit--A unit consists of either: 

(A) for the purposes of§§ 117.105, 117.205, 117.305, 

117.1005, 117.1105, and 117.1205 of this title (relating to Emission 

Specifications for Reasonably Available Control Technology (RACT)) 

and each requirement of this chapter associated with §§117.105, 

117.205, 117.305, 117.1005, 117.1105, and 117.1205 ofthis title, any 

boiler, process heater, stationary gas turbine, or stationary internal 

combustion engine, as defined in this section; 

(B) for the purposes of §§117.110, 117.210, 117.310, 

117.1010, 117.1110, and 117.1210 of this title (relating to Emission 

Specifications for Attainment Demonstration) and each requirement of 

this chapter associated with §§117.110, 117.210, 117.310, 117.1010, 

117.1110, and 117.1210 of this title, any boiler, process heater, stationary gas turbine, or stationary internal combustion engine, as defined in 

this section, or any other stationary source of nitrogen oxides (NOJ at 

a major source, as defined in this section; 

(C) for the purposes of§ 117.2010 of this title (relating 

to Emission Specifications) and each requirement ofthis chapter associated with§ 117.2010 of this title, any boiler, process heater, stationary 

gas turbine (including any duct burner in the turbine exhaust duct), or 

stationary internal combustion engine, as defined in this section; 

(D) for the purposes of§ 117.2110 of this title (relating 

to Emission Specifications for Eight-Hour Attainment Demonstration) 

and each requirement of this chapter associated with § 117.2110 of this 

title, any stationary internal combustion engine, as defined in this section; 

(E) for the purposes of§ 117.3310 of this title (relating 

to Emission Specifications for Eight-Hour Attainment Demonstration) 

and each requirement of this chapter associated with§ 117.3310 of this 

title, any stationary internal combustion engine, as defined in this section; or 

(F) for the purposes of§117.410 and §117.1310 ofthis 

title (relating to Emission Specifications for Eight-Hour Attainment 

Demonstration) and each requirement of this chapter associated with 

§ 117.410 and§ 117.1310 of this title, any boiler, process heater, stationary gas turbine, or stationary internal combustion engine, as defined in 

this section, or any other stationary source ofNOx at a major source, as 

defined in this section. 

(52) Utility boiler--Any combustion equipment owned or 

operated by an electric cooperative, municipality, river authority, public utility, or Public Utility Commission of Texas regulated utility, fired 

with solid, liquid, and/or gaseous fuel, used to produce steam for the 

purpose of generating electricity. Stationary gas turbines, including 

any associated duct burners and unfired waste heat boilers, are not considered to be utility boilers. 

(53) Wood--Wood, wood residue, bark, or any derivative 

fuel or residue thereof in any form, including, but not limited to, saw-
dust, sander dust, wood chips, scraps, slabs, millings, shavings, and 

processed pellets made from wood or other forest residues. 

This agency hereby certifies that the proposal has been reviewed 

by legal counsel and found to be within the agency's legal authority to adopt. 

Filed with the Office of the Secretary of State on October 19, 

2012. 

TRD-201205434 

Robert Martinez 

Director. Environmental Law Division 

Texas Commission on Environmental Quality 

Earliest possible date of adoption: December 2, 2012 

For further information, please call: (512) 239-2141 

• • 

CHAPTER 291. UTILI Y REGULATIONS 

The Texas Commission on nvironmental Quality (TCEQ, 

agency, or commission) propos s to amend §§291.22, 291.102, 

291.105, and 291.113. 

Background and Summary oft Factual Basis for the Proposed 

Rules 

In 2011, the 82nd Legislature assed Senate Bill (SB) 573, relating to the granting of certifi ates of public convenience and 

necessity (CCNs). SB 573 am nded Texas Water Code (TWC), 

§§13.245, 13.2451, 13.246, a 13.254. TWC, §13.245(b) and 

(c-1)- (c-3) were amended to pecify that if a municipality has 

not consented to the inclusio of a CCN within its boundaries 

or extraterritorial jurisdiction ( T J) before the 180th day after a 

landowner or retail public utilit has made a formal request for 

service then the TCEQ may rant the CCN to the retail public utility without the municipali y's consent under certain conditions. SB 573 also provided a ditional criteria which the TCEQ 

shall consider before it grants he CCN to the retail public utility. 

If the CCN is granted, the TC Q must include a condition that 

facilities will be designed and onstructed according to the municipality's standards. TWC, § 3.245(c-4) and (c-5) were added 

by SB 573 to specify the coun ies in which the provisions of the 

TWC, §13.254(c-1)- (c-3) do ot apply. 

TWC, §13.2451(b) was amen ed by SB 573 to specify that the 

TCEQ may not extend a mu icipality's CCN beyond its ET J if 

a landowner elects to opt-out as allowed by TWC, §13.246(h). 

TWC, §13.2451(b-1) and (b-2 were added to specify the counties in which the provision do s not apply. 

TWC, §13.246(h) was amen ed by SB 573 to stipulate that a 

CCN applicant that has land re oved by landowner election may 

not be required to provide se ice to the removed land for any 

reason. 

TWC, §13.254 was amended by SB 573 to change the requirements for when the TCEQ m y revoke a CCN, modify the requirements for petitioning for the release of land from a CCN, 

and also shorten the TCEQ's review period for reviewing a release petition from 90 to 60 c lendar days. TWC, §13.254(a-5) 

and (a-6) created a process allowing a landowner of at least 

a 25-acre tract to request an expedited release from a CCN in 

counties meeting specific crit ria. TWC, §13.254(a-7) added requirements for notice of utility ate changes. TWC, §13.254(a-8) 

modified the criteria for revie ing a release petition filed under 

TWC, §13.254(a-1). TWC, § 3.254(a-9)- (a-11) were added to 

specify the counties in which t e modifications to the CCN release process made by TWC, § 3.254(a-8) do not apply. 

In a corresponding rulemaking published in this issue of the 

Texas Register, the commissio also proposes revisions to 30 

TAC Chapter 293, Water Distri s. 

Section by Section Discussion 

In addition to implementation o the state law discussed previously, the commission propose administrative changes to conform with Texas Register requir ments. 

§291.22, Notice of Intent to Ch nge Rates 

The commission proposes to mend §291.22(a)(4) to remove 

the word "and"; adding §291. 2(a)(5) - (7); and renumbering 

existing subsection (a)(5). The roposed amendment specifies 

that a utility shall include with e statement of intent provided 

to each landowner or ratepayer a notice of a proceeding under 

§291.113, the reason or reason for the proposed rate change, 

and any bill payment assistan e program available to low-income ratepayers. The commi sion proposes this amendment 

to implement the changes ma e to TWC, §13.254, in SB 573 

and for consistency with Texas egister requirements. 

§291.102, Criteria for Conside ng and Granting Certificates or 

Amendments 

The commission proposes to a end §291.1 02(h) to specify that 

an applicant for a CCN that has land removed from its proposed 

service area because of a land wner's election under this subsection may not be required to provide service to the removed 

land for any reason, including he violation of law or commission rules by the water and/o sewer system of another person. The commission propose this amendment to implement 

the changes made to TWC, §1 .246(h) in SB 573. 

§291.1 05, Contents of Certifica of Convenience and Necessity 

Applications 

The commission proposes to amend §291.1 05(b)(2) by removing the reference of "parag aph (3)" and replacing it with a 

reference to "paragraphs (3)- 7)." The proposed amendment 

specifies that, except as provi ed by paragraphs (3) - (7), the 

commission may not grant a CC to a retail public utility for a service area within the boundaries or ET J of a municipality without 

the consent of the municipality. he municipality may not unreasonably withhold its consent. s a condition of the consent, a 

municipality may require that al water and/or sewer facilities be 

designed and constructed in a ordance with the municipality's 

standards for facilities. The co mission proposes this amendment to implement changes m de to TWC, §13.245(b) by SB 

573. The commission propose to add §291.1 05(b)(4) and its 

subdivisions to implement cha ges made to TWC, §13.245(b) 

by SB 573. The commission reposes adding §291.105(b)(4) 

to denote that the commissio may grant a CCN to a retail 

public utility without a munic pality's consent under certain 

circumstances as outlined in p oposed §291.105(b)(4)(A)- (C) 

if the municipality has not cons nted under §291.105(b) before 

the 180th day after the date landowner or a retail public 

utility submits a formal reques for service to the municipality. 

Proposed §291.105(b)(4)(A) sp cifies that the commission may 

grant the CCN without the m nicipality's consent if the commission makes findings requir by §291.1 05(b)(3). Proposed 

§291.1 05(b)(4)(B) specifies tha the commission may grant the 

CCN without the municipality's consent if the municipality has 

not entered into a binding com itment to serve the requested 

area on or before the 180th day after the date the formal 

PROPOSED RULES November 2, 2012 37 TexReg 8731 
TESTIMONY 
Reference Number 

W-1 

W-2 

W-3 

W-4 

W-5 

W-6 

W-7 

W-8 

INDEX OF WRITTEN TESTIMONY 

Submitted by 

John Fainter, Jr., Association of Electric Companies of 

Texas 

Donald C. DiCristofaro, CCM, Blue Sky Environmental LLC 

Patrick Blanchard, Calpine Corporation 

Nathan Bigbee for Chad V. Seely, Electric Reliability Council 

of Texas, fuc. 

Richard H. Counihan, EnerNOC, fuc. 

William A. Scott, Exelon Corporation 

Craig R. Eckberg, NRG Companies 

Guy Donaldson, United States Environmental 

Protection Agency 
···AECT 

ASSOCIATION OF ELECTRIC 

COMPANIES OF TEXAS, INC 

1005 Congress Ave. Suite 600 • Austin, Texas 78701 

Phone 512.474.6725 • Fax 512.474.9670 

www.aect.net • info@aect.net 

W-1 

Rick Bluntzer, Chair • Don Clevenger, Vice Chair • John W. Fainter, President & CEO • Walton L. Baum, Executive Vice President • Christopher Miller, Corporate Secretary 

December 5, 2012 

VIA ELECTRONIC SUBMISSION & U.S. MAIL 

Bruce McAnally 

MC205 

Office of Legal Services 

Texas Commission on Environmental Quality 

P.O. Box 13087 

Austin, Texas 78711-3087 

Re: Comments of the Association of Electric Companies of Texas to 

proposed rules to revise definition of "emergency situation" in 

Section 117.1 0; Rule Project Number 2012-025-117 -AI; November 

2, 2012 Texas Register (37 Tex. Reg. 8722) 

Dear Mr. McAnally: 

The Association of Electric Companies of Texas (AECT) appreciates the 

opportunity to submit these comments regarding the TCEQ's proposed revisions to the 

definition of "emergency situation" in Section 117.10. 

AECT is an industry trade assoCiation representing electric companies in Texas. 

Organized in 1978, AECT provides a forum for member companies' representatives to 

exchange information on their industry, and to communicate with state and federal 

governmental officials. This letter is being submitted on behalf of the following AECT 

members: AEP Texas, CenterPoint Energy, El Paso Electric, Entergy, GDF SUEZ, 

Nextera Energy, Lone Star Transmission, Oncor, TXU Energy, Luminant, NRG, Reliant, 

TNMP, and Xcel Energy. 

AECT supports the proposed revisions to the definition of "emergency situation" in 

Section 117.10. AECT believes such revisions are needed to help ensure that Chapter 117 

requirements do not prevent the new Emergency Response Service (ERS) program from 

working the way it is designed to work, which is to decrease the likelihood of rolling 

black-outs during an ERCOT-declared energy emergency. 

Because AECT has concerns about how the use of term "demand response" has 

been expanded to include non-emergency situations, AECT supports the proposed new 

language in the definition of "emergency situation" that states that the operation of an 

emergency generator is an "emergency situation" if such operation is part of an ERCOT 

m 

I!J.fCFRIC 

.AMJRH:AN' • CenterPoint. fnenru -~ Constellation. . 1M • Entergy. --=' ExelonGenerat1on. . ~ ~ Green Mounta.•n • ~ '-J•Intematlonal Power 

POWIR •:Jr r,~r.,....:-.c:r.""'' o,. ... ~ uu 'o"'u o' •u•n• --Enera:y ~~.;e 

L®NEStat:' 

~ D ~~r~ra nfig*'&G)R relianf~~- ·- ~)Tn-!J! (lxce/Energy· Luminant ......... " :.....;/ anNRGcompany 
ERS program and is in direct response to an instruction by ERCOT during the period of an 

ERCOT emergency notice. 

AECT appreciates the opportunity to submit these comments. Please contact me at 

512 4 7 4-6725 if you have any questions. 

2 

AUSTIN_l\683710v2 

46784-1 12/04/2012 

John Fainter, Jr. 

President and CEO 
BLUE SKY ENVIRONMENTAL LLC 

December 4, 20 12 

Mr. Bruce McAnally 

MC205 

Office of Legal Services 

Texas Commission on Environmental Quality 

P.O. Box 13087 

Austin, TX 78711-3087 

RE: Rule Project Number 20 12-025-117-Al 

Dear Mr. McAnally: 

W-2 

Blue Sky Environmental LLC ("Blue Sky") is submitting these comments as noticed in the Texas 

Register dated November 2, 2012 regarding Texas Commission on Environmental Quality 

("TCEQ") proposed changes to 30 TAC § 101.379 (Chapter 101. General Air Quality Rules; 

Subchapter H. Emissions Banking and Trading; Division 4. Discrete Emission Credit Banking 

and Trading) and 30 TAC § 101 .117 .1 0 (Chapter 117. Control of Air Pollution from Nitrogen 

Compounds; Subchapter A. Definitions). For many years, Blue Sky has worked with EnerNOC, 

Inc., a leading provider of technology-enabled demand response ("DR'') and demand-side 

management solutions, to ensure that engines in Texas are properly permitted under TCEQ air 

regulations for DR use. In 2008, I worked with the TCEQ to obtain the attached letter dated 

January 29, 2008 from Richard Hyde, confirming that 

... if an emergency generator is authorized and operating under Permit by Rule (PBR) 

106.511, that PBR I 06.5 I I does not prohibit the participation of an emergency generator 

in the ERCOT ElLS 1 Program. If the generator is run when directed by ERCOT as part of 

the ElLS declared emergency at Step 3 of their EECP2

, they will not require additional 

authorization, as long as the generator continues to meet all requirements of PBR I 06.51 I. 

including the restrictions for the number of hours the generator will operate. 

1 Emergency Interruptible Load Service 

2 Emergency Electric Curtailment Plan 

P.O. Box 6o3 • Hingham, MA • 02043 

Telephone 61r834-84o8 • Fax 857-22I-9464 
Mr. Bruce McAnally 

TCEQ 

December 4, 20 12 

Page2 

Blue Sky strongly endorses the TCEQ proposal to (I) amend 30 TAC § t 01.379 to update the 

reference in agency rules to reflect the versions of the ERCOT Protocols effective June I, 20 12J 

to be consistent with § 117 .I 0 and (2) amend 30 TAC § t t 7.10 to include in its definition of 

emergency operation of engines for purposes of supplying power for distribution to the electric 

grid since under the Emergency Response Service ("ERS") program, qualified participants may 

provide power back into the electric grid for sale during an ERCOT-declared emergency under 

limited circumstances. The proposed rulemaking will update the definition of emergency in 

§117.10 to ensure consistency with ERCOT's new ERS program. The proposed amendment will 

reference the most recent version of the ERCOT protocols. The proposed amendment will also 

reflect changes made by ERCOT to promote reliability during energy emergencies by allowing 

the operation of generators for purposes of selling power to the electric grid under limited 

circumstances. 

Emergency DR programs, such as the ERS program which has replaced the ElLS, have been 

implemented to prevent brownouts and blackouts. To date, emergency DR programs in Texas 

have been rarely called. Emergency DR programs are truly reserved for severe, emergency 

conditions. Emergency DR programs are more than just turning on emergency diesel generators. 

They also includes curtailment (e.g., companies reducing their HV AC and lighting loads, 

manufacturing facilities shutting off their machines, etc.) to demand from the electric power grid. 

In order to make curtailment attractive to potential customers, often the inclusion of a backup 

generator is required since the curtailment piece alone can be too small. This curtailment results 

in a reduction of air pollutants during emergency DR events. 

Numerous states have formally changed their definition of emergency or otherwise allow the use 

of emergency engines in emergency DR programs under their existing regulations (e.g., to use the 

engines just before lights out rather than waiting for a blackout). In addition to Texas, these states 

include Connecticut, Massachusetts, Vermont, Rhode Island, New Hampshire, Maine, New York, 

Maryland, Pennsylvania, fllinois, Indiana, Ohio, West Virginia, Michigan, Virginia, and Florida. 

The TCEQ has requested comment on whether an ERCOT energy emergency alert ("EEA'') level 

should be specitied in § 117.1 0( l5)(A)(vii). In order to account for emergency DR programs that 

are called by Texas utilities when they are experiencing voltage reductions so they would not be 

classified as an "ERCOT-declared emergency" nor would an ERCOT EEA level be called, it is 

recommended that TCEQ: 

1) Expand the term "ERCOT-declared emergency" to "ERCOT or Utility-declared 

emergency" in §I 01.379(c)(2)(D) and add to the end of§ 117.1 0(15)(A)(vii) .. or for a 

utility declared emergency." 

3 The reference in § 10 1.379(C)(2)(D) for an ERCOT -declared emergency notice was changed to "as defined in 

ERCOT Protocols Section 2: Definitions and Acronyms (June I, 2012) and issued as specified in ERCOT Protocols, 

Section 6: Adjustment Period and Real-Time Operations (June I, 20 12)." 

P.O. Box 6o3 • Hingham, MA • 02043 

Telephone 6r7-834-84o8 • Fax 857-221-9464 
Mr. Bruce McAnally 

TCEQ 

December 4, 20 12 

2) Not specify an ERCOT EEA level in§ ll7.10(15)(A)(vii). 

Page3 

For the past three years, EnerNOC and Blue Sky have been working closely with the United 

States Environmental Protection Agency ("US EPA") regarding how engines participating in DR 

programs should be treated in the National Emission Standards for Hazardous Air Pollutants 

("NESHAP") for Reciprocating Internal Combustion Engines ("RICE") under 40 CFR 63 

Subpart ZZZZ and the New Source Performance Standards ("NSPS") under 40 CFR 60 Subpart 

Illl and JJJJ. In June, EPA published a Notice of Proposed Rulemaking ("NOPR") in the 

Fedeml Register with proposed changes to both the NESHAP and NSPS regarding the use of 

engines in demand response programs. For emergency DR, EPA proposed the declaration of 

EEA Level 2 as per North American Electric Reliability Corpomtion ("NERC") Standard EOP002-3, Capacity and Energy Emergencies (see the proposed changes to 63.6640(t)(2)(ii) in the 

NOPR for the NESHAP and the similar changes to the NSPS). EPA also proposed voltage or 

frequency deviations of 5 percent or greater below standard voltage or frequency (see the 

proposed changes to 63.6640(t)(2)(iii) in the NOPR for the NESHAP and the similar changes to 

the NSPS). Thus, since the owners and operators of emergency engines will need to comply 

with the more conservative state or federal regulations and EPA will expand the emergency DR 

trigger to include voltage or frequency reductions, it is recommended that TCEQ not reference 

an EEA Level and stay with "ERCOT or Utility-declared emergency." 

It is understood that if adopted, amended § 101.379 and § 117.10 will be submitted to the US EPA 

as a revision to the state implementation plan ("SIP"). It is recommended that TCEQ provide 

guidance regarding the SIP process. It is presumed that proposed changes to § 101.379 and 

§ 117.10 will not be fully implemented until the EPA approves the SIP revision. Blue Sky 

assumes that engines participating in the ERS and other utility emergency DR programs without 

sending power to the electric grid can continue to operate under the definition of "emergency 

situation" until the references to the appropriate protocols are changed. However, these 

emergency engines could not send power to the electric grid under an emergency situation until 

the SIP revision is approved. In its response to comments, TCEQ should clarify that these 

assumptions are correcl 

Blue Sky wishes to thank the TCEQ for allowing it to comment on the proposed regulations. 

Sincerely, 

Blue Sky Environmental LLC 

~~Cd1- Donald C. DiCristofaro, CCM 

President 

Attachment 

P.O. Box 6o3 • Hingham, MA • 02043 

Telephone 6t7~834~84o8 • Fax 857~221~9464 
Buddy Garcia, Chairman 

Larry R. Soward, Commissioner 

Bryan W. Shaw, Ph.D., Commissioner 

Glenn SbankJe, Executive Director 

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY 

Protecting Texas by Reducing and Preventing Pollution 

Mr. Don DiCristofaro, CCM 

President 

Blue Sky Environmental LLC 

105 Chestnut Street; Suite 37 

Needham, MA 02492 

January 29,2008 

Subject: Use of Emergency Engines in ERCOT's ElLS Program 

Dear Mr. DiCristofaro: 

Thank you for your December 11, 2007 letter explaining the ERCOT Emergency Interruptible 

Load Service (ElLS) Program. To ensure we fully understood the program, we discussed it with 

Mr. Paul Wattles at ERCOT on January 17, 2008. He confirmed that ERCOT's ElLS was 

developed as an additional step (Step 3) in their Emergency Electric Curtailment Plan (EECP) to 

help stabilize the gird and prevent them from directing rolling blackouts in Step 4. ElLS is 

directed only during a grid emergency. 

After discussing this new information with our legal and rule development staffs, I agree that if 

an emergency generator is authorized and operating under Permit by Rule (PBR) 106.511, that 

PBR 106.511 does not prohibit the participation of an emergency generator in the ERCOT ElLS 

Program. If the generator is run when directed by ERCOT as part of the ElLS declared 

emergency at Step 3 of their EECP, they will be in compliance with the intent ofPBR 106.511 

and the emergency generator will not require additional authorization, as long as the generator 

continues to meet all requirements ofPBR 106.511, including the restrictions for the number of 

hours the generator may operate. Participation in the ElLS program (and direction from 

ERCOT) will not provide emergency generators an excuse to exceed the hours of operation 

requirement (or other requirements) in PBR 106.511. 

Please be advised that this letter in no way authorizes the operation of any specific emergency 

back-up generator engine operating under the authority of PBR 106.511 and that any facility that 

proposes to construct and operate will be subject to all applicable requirements under Chapters 

101, 106 and 117. 

P.O. Box 13087 • Austin, Texas 78711-3087 • 512-239-1000 • Internet address: www.tceq.state.tx.us 

pnaiCO! ..,...,..led...,.......,..,,....., lot 
Mr. Don DiCristofaro, CCM 

Page2 

January 29,2008 

Re: Use of Emergency Engines in ERCOT's Ell..S Program 

Thank you for your cooperation and interest in air pollution control. If you need further 

information or have any questions, please contact Mr. Jim Linville at 512 239-1261 or write to 

the Texas Commission on Environmental Quality, Office of Permitting, Remediation, and 

Registration, Air Permits Division (MC-163), P.O. Box 13087, Austin, Texas 78711-3087. 

Sincerely, 

Richard A Hyde, P.E., Director 

Air Permits Division 

Office of Permitting, Remediation, and Registration 

Texas Commission on Environmental Quality 

RAH/JGI/bis 

cc: Mr. Jay Tonne, Chief Engineer's Office, MC 206 

Mr. Vincent Meiller, Chief Engineer's Office, MC 206 

Booker Harrison, Environmental Law Division, MC 173 

Janis Hudson, Environmental Law Division, MC 173 

Terry Salem, Environmental Law Division, MC 173 

Jim Linville, Air Permits Division, MC 163 

Steve Hagle, Air Permits Division, MC 163 
.... 0 CALPINE CORPORATION 

~. 

~ 

December 5, 2012 

Via Electronic Submittal 

Mr. Ray Schubert 

Texas Commission on Environmental Quality, MC 164 

P.O. Box 13087 

Austin, TX 78711-3087 

RE: Docket Number 2012-0896-RUL 

Dear Mr. Schubert, 

Patrick Blanchard 

Director EHS 

717 Texas Avenue 

Suite 1000 

Houston, TX 77002 

713-830-8717 

W-3 

Calpine appreciates the opportunity to provide comments regarding the exemption for emergency 

generation. Calpine is a major North American power company with a generation capacity of 

over 28,000 megawatts of clean, reliable and fuel-efficient generation serving customers and 

communities in twenty-one states. Calpine's Texas operations include twelve combined cycle 

gas-fired power generation facilities with a generation capacity of approximately 8,000 MW, 

representing approximately ten percent of the state's installed capacity. 

Reliability of the electric grid, which is governed by the Public Utility Commission (PUCT) rules 

and managed by the Electric Reliability Council of Texas (ERCOT), is vital to public health and 

the Texas economy, and is one of the chief drivers of Calpine's operations. However, Calpine 

believes that the rule as proposed will have serious unintended consequences, and may be 

counterproductive for both air quality and electric reliability. This is due to the proposal's 

implicit shift in policy from allowing non-commercial backup generation to avoid additional 

control requirements to allowing facilities operated on a commercial basis to avoid installing 

controls required for NOx sources. 

As a result, the rule would offer a financial incentive to install lower-performing diesel engines or 

to run existing engines more frequently. The effect of these increases does not appear to have 

been calculated, but such increases are likely to make compliance with the new 75ppb ozone 

standard more difficult and costly for the nonattainment regions. Such a change is unnecessary, 

and will put clean generation at a cost disadvantage to this smaller, poorly controlled generation 

capacity. 

Calpine therefore recommends that the rule proposal be changed to remove the exemption 

afforded to ERS participants and require that all commercial generation be required to meet 

BACT and RACT. 
Mr. Ray Schubert 

Page2 

December 5, 2012 

The Proposed Change Will Have Significant Unintended Consequences for Air Quality 

The proposed rule change will have the effect of providing a substantial financial incentive for the 

installation or repurposing of high-emitting diesel generation, and will expand the amount of such 

generation capacity installed. The proposal would exempt participants in ERCOT' s Emergency 

Response Service (ERS) from the requirement to install additional pollution controls. While this 

seems a harmless change needed to ensure reliability, it will have far-reaching effects due to the 

significant differences between the ERS and its predecessor program, the Emergency Interruptible 

Load Service (ElLS) program. 

Existing TCEQ rules provide an exemption to units participating in ElLS conditioned on a 

prohibition of electricity being exported to the grid. This prohibition ensures that participation 

does not result in commercial benefit and advantage from the exemption. Thus, the ElLS 

program in conjunction with TCEQ rules provided an incentive for large electricity consumers to 

reduce consumption from the grid during ERCOT declared emergencies. Entities selling power 

on a commercial basis required by rule to meet the terms of their permits (i.e., BACT or LAER), 

as well as RACT and the requirements of Chapter 117. 

In 2012 the PUCT enacted rules significantly expanding the ElLS program and rebranded it as 

Emergency Response Service (ERS). Under the ERS program, engine owners and aggregators 

receive for-profit payments for electric generation capacity committed to be available for export 

to the grid during a reliability event. The ERS program differs from the predecessor ElLS 

program in three significant ways that will result in the expansion in use of diesel generation and 

resultant emissions. 

First, participants in ERS are not prohibited from exporting electricity. This means that entities 

installing or already having diesel generation are able to sell the electricity produced on the open 

market. This is most likely to occur on days when wholesale prices for energy at their highest 

permissible value. These days are most commonly hot, sunny summer days, typically the worst 

days from an air quality standpoint. As a result, participants would receive significant economic 

incentives to operate the highest-emitting equipment in the state on the days when air quality is 

the worst. These are the days when the best action would be to implement energy conservation 

measures as contemplated in the ElLS program. 

Second, the threshold for participation in the ERS program has been lowered to 0.1 megawatt 

from the 1.0 megawatt threshold required under ElLS. This creates a new financial incentive to 

repurpose existing generators as an ERS asset, particularly when repurposing doesn't require 

installation of emissions controls. 

Finally, the ElLS program limited participation to 1,000 MW within the ERCOT system. This 

limit has been eliminated under the ERS program in an apparent effort to expand participation in 
Mr. Ray Schubert 

Page3 

December 5, 2012 

the program. The growth in the program will likely come from new or repurposed diesel 

generation. 

In sum, the ERS program will result in a significant expansion of the use of diesel-fired engines 

for purposes of electric generation. The exemption from air quality requirements will therefore 

have more significant effects than are apparent at this time. With the 1,000 MW cap removed, 

and a significant financial incentive added, emissions from diesel fired generation units will 

increase well beyond current levels. 

The likelihood of expanded use of diesel generation is not merely speculative. The experience of 

other jurisdictions that have adopted similar open programs is instructive. The commercial 

opportunities created by reduced environmental controls and financial incentives have created a 

new industry of marketers offering to install poorly controlled diesel generation at plants in return 

for a share of the revenues produced. (See Attachment 1 ). 

Thus, the proposed rule in conjunction with ERCOT' s change to the ElLS program, will have the 

effect of providing a powerful incentive to run high-emitting diesel generation to the detriment of 

air quality. 

Disincentive to investment in new low emitting generation 

By exempting diesel-fired generation capacity operating on a commercial basis from air quality 

standards, the proposed rule sets clean generating resources at a disadvantage. The cleaner 

sources are designed and operated so as to provide emission reductions throughout the year, not 

just when ERS resources are dispatched. In organized competitive markets, the market would 

simply procure other resources instead of diesel engines that have not had to internalize the costs 

of emissions controls. New combined cycle power plants will operate more reliably than the 

existing marginal resources they would displace and provide many reliability-related services that 

limited ERS resources do not. Accordingly, there is no reliability-related rationale for TCEQ to 

favor of diesel-based generation and exempt ERS participants from emissions controls, when the 

other sources of electricity supply against which they are competing must install emissions 

controls and price the associated costs into their projects. 

This is consistent with the most recent Capacity Demand Reserve (CDR) report issued by 

ERCOT. ERCOT, perhaps in response to recently adopted rules, has modified the forecast for 

reserve margins to indicate that the agency does not anticipate a shortage in the near term. This 

means that the harm likely to accrue to air quality from the exemption is unlikely to be offset by 

the benefit of additional reliability. 
Mr. Ray Schubert 

Page4 

December 5, 2012 

Unnecessary Subsidy: 

The ERS program, in which engine owners and aggregators receive capacity payments, is a forprofit activity. Diesel engines participation requires little capital investment - especially 

compared with what it takes to build other forms of new generation. 

ERCOTs procurement process compensates participants on an "as bid" basis. This means 

participants have the ability to recoup the costs of complying with existing the air quality rules 

now applicable to generators and still recognize a commercial profit through the ERCOTs 

procurement process. The Proposed Rule subsidizes the most polluting generating resources with 

no attendant benefits in terms of air quality or electricity reliability. Calpine's view is very 

simple: If a ERS unit is compensated for providing reliability and generation to ERCOT, it should 

be required to install emissions controls and no exemption should be provided by from the TCEQ 

For the foregoing reasons, Calpine is requesting that the current definition of Emergency 

Condition not be modified to accommodate ERCOTs expanded ERS program. A blanket 

exemption will expand the number of high emitting diesel engines; will be a disincentive to 

investment in new low emitting generation; and is an unnecessary subsidy to high emitting 

sources. 

Calpine appreciates the Texas Commission on Environmental Quality's continued leadership in 

interagency coordination to ensure the public interest is served when conditions threating grid 

reliability arise. We look forward to continued work with the TCEQ on the development and 

implementation of measures that will improve our regional air quality while ensuring the 

reliability of the ERCOT system. If you have any questions regarding these comments, please 

contact me directly at 713/830-8717. 

Sincerely, 

Calpine Corporation 

Patrick Blanchard 

Director, Environmental Services Texas 

Attachment 
Mr. Ray Schubert 

Page 5 

December 5, 2012 

Attachment 1 
(I) ENERNOC I DemandS A T 

Generate New Payments 

for Vour Business 

ugh EnerN C and e and span 

If your business has a generator set, you may qualify for a simple and lucrative opportunity 

to be paid to run your generator. Demand response programs pay businesses to switch to 

on-site generation when the electrical grid experiences spikes in demand or shortages of 

supply, typically for just a few hours per year. Demand response participants earn substantial 

payments, increase the reliability ofthe electrical grid, and get advanced notice of irregular 

conditions on the grid. 

By enrolling in demand response with EnerNOC, you will join the world's largest "virtual 

power plant," a network of more than 10,000 energy users worldwide. You will also enjoy a 

range of benef1ts. 

EMERGENCY PREPAREDNESS 

What would you do if you knew there would be a blackout in two 

hours7 Demand response participation gives you advance notice 

of any irregular conditions on the grid and helps ensure your 

readiness for a true grid emergency. By testing your generators 

regularly and under load, your business will be conf1dent that 

your backup system will perform during a real emergency .. 

© 2011 EnerNOC, Inc. 

FINANCIAL REWARDS FROM DAV ONE 

Unlike capital-intensive energy management programs that 

don't deliver results until years later, demand response starts 

creating a bottom-line impact immediately. Our demand 

response customers have earned millions of dollars of payments 

-revenue they've reinvested into their operations to maintain 

equipment and pursue important upgrades of transfer switches 

and other equipment. Participating in demand response will 

deliver dependable, regular payments that you can count on. 

EASV ENABLEMENT 

EnerNOC's engineers work directly with your facilities and 

engineering staff to determine your eligibility for a variety of 
~ENERNOC I DemandS AR 

demand response programs. There is absolutely no cost to 

enroll. EnerNOC provides no-cost site evaluations, free energy 

meters, and free installation. EnerNOC's staff members are 

also experts in relevant permitting and regulations governing 

generators. We handle any and all paperwork associated with 

permit compliance and take care of the details so you can stay 

focused on running your business. 

REIMBURSEMENT FOR GENERATOR TESTING 

Many businesses must periodically test their generators to 

meet local regulations and standards. By running your backup 

generators during demand response testing and dispatches, 

you can ensure that your generators are operating correctly 

under load while simultaneously complying with mandated 

testing. In effect, EnerNOC pays your business for what would 

otherwise be an unavoidable expense. 

IMPROVING EFFICIENCY THE OPTION OF EASY AUTOMATED CONTROL 

EnerNOC gives every customer access to real-time meter For increased ease of use, EnerNOC can also enable your 

data through our web-based energy management software. generators to start up automatically during a demand response 

For many of our customers, this becomes an invaluable tool dispatch. This step is entirely optional, but some customers 

for maximizing demand response payments and identifying appreciate the end-to-end ease of automation. Our engineers 

energy efficiency opportunities. Our customers have uncovered can install relays and controls that monitor your generators 

hundreds of thousands of dollars in annual savings through our during start up. Once the generator is prepared, we transfer 

DemandSMART application. the load to your generator, right from our Network Operations 

Demand SMART is the industry's most comprehensive 

demand response solution. DemandSMART's web-based 

tools present real-time energy usage data in intuitive 

dashboards that help customers maximize their demand 

response payments and uncover anomalies in energy use. 

EnerNOC's skilled engineers also help participants make 

the most of their participation during the enrollment and 

enablement process to ensure that they are capturing the 

maximum benefit from demand response. 

© 2011 EnerNOC, Inc. 

Center. When the dispatch is complete, we transfer you back to 

street power without any interruption to your business. 

Want More Information? 

To fmd out how your business can benef1t from 

demand response today, please visit 

www.enernoc.com/get-started. 
W-4 

RULE PROJECT NO. 2012-025-117-AI 

PROPOSED REVISIONS TO 

30 TAC § 117.10 AND 

§ 

§ 

§ 

TEXAS COMMISSION ON 

30 TAC § 110.379 ENVIRONMENTAL QUALITY 

ELECTRIC RELIABILITY COUNCIL OF TEXAS, INC.'S INITIAL COMMENTS 

REGARDING PROPOSED REVISIONS TO SECTIONS 117.10 AND 101.379 

The Electric Reliability Council of Texas, Inc. ("ERCOT") respectfully submits these 

comments to the amendments to sections 117.10 and 101.379 proposed by the Texas 

Commission on Environmental Quality (TCEQ) in the above-styled project. ERCOT appreciates 

the TCEQ's efforts to address a potential obstacle to the participation of certain generators in 

ERCOT's Emergency Response Service (ERS) program. The TCEQ has accurately recognized 

the critical role ERS plays in ensuring the reliability of the ERCOT system, and the proposed 

rule amendments provide helpful clarifications regarding the obligations of generators that 

participate in this service. While ERCOT generally supports the proposed rule amendments, it 

offers two additional changes that may help further clarify these obligations. 

COMMENTS 

I. The TCEQ should consider conditioning the proposed exceptions in sections 

117.10(15)(A)(ii) and 101.379(c)(2)(D) on ERCOT's dispatch ofERS rather than on 

ERCOT's issuance of an emergency notice, as proposed. 

Both the current and proposed versions of sections 117.10 and 101.379 premise their 

exemptions from relevant operating restrictions on ERCOT' s issuance of an emergency notice. 

As contemplated by the ERCOT Protocols, an emergency notice is the fourth of four possible 

reliability-related warnings preceding the declaration of an energy emergency alert (EEA). See 

ERCOT Nodal Protocols § 6.5.9.3.4. An emergency notice declaration does not explicitly 

authorize ERCOT' s use of any particular reliability measure. Upon declaration of an EEA, 

however, ERCOT may initiate any of a number of special measures to ensure system 

reliability-including deployment of ERS-depending on the severity of the generation shortage 

1 
or other system condition. See ERCOT Nodal Protocols § 6.5.9.4.2. Given sufficient time, 

ERCOT would always prefer to issue an emergency notice before declaring an EEA. In practice, 

however, ERCOT is not always able to issue an emergency notice (or other less serious 

warnings) because system conditions may deteriorate too rapidly. For example, during the cold 

weather event of February 2, 2011, ERCOT issued a watch (the step preceding an emergency 

notice), but did not have time to issue an emergency notice before unexpected unit outages 

required the declaration of an EEA and the subsequent deployment ofERS. 

Because the issuance of an emergency notice may not always be possible before it 

becomes necessary to deploy ERS, generators subject to TCEQ operation limitations would not 

necessarily be deemed to fall within the emergency situation exception when operating as part of 

ERS during an ERCOT system emergency. ERCOT therefore suggests that the TCEQ consider 

amending the definition of "emergency situation" to refer to the deployment of ERS rather than 

the issuance of an emergency notice, as this would provide affected generators the assurance that 

operation for ERS purposes is always permissible. 

ERCOT does not believe that this change would expand the circumstances in which an 

ERS generator subject to TCEQ restrictions could operate. To the contrary, it would place an 

even more restrictive-and reasonable-limitation on operation. In particular, generators would 

no longer be exempted from operating restrictions during any period following an emergency 

notice but preceding an ERS deployment. 

ERCOT understands that the TCEQ may have some concern about conditioning the 

definition of "emergency situation" on ERCOT' s deployment of ERS without requiring certainty 

as to the circumstances in which ERS would be deployed. To address this concern, the TCEQ 

could choose-as it has under both the current and proposed rule language-to refer to a 

particular version of the Protocols defining ERS and restricting the deployment of the service. 

2 
But since the Protocols are constantly changing (they have been revised hundreds of times), 

ERCOT is concerned that even immaterial changes to the indicated sections could create 

confusion as to the ongoing applicability of the TCEQ's exemption. ERCOT therefore 

recommends that the TCEQ consider referencing a more constant standard-namely, the Public 

Utility Commission's ERS rule. See 16 Tex. Admin. Code § 25.507. That rule places time 

limits and other constraints on ERCOT' s deployment of ERS which the ERCOT Protocols must 

observe. While the rule was recently amended to allow generation to participate in this service, 

ERCOT does not expect this rule to be changed again anytime soon. Even if the Public Utility 

Commission did opt to amend the rule on occasion, ERCOT expects that the TCEQ could more 

easily monitor those infrequent changes than track the numerous ongoing proposals to revise the 

Protocols. 

II. The TCEQ should consider removing the proposed exception in 117.10(15)(A)(vii) 

and linking the operation exception explicitly stated in section 117.10(15)(B)(ii) to 

the ERS exception in section 117.10(15)(A)(ii). 

As proposed, rule 117.10 would remove from the definition of "emergency situation" any 

hours within the duration of an ERCOT -declared emergency notice. Irrespective of the whether 

the TCEQ may accept ERCOT' s first recommendation above, ERCOT understands that the 

purpose of the exemption in section 117.1 0(15)(A)(ii) is to exempt any hours of generator 

operation attributable to compliance with a valid ERS dispatch instruction. If that understanding 

is correct, ERCOT submits that the operation of a generator for ERS purposes would always fall 

within the coverage of section 117.10(15)(A)(ii), and that creating an additional exemption for 

the operation of ERS generators in section 117.1 0(15)(A)(vii) is therefore unnecessary. If the 

TCEQ agrees with this reasoning, ERCOT would further suggest changing section 

117.10(15)(B)(ii) to reference section 117.10(15)(A)(ii) instead of section 117.10(15)(A)(vii), as 

proposed. 

3 
PROPOSED REVISIONS 

Based on the preceding comments, ERCOT recommends the following revisions to the 

TCEQ's proposed rule amendments. For clarity, ERCOT's proposed additions and deletions are 

shown in redline. 

30 TAC §117.10 

(15)Emergency situation--As follows. 

(A)An emergency situation is any of the following: 

(i)an unforeseen electrical power failure from the serving electric power generating system; 

(ii)the-£!:!!Y.Period of time during which that an the Electric Reliability Council of Texas, Inc. 

(ERCOT) issued has dispatched emergency response service as authorized by Title 16, Section 

25.507 of this codeemergency notice (as defined in ERGOTProtecols. Section 2: Dqfinitions t:md 

Acron}'ms (June 1, 2012) and issued as specified in ERGOT Protocols, Section 6: Adjustment 

Period t:md Real Time Operations (June l, 2012))[, as defined in ERGOT Protocols, Section 2: 

Definitions and Acronyms (l .... pril 25, 2006), issued by the Electric Reliability Council of Texas, 

Inc. (ERGOT) as specified in ERGOT Protocols, Section 5: Dispatch (April 26, 2006),] IS 

applicable to the serving electric power generating system. The emergency situation is 

considered to end upon expiration of the emergency notice issued by ER{.;OT; 

(iii)an unforeseen failure of on-site electrical transmission equipment (e.g., a transformer); 

(iv)an unforeseen failure of natural gas service; 

( v )an unforeseen flood or fire, or a life-threatening situation; [ eF] 

(vi)operation of emergency generators for Federal Aviation Administration licensed airports, 

military airports, or manned space flight control centers for the purposes of providing power in 

anticipation of a power failure due to severe storm activity; or[:] 

(vii) operation of an emergency generator as part of an ERGOT emergency response program 

if the operation is in direct response to an instruction by ER{.;OT during the period of an ER{.;OT 

emergency notice as specified in clause (ii) of this subparagraph. 

(B)An emergency situation does not include~ [ operation for purposes of supplying power for 

distribution to the electric grid, operation for training purposes, or other foreseeable events.] 

(i)operation for training purposes or other foreseeable events; or 

(ii)operation for purposes of supplying power for distribution to the electric grid, except as 

specified inauthorized by subparagraph (A)(:v:ii) of this paragraph. 

30 TAC §101.379(c)(2)(D) 

If the DEC-2 Forms are submitted in response to an ERCOT-declared emergency situation, the 

request will not be subject to the flow control limit and may be approved provided all other 

requirements are met. For the purposes of this subparagraph, an ERCOT-declared emergency 

situation is defined as the--.f!!!Lperiod of time during which that an ERCOT has dispatched 

emergency response service as authorized by Title 16, Section 25.507 of this code issued 

emergency notice (as defined in ER{?OT Protocols, Section 2: Definitions and Acronyms (June 

1, 2012) and issued as specified in ER{?OT Protocols, Section 6: Adjustment Period and Real 

Time Operations (June 1, 2012))[, as defined in ERGOT Protocols, Section 2: Definitions and 

4 
Acronyms (April 25, 2006), issued by ER{;OT as specified in ERGOT Protocols, Section 5: 

Dispatch (i\:pril 26, 2006),] is applicable to the serving electric pmver generating system. The 

emergency situation is considered to end upon eJ<piration of the emergency notice issued by 

ERGOT. 

CONCLUSION 

ERCOT appreciates the TCEQ's efforts to clarify these important rules and respectfully 

requests consideration of these comments. ERCOT would be pleased to provide any additional 

information the TCEQ may find helpful in revising its rules. 

Respectfully submitted, 

By: Is/ Nathan Bigbee 

Chad V. Seely 

Assistant General Counsel 

(512) 225-7035 (Phone) 

(512) 225-7079 (Fax) 

cseely@ercot.com 

Nathan Bigbee 

Corporate Counsel 

(512) 225-7035 (Phone) 

(512) 225-7079 (Fax) 

nbigbee@ercot.com 

ERCOT 

7620 Metro Center Drive 

Austin, Texas 78744 

ATTORNEY FOR ELECTRIC RELIABILITY 

COUNCIL OF TEXAS, INC. 

5 
(j)ENERNOC 

December 4, 2012 

Mr. Bruce McAnally 

MC205 

Office of Legal Services 

EnerNOC, Inc 

101 Federal Street 

Suite 1100 

Boston, MA 02110 

Texas Commission on Environmental Quality 

P.O. Box 13087 

Austin, TX 78711-3087 

RE: Rule Project Number 2012-025-117-AI 

Dear Mr. McAnally: 

I Tel: 617 224 9900 

I 

Fax: 617 224 9910 

www .enernoccom 

info@enernoc.com 

W-5 

EnerNOC, Inc. ("EnerNOC") is pleased to provide these comments regarding the Texas 

Commission on Environmental Quality ("TCEQ") proposed changes to 30 TAC §101.379 

(Chapter 101. General Air Quality Rules; Subchapter H. Emissions Banking and Trading; 

Division 4. Discrete Emission Credit Banking and Trading) and 30 TAC §1 01.117.10 

(Chapter 117. Control of Air Pollution from Nitrogen Compounds; Subchapter A 

Definitions) as noticed in the Texas Register on November 2, 2012. EnerNOC is a leading 

provider of technology-enabled demand response ("DR") and demand-side management 

solutions for the commercial, institutional, and industrial markets, with over 8,500 

megawatts ("MW") of proven DR resources under management at approximately 13,500 

sites. 

EnerNOC strongly supports the Proposed Amendments to 30 TAC §101.379 and 

§101.117.10 

For many years, EnerNOC has been enrolling sites (either by use of emergency backup 

generators, curtailment, or both) in the Electric Reliability Council of Texas, Inc. ("ERGOT") 

Emergency Interruptible Load Service ("ElLS") program. The ElLS was called just before 

the electric grid was about to fail. The ElLS was integrated into ERGOT's Electrical 

Emergency Curtailment Plan ("EECP") and was called during a Stage 3 emergency (e.g., 

when everything else has been tried and the next step was rolling blackouts). Thus, ElLS 

was used to prevent blackouts by using emergency generators to power facilities, lessening 

the need for power from the grid. The ElLS Program was designed for a maximum of six 

dispatches per year and a maximum of 24 hours per year. On March 22, 2012, the Public 

Utility Commission of Texas ("PUCT") replaced the ElLS with the Emergency Response 

Service ("ERS") program. Like the ElLS program, the new ERS program is designed to 

help decrease the likelihood of requiring firm load shedding (e.g., rolling blackouts) during 

an ERGOT -declared energy emergency by decreasing the power demand on the electrical 

grid. The new ERS program became effective on June 1, 2012. 
(j)ENERNOC EnerNOC, Inc 

101 Federal Street 

Suite 1100 

Boston, MA 02110 

Tel: 617 224 9900 

Fax: 617 224 9910 

www .enernoc.com 

info@enernoc.com 

EnerNOC strongly supports the TCEQ proposal to (1) amend 30 TAG §1 01.379 to update 

the reference in agency rules to reflect the versions of the ERGOT Protocols effective June 

1, 20121 to be consistent with §117.10 and (2) amend 30 TAG §117.10 to include in its 

definition of emergency operation of engines for purposes of supplying power for 

distribution to the electric grid since under the ERS program, qualified participants may 

provide power back into the electric grid for sale during an ERGOT -declared emergency 

under limited circumstances. The proposed rulemaking will update the definition of 

emergency in §117.10 to ensure consistency with ERGOT's new ERS program. The 

proposed amendment will reference the most recent version of the ERGOT protocols. The 

proposed amendment will also reflect changes made by ERGOT to promote reliability 

during energy emergencies by allowing the operation of generators for purposes of selling 

power to the electric grid under limited circumstances. As noted in the proposed rule, "the 

rulemaking benefits the public by potentially decreasing the likelihood of requiring firm load 

shedding (i.e., rolling blackouts) when additional control measures are needed to achieve 

or maintain attainment of the federal air quality standards through the use of electric 

generators." Furthermore, "[t]he proposed rulemaking would not increase emissions of air 

pollutants ... " 

Numerous states allow the use of backup emergency generators to participate in 

emergency demand response programs like the new ERS program (e.g., to use the 

engines just before lights out rather than waiting for a blackout). These states include 

Connecticut, Massachusetts, Vermont, Rhode Island, New Hampshire, Maine, New York, 

Maryland, Pennsylvania, Illinois, Texas, Michigan, West Virginia, Ohio, Virginia, Indiana, 

and Florida. 

Why is this so important? 

Allowing emergency engines to operate when there is an imminent threat of a power 

outage is important because these resources have the potential to prevent power failures, 

which are expensive, dangerous to health and safety, and detrimental to the environment. 

As detailed below, independent system operators call upon emergency DR as a last resort 

before implementing rotating outages ("black outs"). Black outs cost money to the 

economy through food spoilage, loss of manufacturing production, loss of wages and 

sales. Blackouts can pose threats to health and safety through loss of heating or airconditioning, interruptions of medical equipment and loss of traffic signals. These threats 

are relatively well known and acknowledged. 

What is less well-known is that it can be better for the environment to use a selected set of 

generators to prevent blackouts than to let the blackouts occur. When. the grid fails or 

1 The reference in § 10 L379(C)(2)(D) for an ERCOT -declared emergency notice was changed to "as defined in ERCOT 

Protocols Section 2: Definitions and Acronyms (June 1, 2012) and issued as specified in ERCOT Protocols, Section 6: 

Adjustment Period and Real-Time Operations (June 1, 2012)." 
(j)ENERNOC EnerNOC, Inc 

101 Federal Street 

Suite 1100 

Boston, MA 02110 

I Tel: 617 224 9900 

Fax: 617 224 9910 

I 

www.enernoc.com 

info@enernoc.com 

rotating blackouts are implemented, every emergency generator that has an automatic 

transfer switch fires up, and others that do not automatically start up are manually started 

by their owners/operators. It can take hours, sometimes days, to restore conditions to 

normal operating levels, so these emergency generators will likely run for extended 

periods of time after a power failure. In addition, blackouts can cause failures at mission 

critical environmental facilities such as wastewater treatment plants. For instance, during 

the August 2003 blackout and more recently during Hurricane Sandy, many millions of 

gallons of untreated sewage were dumped into rivers in New York, Maryland, and New 

Jersey because of the power failure. 

DR plays an important role in stabilizing the electric system in these worst-case scenarios. 

The alternative, requiring new, greenfield power plants to be built for operation a few hours 

every few years does not make economic or environmental sense. 

The following is a discussion of three emergency DR programs in the United States that 

EnerNOC participates in that shows that these programs are rarely dispatched and then 

only in truly emergency situations. Therefore the proposed changes in 30 TAC §1 01.379 

and §101.117.1 0 will not result in significant additional operation of emergency generators. 

ElLS Program (now called ERS Program) 

The ElLS Program was designed for a maximum of six dispatches per year 

and a maximum of 24 hours per year. There were only two emergency DR 

events under the ElLS Program since its inception in 2008. On one event on 

February 2nd, 2011, when there was a massive failure of wholesale 

generators during an unexpected cold snap, the ElLS resources were 

dispatched for a continuous 28 hours. 

PJM Emergency Load Response Program ("ELRP") 

The entity that controls the electric grid in the mid Atlantic states from New 

Jersey south to Virginia and west to portions of Illinois, including portions of 

Ohio, is PJM Interconnection, LLC ("PJM"). PJM has implemented the ELRP 

as its last panic button to be used to prevent brownouts and blackouts. 

The ELRP exists in order to prevent brownouts and blackouts. Numerous 

states in the PJM territory (listed above) now allow emergency engines to 

participate during such times, principally because studies prove that it is 

better to prevent a blackout by using a subset of emergency generators for a 

short period of time as opposed to losing the grid, which would mean all 

emergency generators in the affected area operating for many hours or 

possibly days. The engines enrolled in the program are turned on when PJM 

declares an emergency under the PJM rules, thereby reducing the need for 

power on the grid. 
(j)ENERNOC EnerNOC, Inc 

101 Federal Street 

Suite 1100 

Boston, MA 02110 

I

I Tel: 617 224 9900 

Fax: 617 224 9910 

I 

www.enernoccom 

info@enernoccom 

The ELRP is activated according to the procedures in the PJM Manual 13 

Emergency Operations for a PJM Declared Emergency. A "PJM Declared 

Emergency" means a condition that exists when PJM notifies electric 

distributors that an emergency exists, or may occur, and it is necessary to 

implement the procedures in the Manual 13 Emergency Operations. The 

ELRP has rarely been declared - it is truly reserved for emergency 

situations. This declaration should not be confused with other PJM 

programs that are dispatched for economic reasons such as economic 

demand response or "peak shaving." 

A summary of the ELRP events and hours by year follows: 

Year Events Duration 

(Hours) 

2003 0 0 

2004 0 0 

2005 July 27 4 

August 4 3 

2006 August 2 4 

August 3 5 

2007 August 8 4-5 

2008 0 0 

2009 0 0 

2010 May26 2.7 

June 11 4.2 

July 7 4-5.5 

August 11 6 

September 23 5.5-6 

September 24 6 

2011 May26 2 

May31 2 

July 22 5-6 

2012 July 17 4 

July 18 2 

The ELRP is more than just turning on emergency diesel generators. It also 

includes curtailment (e.g., companies reducing their HVAC and lighting 

loads, manufacturing facilities shutting off their machines, etc.) to reduce 

demand from the electric power grid. This curtailment results in a reduction 

of air pollutants during DR events. 
(j)ENERNOC EnerNOC, Inc 

101 Federal Street 

Suite 1100 

Boston, MA 02110 

Tel: 617 224 9900 

Fax: 617 224 9910 

www .enernoc.com 

1 info@enernoc.com 

ISO New England Emergency Demand Response 

Program 

Since the DR Program was initiated by the New England Independent System 

Operator ("ISO-NE") in 2002, there have only been three days when 

emergency DR events with backup generators have been triggered and only 

one of those times included all of New England: 

1) August 15, 2003; the day after the major Northeast blackout 

(Connecticut only); 

2) July 27, 2005; record electric power demands in all of New 

England were set (Connecticut only); and 

3) August 2, 2006; record electric power demands in all of New 

England were set. 

Emergency DR is the start of brownouts with the next step being involuntary 

interruptions of load. This declaration is taken very seriously by ISO-NE. 

This action is truly reserved for emergency situations. 

A report prepared by Synapse Energy Economics, Inc. for the EPA entitled 

"Results of Demand Response Emissions Modeling" by Geoff Keith, Bruce 

Biewald, David White and Mike Drunsic dated August, 2003 and revised 

September 4, 2003, assesses the impacts of DR and energy efficiency 

programs in New England using an electric system dispatch model.2 As the 

report states, "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." Even assuming all DR is from diesel-fired generators, the report 

showed a net benefit in air quality. As noted in the Synapse report, "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 

2 A hypothetical near-term year in New England using projected 2006 fuel prices and loads was modeled. 

The modeling included 500 MW of DR capability: 60 percent load response and 40 percent generation. The 

emissions impacts when DR is used for reserves results in significant decreases of criteria pollutant 

emissions, even when it is assumed that the DR used to meet reserves is all diesel (e.g., summer air impacts 

include: NOx decreases 23 tons, sulfur dioxide decreases 216 tons, carbon dioxide decreases 31 ,400 tons, 

particulate matter 2.5 microns or less decreases 12.5 tons, particulate matter decreases 21.2 tons and 

mercury decreases 0.29 tons). 
(f)ENERNOC EnerNOC, Inc 

101 Federal Street 

SuitellOO 

Boston, MA 02110 

' Tel: 617 224 9900 

Fax: 617 224 9910 

www.enernoccom 

1 info@enernoccom 

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." 

While this report does not cover Texas, it does show that demand response 

using diesel generators can provide environmental benefits. 

Additional Comments 

The TCEQ has requested comment on whether an ERGOT energy emergency alert 

("EEA") level should be specified in § 117.1 0( 15)(A)(vii). In order to account for 

emergency DR programs that are called by Texas utilities when they are 

experiencing voltage reductions so they would not be classified as an "ERGOTdeclared emergency" nor would an ERGOT EEA level be called, it is recommended 

that TCEQ: 

1) Expand the term "ERGOT -declared emergency" to "ERGOT or Utility-declared 

emergency" in §1 01.379(c)(2)(D) and add to the end of §117.1 0(15)(A)(vii) "or for 

a utility declared emergency." 

2) Not specify an ERGOT EEA level in § 117.1 0( 15)(A)(vii). 

For the past three years, EnerNOC has been working closely with the United States 

Environmental Protection Agency ("US EPA") regarding how engines participating 

in demand response programs should be treated in the National Emission 

Standards for Hazardous Air Pollutants ("NESHAP") for Reciprocating Internal 

Combustion Engines ("RICE") under 40 CFR 63 Subpart ZZZZ and the New Source 

Performance Standards ("NSPS") under 40 CFR 60 Subpart II II and JJJJ. In June, 

EPA published a Notice of Proposed Rulemaking ("NOPR") in the Federal Register 

with proposed changes to both the NESHAP and NSPS regarding the use of 

engines in demand response programs. For emergency DR, EPA proposed the 

declaration of EEA Level 2 as per North American Electric Reliability Corporation 

("NERC") Standard EOP-002-3, Capacity and Energy Emergencies. EPA also 

proposed voltage or frequency deviations of 5 percent or greater below standard 

voltage or frequency. Thus, since the owners and operators of emergency engines 

will need to comply with the more conservative state or federal regulations, it is 

recommended that TCEQ not reference an EEA Level and stay with "ERGOT or 

Utility-declared emergency." 

It is understood that if adopted, amended §101.379 and §117.10 will be submitted 

to the US EPA as a revision to the state implementation plan ("SIP"). It is 

recommended that TCEQ provide guidance regarding the SIP process. It is 

presumed that proposed changes to §1 01.379 and §117.1 0 will not be fully 

implemented until the EPA approves the SIP revision. EnerNOC assumes that 

engines participating in the ERS and other utility sponsored emergency DR 
(j)ENERNOC EnerNOC, Inc 

101 Federal Street 

Suite 1100 

Boston, MA 02110 

Tel: 617 224 9900 

Fax: 617 224 9910 

www .enernoc.com 

info@enernoc.com 

programs without sending power to the electric grid can continue to operate under 

the definition of "emergency situation" until the references to the appropriate 

protocols are changed. However, these emergency engines could not send power 

to the electric grid under an emergency situation until the SIP revision is approved. 

In its response to comments, TCEQ should clarify that these assumptions are 

correct. 

Thank you for providing EnerNOC with an opportunity to comment on the proposed 

modification to these very important regulations. If you have questions or require 

additional information please do not hesitate to contact me at 415-517-1861 or at 

rcounihan@enernoc.com. 

Sincerely, 

Richard H. Counihan 

Vice-President Government Affairs 
Nit r 

-· 

December 6, 2012 

Via Electronic Submission 

Bruce McAnally 

Office of Legal Services 

Texas Commission on Environmental Quality, MC 205 

P.O. Box 13087 

Austin, TX 78711-3087 

RE: Rule Project Number 2012-025-117-AI 

Dear Mr. McAnally: 

WHI!amA. S<:ott Vi~;o Pi'P~idcrnt 

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W-6 

Exelon Corporation ("Exelon") respectfully submits these comments on the proposed 

amendments to 30 T AC Chapter 117, Control of Air Pollution from Nitrogen Compounds, 

Subchapter A, Definitions, Section 117.10; proposed amendments to Chapter 101, General 

Air Quality Rules, Subchapter H, Emissions Banking and Trading, Division 4, Discrete 

Emission Credit Banking and Trading, Section 101.379; and corresponding revisions to the 

state implementation plan ("Proposed Amendments"). 

Exelon is among the largest gas and electric utilities in the nation with operations and 

business activities in 47 states. Through its subsidiary, Exelon Generation, Inc., Exelon owns 

a diverse fleet of more than 35,000 megawatts of generation capacity comprising nuclear, 

fossil, hydroelectric and renewable generation resources. Exelon's Texas operations include 

18 facilities with a generation capacity of approximately 4,200 MW. 

The current TCEQ rules exempt certain units participating in the Electric Reliability Council 

of Texas (ERCOT) Emergency Interruptible Load Service (ElLS) program from pollution 

control requirements as long as the participant does not provide power back to the electrical 

grid. This condition ensures that participants in the program do not commercially benefit 

from the exemption. In March 2012, the Public Utility Commission of Texas (PUCT) 

replaced the ElLS program with the Emergency Response Service (ERS) program. The new 

ERS program allows qualified participants to provide power back to the grid for sale during 

an ERCOT-declared emergency. The Proposed Amendments now seek to eliminate the 

prohibition on selling power back to the grid in order to qualify for the exemption under 

TCEQ's air rules. 
Page 2 

The new ERS program will result in a significant expansion of diesel generation. Exempting 

these units from pollution control requirements will provide a financial incentive for 

uncontrolled generation. The Proposed Amendments would encourage backup, on-site 

emergency generators to participate in power markets purely for economic benefit. At its 

core, demand response ;is a reduction in the consumption of electric energy by customers in 

response to an increase in the price of electric energy or in response to incentive payments to 

induce that reduction. Customers that participate in demand response programs receive a 

financial incentive to generate these reductions in consumption at the request of the grid 

operator. These reductions can be achieved either by actually reducing use, or by replacing 

power supplied through the grid with power generated "behind the meter" by backup 

generators. In the latter case, the decision to participate in the demand response program is 

simply an economic one, based on a conclusion that the economic incentives for participation 

will exceed the cost of operating the backup generators. 

Backup generators receiving compensation for operating should be expected to control their 

harmful air emissions. The Proposed Amendments would, in effect, subsidize uncontrolled 

generation resources. All other things being equal, sources operating without pollution 

controls have lower costs than equivalent sources with emission controls, and therefore can 

underbid controlled sources in electricity markets. Expanding the conditions under which 

these units may operate without controls will distort energy markets and create an unlevel 

playing field. 

Further, subsidizing uncontrolled generation can lead to unnecessary and undesirable 

environmental impairment that would be avoided if a cleaner source was called upon to meet 

energy demand. The exemption will also discourage upgrades in existing capacity or 

investment in new, cleaner generation that would encourage long-term reliability, reduce 

emissions, and modernize the generation fleet. 

For these reasons, Exelon requests that TCEQ abandon its efforts to exempt from pollution 

controls units that sell power back to the electrical grid and recommends that the proposed 

rule require all commercial generation to satisfy TCEQ's pollution control requirements. We 

look forward to continued work with the TCEQ on efforts to improve regional air quality 

while ensuring the reliability of the ERCOT system. If you have any questions regarding 

these comments, please contact me directly at 512-391-1952. 

William A. Scott 

Vice President, State Government Affairs 

West and South Regions 

Exelon Corporation 
NRG Texas Power LLC 

1201 Fannin St. 

Houston, TX 77002 

December 5, 2012 

Via Electronic Submission- http://wwwS.tceg.texas.gov/rules/ecomments/ 

Bruce McAnally 

Office of Legal Services, MC205 

Texas Commission on Environmental Quality 

P.O. Box 13087 

Austin, TX 78711-3087 

Re: Comments on Proposed Rulemaking for Chapter 117, Control of Air Pollution from Nitrogen 

Compounds 

Docket No. 2012-0896-RUL 

W-7 

The NRG Companies ("NRG") appreciate the opportunity to submit comments to the Texas 

Commission on Environmental Quality (''TCEQ") on its Proposed Rule revision to 30 Texas 

Administrative Code ("TAC") Chapter 117, Control of Air Pollution from Nitrogen Compounds. NRG 

supports the Proposed Rule's clarification that emergency demand response ("DR") meets the Chapter 

117 definition of emergency situation. 

NRG has been actively involved in EPA's New Source Performance Standards ("NSPS'') and 

National Emissions Standards for Hazardous Air Pollutants ("HAP") rulemakings concerning 

Reciprocating Internal Combustion Engines ("RICE"), including submitting prior comments on the 

proposed demand response ("DR") provisions of the RICE NESHAP. NRG is submitting these 

comments on TCEQ's proposed rulemaking to ensure that the final Chapter 117 rule effectively 

regulates air emissions while facilitating the grid stability benefits of emergency DR programs. 

A. The NRG Companies 

The NRG Companies own and operate 24,000 MW of generation throughout the United States, 

including both utility-scale and small-scale fossil and renewable facilities. NRG is developing utilityscale, small-scale, and behind the meter renewable and fossil generation facilities. Additionally, NRG 

owns and operates emergency engines that will be affected by this regulation. 

B. The Definition of Emergency Engine Should Allow for Emergency DR 

1. Need for a Distinction between Economic and Emergency DR 

As utilities, generators, and regulators seek to expand clean capacity options, many have 

embraced DR programs as an option that can be implemented quickly with immediate grid and 

environmental benefits. However, as a result of this expanding usage, the term "demand response" 

has come to include a wide range of programs. For clarification, in this letter, NRG refers to DR 

programs as "emergency DR" and not "economic DR." NRG supports the continued use of emergency 

DR programs, as discussed in detail below, and advocates for the inclusion of emergency DR in the 

Chapter 117 definition of emergency situation. 
"Emergency DR/' for the purposes of these standards and comments1 is limited to rare 

instances where grid stability is threatened after all other potential remedies have been exhausted. 

Therefore1 while we support utility and consumer efforts to address peak capacity, NRG only 

recommends that units in emergency DR programs be considered emergency engines for the purposes 

of this rule. 

It is NRG's belief that the current Chapter 117 definition of emergency situation does not 

preclude an engine from operating as part of an emergency DR program. Similar to EPA's recent 

changes to their definition of emergency engine, it is NRG's belief that the intent of 117.10{15){B) was 

to prevent those engines that supply power for distribution to the grid for economic gain unrelated to 

imminent emergency conditions from being classified as emergency engines, thus avoiding 

environmental controls. As such1 NRG supports TCEQ's proposal to explicitly differentiate between 

these two operating scenarios. 

2. ERCOT's Emergency DR Programs 

When defined as the final step before Implementing rolling blackouts1 emergency DR events 

have been rare. Since its inception in 20061 ERCOT has only deployed Emergency Interruptible Load 

Service ("EILS"), now called Emergency Response Service ("ERS")r during two Energy Emergency 

Alert ("EEA") events for thirty (30) cumulative hours, with 28 of those hours occurring during the 

February 2-3, 2011 extreme cold weather event. 

While the actual engine runtime as part of emergency DR programs is very limited, ERCOT 

requires guarantees of substantially higher minimum potential operating hours to ensure grid 

reliability in the most extreme conditions. ERCOT's deployment of emergency DR depends on regional 

factors such as weather conditions/ generation fuel mix, and transmission constraints. As ERCOT's 

generation fuel mix continues to shift towards more renewable energy alternatives, their deployment 

of emergency DR programs will also likely continue to expand. As such, NRG supports TCEQ's 

proposal to align the Chapter 117 definition of emergency situation with ERCOT's emergency DR 

program in lieu of establishing an annual limit on emergency DR operation. By aligning the rule with 

the appropriate regulator, TCEQ would not be limiting future emergency DR operations and would 

instead be allowing ERCOT to manage and optimize these operations. 

3. NRG's Recommendation 

As explained above, NRG agrees that there is a strong environmental and interrelated grid 

reliability rationale for emergency DR programs. NRG supports TCEQ's proposal to explicitly include 

emergency DR events under the definition of emergency situation. However, instead of adding this 

language as a new provision under 117 .10(15)(A)(vii), NRG recommends modifying the existing 

language in 117.10{15)(A)(ii), as outlined below. NRG also recommends avoiding references to 

specific ERCOT protocols, as these protocols are likely to change periodically. 

For example, 117.10(15){A)(ii) could be revised as follows: 

(ii) the period of time that an engine is operating in response to an Electric 

Reliability Council of Texas. Inc. (ERCOTl-issued emergency notice, as defined in 

the ERGOT Protocols, Section 2: Definitions and Acronyms (April 25, 2006), issued by 

the Electric Reliability Council of Texas, Inc. (ERCOT) as specified in ERCOT PFotecols, 

SectioA 5: Dispatch (ApFil 261 2006), of imminent emergency conditions. such as 

unusually low frequency. equipment overload. capacity or energy deficiency, 

or unacceptable voltage level is applicable to the serving electric power generating 

system. The emergency situation is considered to end upon expiration of the 

emergency noticed issued by ERCOT; 
Accordingly, 117.10(15)(8) would be amended as proposed by TCEQ. 

NRG appreciates the opportunity to comment on TCEQ's proposed revisions to Chapter 117 

and is available to discuss or provide additional information, if necessary. 

::·T1r2:r:· 

craig R. Eckberg o--

NRG Energy Inc. 

Dated: December 5, 2012 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION6 

Mr. Bruce McAnally 

Office of Legal Services, MC 205 

1445 ROSS AVENUE, SUITE 1200 

DALLAS, TX 75202-2733 

Texas Commission on Environmental Quality 

P.O. Box 13087 

Austin, TX 78711-3087 

Re: Rule Project Number 2012-025-117 ·AI 

Dear Mr. McAnally: 

W-8 

Thank you for the opportunity to comment on proposed revisions to make certain sections of the Texas 

Administrative Code current when referencing the Electric Reliability Council of Texas, Incorporated 

(ERCOT). The proposed revisions affect a subparagraph within 30 TAC Chapter 101, General Air 

Quality Rules, and Definitions found at 30 TAC Chapter 117. The Texas Commission on Environmental 

Quality (TCEQ) has proposed a revision to § 101:379 (Program Audits and Reports) to reference the 

version of the ERCOT protocols effective on June 1, 2012. The TCEQ has also proposed a revision to 

§ 117.10 (Definitions) to update the definition of Emergency situation to ensure consistency with the 

ERCOT's revised protocols and ne~~ Emergency Response Service program and to reflect changes made 

by the ERCOT to promote reliability during energy emergencies by allowing the operation of generators 

for purposes of selling power to the electric grid under limited circumstances. 

We support the TCEQ's efforts to update the references to the current ERCOT protocols. We note that 

the Discrete Emission Reduction Credit (DERC) rules at 30 TAC 101.379 establish the DERC flow 

control mechanism to support attainment of the 1997 8-hour ozone standard. The EPA promulgated a 

more stringent ozone standard on March 27, 2008, and on April 3 0, 2012, the EPA designated a new 1 0-

county area as the 2008 Dallas-Fort Worth ozone nonattainment area. The TCEQ will need to review the 

technical basis for the DERC flow control at 30 TAC 101.379 and update as necessary to reflect the 

most current ozone standard as part of its attainment planning. 

Region 6 continues to offer Texas our support during the rule revision process. Please let us know how 

we may be of further assistance. 

Sincerely yours, 

,-'"'] 

)v) .,._ 

Guy Donaldson 

Chief, Air Planning Section 

cc: Jeffrey Robinson 

Recycled/Recyclable • Printsd With Vegetable Oil Based Inks on I 00% Recyded Paper (40% Postconsumer) 
INDEX OF ORAL TESTIMONY 

NO ORAL TESTIMONY WAS RECEIVED PERTAINING TO THIS RULE REVISION. 
Texas Commission on Environmental Quality 

Public Hearing Registration 

Wednesday, November 28, 2012 

2:00PM 

Rule Project No.: 2012-025-117-AI 

Short Title: Chapter 117 Definition Update and Revisions to Chapter 101 

Location: Building E, Room 201 S, at the TCEQ Central Office, 12100 Park 35 Circle, Austin, Texas 

Concerning: The rulemaking would update Chapters 101 and 117 to update the references to ERGOT's 

Emergency Response Service Program. 

Name Representing Presenting Oral Testimony? 

(Please Print) (Circle One) 

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fv\ (_ t ( ( \ \1\· f\ Co oo ""'\ c_ [\ ~ S Cil L "- ··-(:_'- S ~v·t,_ Yes8 

c :::J 1.---_p.a .. -~ 

Yes No 

Yes No 

Yes No 

Yes No 

Yes No 

Yes No 
HEARING OFFICER REPORT 

I am the hearing officer assigned to conduct the public hearing regarding Chapter 

117 Definition Update and Revisions to Chapter 101, rule project number 2012-

025-117-AI. 

A public hearing was scheduled in Austin on November 28, 2012, at 2:00p.m. in 

Building E, Room 2018, at the commission's central office located at 12100 Park 

35 Circle. TCEQ staff and a court reporter were present for the public hearing. 

At 1:30 p.m., the room was opened and TCEQ staff was available to the public for 

an informal question and answer period. At 2:10 p.m. it was determined that 

those that were present did not want to make comments on the record. 

Therefore, the public hearing was not formally opened for comment and a 

transcript was not prepared. 

Hearing Officer 

Date signed 
EVALUATION 
Texas Commission on Environmental Quality 

Interoffice Memorandum 

To: Commissioners 

Thru: Bridget C. Bohac, Chief Clerk 

Zak Covar, Executive Director 

From: '.J.St:ve Hagle, P.E., Deputy Director ;r ~fflce of Air 

Docket No.: 2012-0896-RUL 

Date: March 22, 2013 

Subject: Commission Approval for Rulemaldng Adoption 

Chapter 117, Control of Air Pollution from Nitrogen Compounds 

Chapter 101, General Air Quality Rules 

Chapter 117 Definition Update and Revisions to Chapter 101 

Rule Project No. 2012-025-117-AI 

Background and reason(s) for the rulemaking: 

The Electric Reliability Council of Texas, Inc. (ERCOT) manages the electrical grid within 

the ERCOT region of Texas with oversight by the Public Utility Commission of Texas 

(PUCT). On March 22, 2012, the PUCT repealed Title 16 Texas Administrative Code (TAC) 

Chapter 25, Subchapter S, §25.507, to replace the Emergency Interruptible Load Service 

(ElLS) program with the Emergency Response Service (ERS) program. Like the ElLS 

program, the new ERS program is designed to help decrease the likelihood of requiring 

firm load shedding (i.e., rolling black-outs) during an ERCOT-declared energy emergency 

by decreasing the power demand on the electrical grid. Under the ERS program, 

pa.rticipants commit to decrease their power consumption from the electrical grid during a 

declared energy emergency. ERS program participants might meet this commitment by 

decreasing overall power use, replacing power consumption from the grid with local 

generation by operating local emergency backup generators, or a combination of both. 

However, unlike the ElLS program, the new ERS program allows qualified participants to 

provide power back into the electrical grid for sale during an ERCOT -declared energy 

emergency under limited circumstances. 

Operating an emergency generator as part of ERCOT's former ElLS program meets the 

existing definition of an emergency situation in 30 TAC Chapter 117, Subchapter A, §117.10. 

The existing definition of an emergency situation in §117.10 includes the period of time that 

an emergency notice issued by ERCOT is applicable to the serving electric power 

generating system and references the specific ERCOT protocols that detail the emergency 

notice. However, the Chapter 117 definition of an emergency situation also specifically 

excludes operation for purposes of supplying power for distribution to the electrical grid. 

Therefore, operation of an emergency generator that also provides power back to the 

electrical grid would not be considered an emergency situation under the current Chapter 

117 definition even if the operation were at the directive of ERCOT under the ERS program. 

While Chapter 117 would not prohibit companies from participating in the new ERS 

program, the Chapter 117 rules that apply in the Dallas-Fort Worth (DFW) and HoustonGalveston-Brazoria (HGB) 1997 eight-hour ozone nonattainment areas have specific 
Commissioners 

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March 22, 2013 

Re: Docket No. 2012~0896-RUL 

provisions that restrict the non-emergency operational hours of emergency generators. For 

these sources to qualify for an exemption from the rule control requirements, participants 

in the ERS program would have to count hours of operation during an ERCOT ·emergency 

as non-emergency use if power is sold to the grid and might risk losing exemption status 

under Chapter 117 if the operational hours exceed the exemption criteria. · 

The revised ERCOT protocols for emergency notice referenced in Chapter 117 are·aJso 

referenced in 30 TAC Chapter 101. Currently, §101.379 provides an exemption from the 

discrete emissions reduction credit (DERC) flow control limit for DERCs used in response 

to ERCOT -declared emergencies. The exemption was put in place to ensure that should 

there be an ERCOT -declared emergency, a regulated entity would not be put into a 

situation of either non-compliance with agency rules or contributing to electrical grid 

instability by not responding to an ERCOT -declared emergency notice. 

Scope of the rulemaking: 

A.) Summary of what the rulemaking will do: 

The adopted rulemaking amends Chapters 101 and 117 to update references to ERCOT 

protocols and reflect changes to ERCOT's new ERS program. The adopted rulemaking 

amends §101.379 and the definition of emergency situation in §117.10 to reference the 

version of the ERCOT nodal protocols effective June 1, 2012. The adopted rulemaking also 

amends the definition of emergency situation in §117.10 to reflect changes made by ERCOT 

to promote reliability during energy emergencies by allowing the operation of generators 

for purposes of selling power to the elc;:Jctric grid under limited circumstances. The 

amendments to Chapters 101 and 117 will be submitted to the United States Environmental 

Protection Agency (EPA) as a revision to the state implementation plan (SIP). 

B.) Scope required by federal regulations or state statutes: 

None 

C.) Additional staff recommendations that are not required by federal rule or 

state statute: 

None 

Statutory authority: 

The amendments will be adopted under Texas Water Code (TWC), §5.102, concerning 

General Powers, that provides the commission with the general powers to carry out its 

duties under the TWC; TWC, §5.103, concerning Rules, that authorizes the commission to 

adopt rules necessary to carry out its powers and duties under the TWC; TWC, §5.105, 

concerning General Policy, that authorizes the commission by rule to establish and 

approve all general policy of the commission; and under Texas Health and Safety Code 

(THSC), §382.017, concerning Ru1es, that authorizes the commission to adopt rules 

consistent with the policy and purposes of the Texas Clean Air Act. The amendments will 

also be adopted under THSC, §382.002, concerning Policy and Purpose, that establishes 

the commission's purpose to safeguard the state's air resources consistent with the 
· Commissioners 

Page3 

March 22, 2013 

Re: DocketNo. 2012-0896-RUL 

protection of public health, general welfare, and physical property; §382.oil, concerning 

General Powers and Duties, that authorizes the commission to control the quality of the 

state's air; and §382.012, concerning State Air Control Plan, that authorizes the 

commission to prepare and develop a general, comprehensive plan for the proper control 

of the state's air. The amendments will also be adopted under Federal Clean Air Act, 42 

United States Code, §§7401, et seq., which requires states to submit SIP revisions that 

specify the manner in which the National,Ambient Air Quality Standards will be achieved 

and maintained within each air quality control region of the state. 

Effect on the: 

A.) Regulated community: The adopted rulemaking will prevent ERS program 

participants from potentially losing exemption status under Chapter 117 if they provide 

power to the electrical grid during an ERCOT -declared energy emergency. Eliminating this 

potential disincentive may improve reliability of electric service in the ERCOT region while 

also promoting participation in the ERS program. 

B.) Public: The adopted rulemaking will prevent ERS program participants from losing 

exemption status under Chapter 117 if they provide power to the electrical grid during an 

ERCOT-declared emergency. Eliminating this potential disincentive may help promote 

participation in the ERS program and improve reliability of electric service in the ERCOT 

region. 

C.) Agency programs: The adopted rulemaking will have no impact on agency 

programs. 

Stakeholder meetings: 

No stakeholder meetings were held for this rulemaking project. 

Public comment: 

The commission scheduled a public hearing in Austin on November 28, 2012. However, 

the commission did not officially open the hearing because no one registered to provide 

comments. The public comment period closed December 5, 2012. The commission received 

comments from the Association of Electric Companies of Texas (AECT), Blue Sky 

Environmental LLC (Blue Sky), Calpine Corporation (Calpine), EnerNOC, Inc. (EnerNOC), 

EPA, Electric Reliability Council of Texas (ERCOT), Exelon Corporation (Exelon), and 

NRG Texas Power LLC, (NRG). AECT submitted comments on behalf of AEP Texas, 

CenterPoint Energy, El Paso Electric, Entergy, GDF SUEZ, Nextera Energy, Lone Star 

Transmission, Oncor, TXU Energy, Luminant, NRG, Reliant, TNMP, and Xcel Energy. 

AECT, Blue Sky, EnerNOC, EPA, ERCOT, and NRG expressed support for the proposed 

revisions; Calpine and Exelon objected to the proposed revisions. Significant public 

comments are summarized as follows. 

• ERCOT recommended the commission amend §117.10(15)(A)(ii) and 

§101.379(c)(2)(D) to refer ERCOT's dispatch of ERS rather than on ERCOT's 
Commissi<;mers 

Page4 

March 22, 2013 

Re: Docket No. 2012-0896-RUL 

· issuance of an emergency notice. To ensure that these rules continue to apply to 

sources that are not participating in ERGOTs ERS program but are operating as a 

result of an ERGOT-declared emergency, the commission is retaining the reference 

to emergency notice. However, in response to ERGOTs comments the commission 

is revising the definition ofemergency situation to also include operations in 

response to an ERGOT energy emergency alert. The commission is making this 

change to ensure the definition of emergency situation includes situations when 

system conditions deteriorate so rapidly that it is notpossible for ERCOT to issue 

an emergency notice prior to declaring an energy emergency alert and 

subsequently deploying ERS. 

• ERCOT and NRG recommended the commission avoid references to ERCOT's nodal 

protocols since these protocols are frequently revised. ERGOT recommended the 

commission revise §117.10(15)(A)(ii) and §101.379(c)(2)(D) to instead reference the 

PUCT's ERS rule in 16 TAC §25.507. NRG suggested language describing the 

circumstances under which ERCOT would issue an emergency notice. Although the 

commission is aware that the ERGOT Nodal Protocols are frequently revised, the 

commission needs to be certain of the specific circumstances under which ERGOT 

will deploy ERS resources to help ensure that the rule amendments can be 

approved by the EPA as part of the SIP. The commission respectfully declznes to 

make the suggested changes. 

• AECTand NRG supported revising §117.10(15) to operations that are part of 

ERCOT' s ERS program. To account for emergency demand response programs 

· initiated by Texas utilities that are experiencing voltage reductions, Blue Sky and 

EnerNOC recommended the commission revise §117.10(15) and §101.379(c)(2)(D) 

to also include operation iri response to a utility-declared emergency and 

recommended the commission not revise §117.10(15)(A)(vii) to specify an ERCOT 

energy emergency alert (EEA) level. The commission agrees that the definition of 

emergency situation should include operations during the period ofan ERGOTdeclared emergency but does not agree that §117.10(15) and §101.379(c)(2)(D) 

should include operations that occur in response to a utility-declared emergency. 

The commission makes no change in response to these comments. 

• Blue Sky and EnerNOC recommended the commission provide guidance regarding 

the SIP process and confirm that proposed changes to §101.379 and §117.10 will not 

be fully implemented until the EPA approves the SIP revision .. The adopted rule 

becomes effective 20 calendar days after it is filed with the Secretary of State for 

publication in the Texas Register and is fully enforceable by the commission from 

that time on irrespective of EPA approval of the rule revision as part of the SIP. 

The commission makes no change in response to these comments. 

• Calpine and Exelon requested the commission not revise the definition of 

emergency situation in §117.10(15) to allow ERS participants to sell power back to 
. Commissioners 

Pages 

March 22, 2013 

Re: Docket No. 2012-0896-RUL 

the electrical grid and recommended the commission instead require all commercial 

generation to meet the commission's applicable air quality regulations. The 

amendments to §117.10(15) ensure that the changes made to ERGOT's new ERS 

program, which allow participants to provide power for distribution to the 

-electrical grid, do not narrow the scope of what the commission currently 

considers an emergency situation. The adopted rulemaking does not relieve 

affected sources from the obligation to meet any air quality regulation that 

currently applies. The commission makes no change in response to these 

comments. 

• Calpine and Exelon commented that exempting commercial backup generation 

from air quality regulations would negatively affect air quality by expanding the 

number of high-emitting diesel engines; discouraging investment in new, lowemitting generation; and providing an unnecessary subsidy to high-emitting 

sources. Calpine also commented that the proposed rule might not benefit electric 

reliabi\ity. Operation of emergency generators during an ERGOT-declared 

emergency under the previous ElLS program was considered an emergency 

situation under the existing Chapter 117 rules. The adopted revisions to §117.10(15) 

account that the changes made to ERGOTs new ERS program by allowing 

operation of an emergency generator for supplying power to the electrical grid to 

be considered an emergency situation if the operation is part of ERGOT's ERS 

program and in direct response to instruction by ERGOT during an EEA. The 

purpose of this rulemaking is to ensure that participants in the ERS program may 

still claim operational hours during such energy emergencies as·an emergency 

situation under Chapter 117 rules. Therefore, the commission does not consider the 

rulemaking as expanding the number of stationary diesel engines in operation or 

as providing a subsidy for diesel engines. Additionally, to qualify for an 

exemption, owners and operators of emergency generators must meet all 

applicable exemption criteria, which include emission standards for specific 

exempt diesel engines in the DFW and HGB areas. While the adopted revisions to 

§117.10(15) do not directly promote reliability, the rulemaking helps ensure that 

Chapter 117 rules will not be a disincentive to the ERS program by forcing 

participants to count emergency operation as non-emergency hours. The 

commission makes no changes in response to these comments. 

• EPA commented that the commission will need to review the technical basis for the 

DERC flow control in §101.379 and update as necessary to reflect the most current 

ozone standard as part of its attainment planning. The commission may consider 

the DERC flow control requirements as part of its planning efforts for the 2008 

ozone standard. The commission makes no change in response to this comment. 

Significant changes from proposal: 

In response to ERCOT's comments, the commission is revising §117.10(15) and 

§101.379(c)(2)(D) to also include operations in response to an ERCOT energy emergency 
Commissioners 

Page6 

March 22, 2013 

Re: Docket No. 2012-0896-RUL 

alert. The commission is making this change to ensure the definition of emergency 

situation includes situations when system conditions deteriorate so rapidly that it is not 

possible for ERCOT to issue an emergency notice prior to declaring an energy emergency 

alert and subsequently deploying ERS. 

In response to ERCOT's comments on this rulemaking, the commission is revising the 

proposed language in §117.10(15)(A)(vii) to refer to only those operations that occur during 

the period of an ERCOT EEA instead of the period of an ERCOT emergency notice. The 

intent of this rulemaking is to limit the circumstances under which an emergency 

generator can provide power for distribution to the electrical grid to only those operations 

that are part of ERCOT'.s ERS program and in direct response to ERCOT' s dispatch 

instruction during the period of an ERCOT EEA. ERCOT only deploys ERS resources 

during an EEA, so it is unnecessary for the commission to refer to the period during an 

ERCOT emergency notice. 

Potential controversial concerns and legislative interest: 

The definition section of Chapter 117 and the associated divisions that reference the 

definition of emergency situation are included in the SIP. Because the adopted revisions to 

the definition of emergency situation is limited to ERCOT"-declared emergencies, the 

amendment Will not expand the use of emergency backup generation and should not be 

considered as backsliding under the Federal Clean Air Act. However, the amended 

definition is still subject to EPA review and approval as a SIP revision. 

Does this rrilem8.king affect any current policies or require development of 

new policies? 

No 

What al."e the consequences if this rulemaking does not go forward? Are there 

alternatives to rulemaldng? 

The commission could decide not to revise Chapters 101 and 117 to update references to 

ERCOT protocols and reflect changes to ERCOT's new ERS program. Not amending 

Chapters 101 and 117 to reference the new ERCOT protocols could potentially cause 

confusion for regulated entities and delay the processing of DERC usage requests. If the 

Chapter 117 definition is not adopted, ERS program participants could potentially lose 

exemption status under Chapter 117 if they provide power to the electrical grid during an 

ERCOT~declared emergency. The potential loss of exemption status under Chapter 117 may 

discourage participation in the ERS program and negatively impact reliability of electric 

service in the ERCOT region. · 

Key points in the adoption rulemaking schedule: 

Texas Register proposal publication date: November 2, 2012 

Anticipated Texas Register publication date: April 26, 2013 

Anticipated effective date: May 2, 2013 

Six-month Texas Register filing deadline: May 2, 2013 
· Commissioners 

Page7 

March 22, 2013 

Re: Docket No. 2012-0896-RUL 

Agency contacts: 

Ray Schubert, Rule Project Manager, 239-6615, Air Quality Division 

Alexis Lorick, Staff Attorney, 239-0649 

Bruce McAnally, Texas Register Coordinator, 239-2141 

cc: Chief Clerk, 2 copies 

Executive Director's Office 

Susana M. Hildebrand, P.E. 

Anneldsal 

Curtis Seaton 

Tucker Royall 

Office of General Counsel 

Ray Schubert 

Bruce McAnally 
EVALUATION OF TESTIMONY 

The Texas Commission on Environmental Quality (TCEQ, agency, or commission) 

adopts the amendment to §101.379 with change to the proposed text as published in the 

November 2, 2012 issue of the Texas Register (37 TexReg 8718). 

If adopted, the amended §101.379 will be submitted to the United States Environmental 

Protection Agency (EPA) as a revision to the state implementation plan (SIP). 

Background and Summary of the Factual Basis for the Adopted Rule 

The Electric Reliability Council of Texas, Inc. (ERCOT) manages the electrical grid 

within the ERCOT region of Texas, with oversight by the Public Utility Commission of 

Texas (PUCT). On March 22, 2012, the PUCT repealed 16 TAC §25.507, to replace the 

Emergency Interruptible Load Service (ElLS) program with the Emergency Response 

Service (ERS) program (new 16 TAC §25.507). Like the ElLS program, the new ERS 

program is designed to help decrease the likelihood of requiring firm load shedding (i.e., 

rolling black-outs) during an ERCOT-declared energy emergency by decreasing the 

power demand on the electrical grid. Subsequent changes to ERCOT's Nodal Protocols 

reflecting the new ERS program became effective on June 1, 2012. 

On December 10, 2008, the commission adopted the amendment to §101.379 to restrict 

the use of discrete emissions reduction credits (DERCs) in the Dallas-Fort Worth 1997 

eight-hour ozone nonattainment area (DFW area) to a level consistent with the 

attainment and maintenance of the 1997 eight-hour ozone National Ambient Air Quality 

1 
Standard (NAAQS). The rule requires an annual review of the DFW area DERC program 

to determine the flow control limit and apportion available DERCs for potential use. The 

rule also provides an exemption from the DFW flow control limit for DERCs used in 

response to an ERCOT -declared emergency situation and references the specific ERCOT 

protocols that detail the emergency notice. The existing rule references a previous 

version of the ERCOT protocols, which could potentially cause confusion for regulated 

entities and delay the processing of DERC usage requests. The adopted rulemaking 

updates §101.379 to reference the version of the ERCOT protocols effective on June 1, 

2012. 

The amendment to §101.379 is adopted concurrently with the amendment to 30 TAC 

§117.10 that will be published in a separate rulemaking in this issue of the Texas 

Register. 

Section Discussion 

The commission revises §101.379(c)(2)(D) to reference the version ofthe ERCOT 

Protocols effective on June 1, 2012. Additionally, in response to ERCOT's comments on 

this rulemaking, the commission is revising §101.379(c)(2)(D) to also include operations 

in response to an ERCOT energy emergency alert. The commission is making this 

change to address situations when system conditions deteriorate so rapidly that it is not 

possible for ERCOT to issue an emergency notice prior to declaring an energy 

emergency alert. 

2 
Final Regulatory Impact Analysis 

The commission reviewed the adopted rule in light of the regulatory analysis 

requirements of Texas Government Code, §2001.0225 and determined that the adopted 

rulemaking does not meet the definition of a major environmental rule. Texas 

Government Code, §2001.0225 states that a major environmental rule is a rule for 

which the specific intent is to protect the environment or reduce risks to human health 

from environmental exposure and that may adversely affect in a material way the 

economy, a sector of the economy, productivity, competition, jobs, the environment, or 

the public health and safety of the state or a sector of the state. Furthermore, while the 

adopted rulemaking does not constitute a major environmental rule, even if it did, a 

regulatory impact analysis would not be required because the adopted rulemaking does 

not meet any of the four applicability criteria for requiring a regulatory impact analysis 

for a major environmental rule. Texas Government Code, §2001.0225 applies only to a 

major environmental rule that: 1) exceeds a standard set by federal law, unless the rule 

is specifically required by state law; 2) exceeds an express requirement of state law, 

unless the rule is specifically required by federal law; 3) exceeds a requirement of a 

delegation agreement or contract between the state and an agency or representative of 

the federal government to implement a state and federal program; or 4) adopts a rule 

solely under the general powers of the agency instead of under a specific state law. 

Specifically, it does not meet any of the four applicability criteria listed in Texas 

Government Code, §2001.0225 because: 1) the adopted rulemaking is part of the SIP, 

and as such is designed to meet, not exceed the relevant standard set by federal law; 2) 

parts of the adopted rulemaking are directly required by state law; 3) no contract or 

delegation agreement covers the topic that is the subject of this adopted rulemaking; 

3 
and 4) the adopted rulemaking is authorized by specific sections of Texas Health and 

Safety Code (THSC), Chapter 382 (also known as the Texas Clean Air Act), and the 

Texas Water Code, which are cited in the Statutory Authority section of this preamble. 

The adopted rule implements requirements of the Federal Clean Air Act (FCAA). Under 

42 United States Code (USC), §7410, each state is required to adopt and implement a 

SIP containing adequate provisions to implement, attain, maintain, and enforce the 

NAAQS within the state. While 42 USC, §7410 generally does not require specific 

programs, methods, or reductions in order to meet the standard, SIPs must include 

enforceable emission limitations and other control measures, means, or techniques 

(including economic incentives such as fees, marketable permits, and auctions of 

emissions rights), as well as schedules and timetables for compliance as may be 

necessary or appropriate to meet the applicable requirements of this chapter (meaning 

42 USC, Chapter 85, Air Pollution Prevention and Control, otherwise known as the 

FCAA). The provisions of the FCAA recognize that states are in the best position to 

determine what programs and controls are necessary or appropriate in order to meet the 

NAAQS. This flexibility allows states, affected industry, and the public to collaborate on 

the best methods for attaining the NAAQS for the specific regions in the state. Even 

though the FCAA allows states to develop their own programs, this flexibility does not 

relieve a state from developing a program that meets the requirements of 42 USC, 

§7410. States are not free to ignore the requirements of 42 USC, §7410, and must 

develop programs and control measures to assure that their SIPs provide for 

implementation, attainment, maintenance, and enforcement of the NAAQS within the 

state. The specific intent of the adopted rulemaking is to update references to the 

4 
ERCOT protocols in §101.379 to be consistent with §117.10. 

While the adopted rulemaking protects the environment or reduces risks to human 

health from environmental exposure, it does not constitute a major environmental rule 

under Texas Government Code, §2001.0225(g)(3) because it does not adversely affect in 

a material way the economy, a sector of the economy, productivity, competition, or jobs, 

nor would the rulemaking adversely affect in a material way the environment, or the 

public health and safety of the state or a sector of the state. The rule making as a result is 

not subject to a regulatory impact analysis under Texas Government Code, §2001.0225 

because it is not a major environmental rule. 

The requirement to provide a fiscal analysis of regulations in the Texas Government 

Code was amended by Senate Bill (SB) 633, 75th Legislature, 1997. The intent of SB 633 

was to require agencies to conduct a regulatory impact analysis of extraordinary rules. 

These are identified in the statutory language as major environmental rules that will 

have a material adverse impact and will exceed a requirement of state law, federal law, 

or a delegated federal program; or are adopted solely under the general powers of the 

TCEQ. With the understanding that this requirement would seldom apply, the 

commission provided a cost estimate for SB 633 that concluded: based on an 

assessment of rules adopted by the agency in the past, it is not anticipated that the bill 

will have significant fiscal implications for the agency due to its limited application. The 

commission also noted that the number of rules that would require assessment under 

the provisions of the bill was not large. This conclusion was based, in part, on the 

criteria set forth in the bill that exempted rules from the full analysis unless the rule was 

5 
a major environmental rule that exceeded a federal law. 

The FCAA does not always require specific programs, methods, or reductions in order to 

meet the NAAQS; thus, states must develop programs for each nonattainment area to 

help ensure that those areas will meet the attainment deadlines. Because of the ongoing 

need to address nonattainment issues and to meet the requirements of 42 USC, §7410, 

the commission routinely proposes and adopts revisions to the SIP and rules. The 

legislature is presumed to understand this federal scheme. If each rule adopted for 

inclusion in the SIP were considered to be a major environmental rule that exceeds 

federal law, then every revision to the SIP would require the full regulatory impact 

analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions 

reached by the commission in its cost estimate and by the Legislative Budget Board 

(LBB) in its fiscal notes. Since the legislature is presumed to understand the fiscal 

impacts of the bills it passes and that presumption is based on information provided by 

state agencies and the LBB, the commission believes that the intent of SB 633 was only 

to require the full regulatory impact analysis for rules that are extraordinary in nature. 

While the rules have a broad impact, that impact is no greater than is necessary or 

appropriate to meet the requirements of the FCAA. For these reasons, rules adopted for 

inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a), 

because they are required by federal law. 

The commission has consistently applied this construction to its rules since this statute 

was enacted in 1997. Since that time, the legislature has revised the Texas Government 

Code but left this provision substantially unamended. It is presumed that, when an 

6 
agency interpretation is in effect at the time the legislature amends the laws without 

making substantial change in the statute, the legislature is deemed to have accepted the 

agency's interpretation. (Central Power & Light Co. v. Sharp, 919 S.W.2d 485,489 (Tex. 

App. Austin 1995), writ denied with per curiam opinion respecting another issue, 960 

S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. 

Austin 1990, no writ) superseded by statute on another point of law, Tax Code 

§112.108, Other Actions Prohibited, as recognized in, First State Bank of Dumas v. 

Sharp, 863 S.W.2d 81, 83 (Tex. App. Austin 1993, no writ); Cf Humble Oil & Refining 

Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co., 9 

S.W.3d 884, 893 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 

24 S.W.3d 581 (Tex. App. Austin 2000, pet. denied); and Coastal Indust. Water Auth. v. 

Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978).) 

The commission's interpretation of the regulatory impact analysis requirements is also 

supported by a change made to the Texas Administrative Procedures Act (AP A) by the 

legislature in 1999. In an attempt to limit the number of rule challenges based upon APA 

requirements, the legislature clarified that state agencies are required to meet these 

sections of the APA against the standard of substantial compliance as required in Texas 

Government Code, §2001.035. The legislature specifically identified Texas Government 

Code, §2001.0225 as falling under this standard. The commission has complied with the 

requirements of Texas Government Code, §2001.0225. 

Even if the adopted rulemaking constitutes a major environmental rule under Texas 

Government Code, §2001.0225(g)(3), a regulatory impact analysis is not required 

7 
because this exemption is part of the commission's SIP for making progress toward the 

attainment and maintenance of the NAAQS. Therefore, the adopted rulemaking does 

not exceed a standard set by federal law or exceed an express requirement of state law, 

since they are part of an overall regulatory scheme designed to meet, not exceed the 

relevant standard set by federal law (NAAQS). The commission is charged with 

protecting air quality within the state and to design and submit a plan to achieve 

attainment and maintenance of the federally mandated NAAQS. The Third District 

Court of Appeals upheld this interpretation in Brazoria County v. Texas Comm'n on 

Envtl. Quality, 128 S.W. 3d 728 (Tex. App. -Austin 2004, no writ). The specific intent of 

the adopted rulemaking is to update references to the ERCOT protocols in §101.379 to 

be consistent with §117.10. This adoption, therefore, does not exceed an express 

requirement of federal law. The amendment is needed to implement state law, but does 

not exceed those new requirements. Finally, this rulemaking was not developed solely 

under the general powers of the agency but is authorized by specific sections of THSC, 

Chapter 382, which are cited in the Statutory Authority section of this preamble, 

including THSC, §382.012 and §382.019. Because this adopted rulemaking does not 

meet any of the four applicability requirements, Texas Government Code, 

§2001.0225(b) does not apply and a regulatory impact analysis is not required. 

The commission invited public comment regarding the draft regulatory impact analysis 

determination during the public comment period. No comments were received on the 

regulatory impact analysis determination. 

8 
Takings Impact Assessment 

The commission evaluated the adopted rulemaking and performed an analysis of 

whether the adopted rulemaking constitutes a taking under Texas Government Code, 

Chapter 2007. The commission's preliminary assessment indicates Texas Government 

Code, Chapter 2007 does not apply. 

Under Texas Government Code, §2007.002(5), taking means: "(A) a governmental 

action that affects private real property, in whole or in part or temporarily or 

permanently, in a manner that requires the governmental entity to compensate the 

private real property owner as provided by the Fifth and Fourteenth Amendments to the 

United States Constitution or Section 17 or 19, Article I, Texas Constitution; or (B) a 

governmental action that: (i) affects an owner's private real property that is the subject 

of the governmental action, in whole or in part or temporarily or permanently, in a 

manner that restricts or limits the owner's right to the property that would otherwise 

exist in the absence of the governmental action; and (ii) is the producing cause of a 

reduction of at least 25 percent in the market value of the affected private real property, 

determined by comparing the market value of the property as if the governmental action 

is not in effect and the market value of the property determined as if the governmental 

action is in effect." 

Promulgation and enforcement of the rulemaking would be neither a statutory nor a 

constitutional taking of private real property. The primary purpose of the rulemaking is 

an update to Chapter 101, Subchapter H to ensure consistency with ERCOT's new ERS 

program. This rule is not burdensome, restrictive, or limiting of rights to private real 

9 
property because the rulemaking regulates the use of electric generators in certain 

limited emergency situations. Furthermore, the rulemaking benefits the public by 

potentially decreasing the likelihood of requiring firm load shedding (i.e., rolling blackouts) when additional control measures are needed to achieve or maintain attainment of 

the federal air quality standards through the use of electric generators. The rulemaking 

does not affect a landowner's rights in private real property because this rulemaking 

does not burden, restrict, or limit the owner's right to property, nor does it reduce the 

value of any private real property by 25% or more beyond that which would otherwise 

exist in the absence of the regulations. Therefore, this rule does not constitute a taking 

under Texas Government Code, Chapter 2007. 

Consistency with the Coastal Management Program 

The commission reviewed the adopted rulemaking and found that the rule is subject to 

the Texas Coastal Management Program (CMP) in accordance with the Coastal 

Coordination Act, Texas Natural Resources Code, §§33.201 et seq., and therefore must 

be consistent with all applicable CMP goals and policies. The commission conducted a 

consistency determination for the adopted rule in accordance with Coastal Coordination 

Act Implementation Rules, 31 TAC §505.22, and found the adopted rulemaking is 

consistent with the applicable CMP goals and policies. 

The CMP goal applicable to the adopted rulemaking is the goal to protect, preserve, and 

enhance the diversity, quality, quantity, functions, and values of coastal natural resource 

areas (§501.12(1)). The CMP policy applicable to the adopted rulemaking is the policy 

that commission rules comply with federal regulations in 40 Code of Federal 

10 
Regulations to protect and enhance air quality in the coastal areas (§501.32). The 

adopted rulemaking does not increase emissions of air pollutants and is therefore, 

consistent with the CMP goal in §501.12(1) and the CMP policy in §501.32. 

Promulgation and enforcement of this rule will not violate or exceed any standards 

identified in the applicable CMP goals and policies because the adopted rule is 

consistent with these CMP goals and policies and because this rule does not create or 

have a direct or significant adverse effect on any coastal natural resource areas. 

Therefore, in accordance with §505.22(e), the commission affirms that this rulemaking 

action is consistent with CMP goals and policies. 

The commission invited comment on the consistency of this rulemaking during the 

public comment period. The commission received no comments on the consistency of 

this rulemaking. 

Effect on Sites Subject to the Federal Operating Permits Program 

The adopted amendment will not require any changes to federal operating permits. 

Public Comment 

The commission scheduled a public hearing in Austin on November 28, 2012. However, 

the hearing was not officially opened because no one registered to provide comments. 

The public comment period closed on December 5, 2012. The commission received 

comments from Blue Sky Environmental LLC (Blue Sky), EnerNOC, Inc. (EnerNOC), 

EPA, and ERCOT. 

11 
Response to Comments 

Comment 

Blue Sky, EnerNOC, EPA, and ERCOT expressed support for the proposed revisions to 

§101.379(c)(2)(D). 

Response 

The commission appreciates the support. 

Comment 

ERCOT commented that if system conditions deteriorate too rapidly it might not be 

possible to issue an emergency notice prior to declaring an energy emergency alert and 

subsequently deploying ERS. ERCOT recommended the commission amend 

§101.379(c)(2)(D) to refer to ERCOT's dispatch of ERS rather than the issuance of an 

emergency notice. ERCOT recommended that the commission reference the PUCT's 

ERS rule in 16 TAC §25.507 rather than the ERCOT Nodal Protocols referenced in the 

proposed rules. ERCOT expressed concern that the frequent revisions to the ERCOT 

Nodal Protocols could create confusion as to the applicability of §117.10(15)(A)(ii) and 

§101.379(c)(2)(D). ERCOT suggested the commission could more easily monitor the 

infrequent changes to the PUCT rules than the numerous ongoing proposals to revise 

the ERCOT Nodal Protocols referenced in the proposed rules. 

Response 

The intent of §101.379(c)(2)(D) is to provide electric generating facilities 

12 
that are subject to the DERC flow control limit specified in 

§101.379(c)(2)(A), a temporary exemption from the DERC flow control 

limit. Limiting the definition of an ERCOT -declared emergency solely to 

deployment of the ERS will exclude electric generating facilities from being 

temporarily exempt from the DERC flow control limit when required to 

operate in an emergency situation in which the safety or reliability of the 

ERCOT system is compromised or threatened, as determined by ERCOT. 

Since the provision in §101.379(c)(2)(D) affects sources that are likely not 

participating in ERCOT's ERS program but are operating as a result of an 

ERCOT -declared emergency, it is necessary for the commission to retain 

the reference to emergency notice. Additionally, in response to ERCOT's 

comments the commission is revising §101.379(c)(2)(D) to also include 

operations in response to an ERCOT energy emergency alert. The 

commission is making this change to ensure the definition of an ERCOTdeclared emergency includes situations when system conditions deteriorate 

so rapidly that it is not possible for ERCOT to issue an emergency notice 

prior to declaring an energy emergency alert. 

The commission is aware that the ERCOT Nodal Protocols references in 

§101.379(c)(2)(D) are frequently revised and have even been revised since 

the commission proposed this rulemaking in October 2012. Since the 

provision in §101.379(c)(2)(D) affects sources that are likely not 

participating in ERCOT's ERS program but are operating as a result of an 

ERCOT -declared emergency, it is not appropriate for the commission to 

13 
reference the PUCT's ERS rule in 16 TAC §25.507. The commission 

respectfully declines to make the suggested change. 

Comment 

To account for emergency demand response programs initiated by Texas utilities that 

are experiencing voltage reductions, Blue Sky and EnerNOC recommended expanding 

the term ERCOT-declared emergency in §101.379(c)(2)(D) to also include utilitydeclared emergencies. 

Response 

The purpose of this rule making is not to redefine emergency situation but 

merely to update §101.379 to reference the version of the ERCOT protocols 

effective on June 1, 2012. The commission does not agree that an emergency 

situation should include operations that occur in response to a utilitydeclared emergency. The suggested change would effectively decrease the 

stringency of the existing rules by expanding the scope of the current 

definition to include additional situations that would not currently be 

considered emergency situations. Because the EPA has approved the 

existing rules as part of the SIP, the suggested expansion of the definition 

could be considered backsliding and result in the EPA's disapproval of the 

rulemaking. As discussed elsewhere in the Response to Comments section 

of the preamble, the commission is also revising the proposed rule language 

to include operations that are in direct response to an instruction by 

ERCOT during the period of an ERCOT energy emergency alert. The 

14 
commission makes no change in response to these comments. 

Comment 

EPA stated that the current DERC rules in §101.379 establish the DERC flow-control 

mechanism to support attainment of the 1997 eight-hour ozone standard. The EPA 

commented it has since promulgated a more stringent ozone standard. On March 27, 

2008 and on April30, 2012, the EPA designated a new ten-county area as the 2008 

Dallas-Fort Worth ozone nonattainment area. EPA also commented that the 

commission will need to review the technical basis for the DERC flow control in 

§101.379 and update as necessary to reflect the most current ozone standard as part of 

its attainment planning. 

Response 

The scope of this rulemaking is limited to updating the reference to the 

ERCOT protocols and therefore evaluating the technical basis of the DERC 

flow control for the 2008 ozone standard is beyond the scope of this 

rulemaking. However, the commission may consider the DERC flow control 

requirement as part of its planning efforts for the 2008 ozone standard. 

The commission makes no change in response to this comment. 

Comment 

Blue Sky and EnerNOC recommended the commission provide guidance regarding the 

SIP process. The commenters also requested the commission confirm that the following 

assumptions are correct: 1) the revisions in §117.379 will not be fully implemented until 

15 
the EPA approves the SIP revision; 2) engines participating in the ERS and other utilitysponsored emergency demand response programs without sending power to the electric 

grid can continue to operate under the definition of emergency situation until the 

references to the appropriate protocols are changed; and 3) emergency engines could 

not send power to the electric grid under an emergency situation until the SIP revision is 

approved. 

Response 

The Texas Water Code authorizes the commission to propose and adopt 

rules necessary to carry out its powers and duties. Once adopted, the 

commission files the rule with the Secretary of State for publication in the 

Texas Register. This action usually occurs the first Friday after adoption. 

The rule becomes effective 20 calendar days after filing and is fully 

enforceable by the commission from that time on irrespective of EPA 

approval of the rule revision as part of the SIP. Therefore, beginning on the 

effective date of the rule, the definition of emergency situation will include 

operations in direct response to an instruction by ERCOT during the period 

of an ERCOT -declared emergency that supply power to the electric grid. As 

discussed elsewhere in the Response to Comments section of the preamble, 

the definition of emergency situation in §101.379 includes operations 

during an ERCOT -declared emergency but does not include other utilitysponsored emergency demand response programs. The commission makes 

no change in response to these comments. 

16 
EVALUATION OF TESTIMONY 

The Texas Commission on Environmental Quality (TCEQ, agency, or commission) 

adopts the amendment to §117.10 with changes to the proposed text as published in the 

November 2, 2012 issue of the Texas Register (37 TexReg 8722). 

If adopted, the amended §117.10 will be submitted to the United States Environmental 

Protection Agency as a revision to the state implementation plan (SIP). 

Background and Summary of the Factual Basis for the Adopted Rule 

The Electric Reliability Council of Texas, Inc. (ERCOT) manages the electrical grid 

within the ERCOT region of Texas, with oversight by the Public Utility Commission of 

Texas (PUCT). On March 22, 2012, the PUCT repealed 16 TAC §25.507, to replace the 

Emergency Interruptible Load Service (ElLS) program with the Emergency Response 

Service (ERS) program (16 TAC §25.507). Like the ElLS program, the new ERS program 

is designed to help decrease the likelihood of requiring firm load shedding (i.e., rolling 

black -outs) during an ERCOT -declared energy emergency by decreasing the power 

demand on the electrical grid. Under the ERS program, participants commit to decrease 

their power consumption from the electrical grid during a declared energy emergency. 

ERS program participants might meet this commitment by decreasing overall power 

use, replacing power consumption from the grid with local generation by operating local 

emergency backup generators, or a combination of both. However, unlike the ElLS 

program, the new ERS program allows qualified participants to provide power back into 

the electrical grid for sale during an ERCOT -declared emergency under limited 

1 
circumstances. 

Operating an emergency generator as part of ERCOT's former ElLS program meets the 

existing definition of an emergency situation in §117.10. The existing definition of an 

emergency situation in §117.10 includes the period of time that an emergency notice 

issued by ERCOT is applicable to the serving electric power generating system and 

references the specific ERCOT protocols that detail the emergency notice. However, the 

Chapter 117 definition of an emergency situation also specifically excludes operation for 

purposes of supplying power for distribution to the electrical grid. Therefore, operation 

of an emergency generator that also provides power back to the electrical grid would not 

be considered an emergency situation under the current Chapter 117 definition even if 

the operation were at the directive of ERCOT under the ERS program. 

While Chapter 117 would not prohibit companies from participating in the new ERS 

program, the Chapter 117 rules that apply in the Dallas-Fort Worth (DFW) and 

Houston-Galveston-Brazoria (HGB) 1997 eight-hour ozone nonattainment areas have 

specific provisions that restrict the non-emergency operational hours of emergency 

generators. For these sources to qualify for an exemption from the rule control 

requirements, participants in the ERS program would have to count hours of operation 

during an ERCOT emergency as non-emergency use if power is sold to the grid and 

might risk losing exemption status under Chapter 117 if the operational hours exceed the 

exemption criteria. 

The adopted rulemaking updates the definition of emergency situation in §117.10 to 

2 
ensure consistency with ERCOT's new ERS program. The adopted rulemaking 

references the version of the ERCOT protocols effective on June 1, 2012. The adopted 

rulemaking also revises the definition of emergency situation to reflect changes made by 

ERCOT to promote reliability during energy emergencies by allowing the operation of 

generators for purposes of selling power to the electric grid under limited 

circumstances. 

The amendment to §117.10 is adopted concurrently with an amendment to 30 TAC 

§101.379 that will be published in a separate rulemaking in this issue of the Texas 

Register. 

Demonstrating Noninterference under Federal Clean Air Act, Section no(l) 

The commission provides the following information to demonstrate why the adopted 

change to the definition of emergency situation in Chapter 117 will not negatively impact 

the status of the state's progress towards attainment with the 1997 eight-hour ozone 

National Ambient Air Quality Standard (NAAQS), will not interfere with control 

measures, and will not prevent reasonable further progress toward attainment of the 

ozone NAAQS. 

As mentioned elsewhere in this preamble, the Chapter 117 rules exempt certain sources 

in the DFW and HGB 1997 eight-hour ozone nonattainment areas that operate 

exclusively during emergency situations or operate for a limited number of hours in 

non-emergency situations. Under the existing Chapter 117 rules, the period of time 

during an ERCOT -declared emergency is considered an emergency situation. The 

3 
commission has interpreted this to mean that when demonstrating compliance with the 

Chapter 117 exemption criteria, participants in ERCOT's former ElLS program were not 

required to include the hours of operation for generators operated during an ERCOTdeclared emergency as non-emergency operation. 

ERCOT's new ERS program promotes reliability during energy emergencies by allowing 

qualified participants to provide power for distribution to the electrical grid during an 

ERCOT-declared emergency. Under the existing Chapter 117 rules, participants in 

ERCOT's new ERS program are not required to include the hours of operation for 

generators operated during an ERCOT -declared emergency when demonstrating 

compliance with the Chapter 117 exemption criteria as long as these sources do not 

provide power for distribution to the electrical grid. Because the existing Chapter 117 

definition of an emergency situation specifically excludes operation for purposes of 

supplying power for distribution to the electrical grid, ERS program participants would 

have to count hours of operation during an ERCOT -declared emergency when 

demonstrating compliance with the Chapter 117 exemption criteria if power is provided 

back into the grid. This practice could result in ERS program participants losing 

exemption status under Chapter 117 if the non-emergency hours exceed the exemption 

criteria and potentially discourage ERS program participants from supplying excess 

generation back to the grid during an ERCOT -declared energy emergency. The adopted 

rulemaking prevents ERS program participants from potentially losing exemption status 

under Chapter 117 if they provide power to the electrical grid during an ERCOT -declared 

emergency. The adopted rulemaking ensures that the changes made to ERCOT's new 

ERS program do not narrow the scope of what the commission currently considers an 

4 
emergency situation. 

The period of time during an ERCOT -declared emergency is currently considered an 

emergency situation under the existing Chapter 117 rules. The adopted revisions to the 

definition of emergency situation limit the circumstances under which a generator could 

provide power for distribution to the electrical grid to only those operations that are part 

of ERCOT's ERS program and in direct response to an instruction by ERCOT during the 

period of an ERCOT energy emergency alert (EEA). Therefore, the adopted amendment 

does not increase the number of sources that could qualify for exemption under the 

Chapter 117 rules or increase the frequency or duration of the operation during an 

emergency situation. For these reasons, the commission determined that the adopted 

rulemaking will not negatively impact the status of the state's attainment with the 1997 

eight-hour ozone NAAQS and should not be considered as backsliding under the Federal 

Clean Air Act (FCAA). 

Section Discussion 

The commission adopts amendments to the definition of emergency situation in 

§117.10(15). The commission revises §117.10(15)(A)(ii) to reference the version of the 

ERCOT Protocols effective June 1, 2012. Additionally, in response to ERCOT's 

comments on this rulemaking, the commission is revising the definition of emergency 

situation in §117.10(15)(A)(ii) to also include operations in response to an ERCOT EEA. 

The commission is making this change to ensure the definition of emergency situation 

includes situations when system conditions deteriorate so rapidly that it is not possible 

for ERCOT to issue an emergency notice prior to declaring an EEA and subsequently 

5 
deploying ERS. 

The commission adopts §117.10(15)(A)(vii) to include operation of an emergency 

generator as part of ERCOT's ERS program when the operation is in direct response to 

an instruction by ERCOT during the period of an ERCOT EEA as specified in 

§117.10(15)(A)(ii). In response to ERCOT's comments on this rulemaking, the 

commission is revising the proposed language in §117.10(15)(A)(vii) to refer to only 

those operations that occur during the period of an ERCOT EEA instead of the period of 

an ERCOT emergency notice. The intent of this rulemaking is to limit the circumstances 

under which an emergency generator can provide power for distribution to the electrical 

grid to only those operations that are part of ERCOT's ERS program and in direct 

response to ERCOT's dispatch instruction during the period of an ERCOT EEA. ERCOT 

only deploys ERS resources during an EEA, so it is unnecessary for the commission to 

refer to the period during an ERCOT emergency notice. 

The commission also adopts the reformatting of the existing §117.10(15)(B) description 

of the situations that are not considered emergency situations. Adopted clause (i) 

incorporates the existing portion of the definition indicating that an emergency situation 

does not include operation for training purposes or other foreseeable events. Existing 

§117.10(15)(B) indicates that an emergency situation does not include operation for 

purposes of supplying power for distribution to the electric grid. Adopted clause (ii) 

indicates that an emergency situation does not include operation for purposes of 

supplying power for distribution to the electric grid except as specified under 

§117.10(15)(A)(vii). The intent of adopted §117.10(15)(B)(ii) is to limit the circumstances 

6 
under which an emergency generator can provide power for distribution to the electrical 

grid to only those operations that are part of ERCOT's ERS program and in direct 

response to ERCOT's dispatch instruction during the period of an ERCOT EEA. Adopted 

clause (ii) is necessary to reflect changes made by ERCOT to promote reliability during 

energy emergencies by allowing the operation of generators for purposes of selling 

power to the electric grid under limited circumstances. 

Final Regulatory Impact Determination 

The commission reviewed the adopted rule in light of the regulatory analysis 

requirements of Texas Government Code, §2001.0225 and determined that the adopted 

rulemaking does not meet the definition of a major environmental rule. Texas 

Government Code, §2001.0225 states that a major environmental rule is a rule for 

which the specific intent is to protect the environment or reduce risks to human health 

from environmental exposure and that may adversely affect in a material way the 

economy, a sector of the economy, productivity, competition, jobs, the environment, or 

the public health and safety of the state or a sector of the state. Furthermore, while the 

adopted rulemaking does not constitute a major environmental rule, even if it did, a 

regulatory impact analysis would not be required because the adopted rulemaking does 

not meet any of the four applicability criteria for requiring a regulatory impact analysis 

for a major environmental rule. Texas Government Code, §2001.0225 applies only to a 

major environmental rule that: 1) exceeds a standard set by federal law, unless the rule 

is specifically required by state law; 2) exceeds an express requirement of state law, 

unless the rule is specifically required by federal law; 3) exceeds a requirement of a 

delegation agreement or contract between the state and an agency or representative of 

7 
the federal government to implement a state and federal program; or 4) adopts a rule 

solely under the general powers of the agency instead of under a specific state law. 

Specifically, it does not meet any of the four applicability criteria listed in Texas 

Government Code, §2001.0225 because: 1) the adopted rulemaking is part of the SIP, 

and as such is designed to meet, not exceed the relevant standard set by federal law; 2) 

parts of the adopted rule making are directly required by state law; 3) no contract or 

delegation agreement covers the topic that is the subject of this adopted rulemaking; 

and 4) the adopted rulemaking is authorized by specific sections of Texas Health and 

Safety Code (THSC), Chapter 382 (also known as the Texas Clean Air Act), and the 

Texas Water Code, which are cited in the Statutory Authority section of this preamble. 

The adopted rule implements requirements of the FCAA. Under 42 United States Code 

(USC), §7410, each state is required to adopt and implement a SIP containing adequate 

provisions to implement, attain, maintain, and enforce the NAAQS within the state. 

While 42 USC, §7410 generally does not require specific programs, methods, or 

reductions in order to meet the standard, SIPs must include enforceable emission 

limitations and other control measures, means, or techniques (including economic 

incentives such as fees, marketable permits, and auctions of emissions rights), as well as 

schedules and timetables for compliance as may be necessary or appropriate to meet the 

applicable requirements of this chapter (meaning 42 USC, Chapter 85, Air Pollution 

Prevention and Control, otherwise known as the FCAA). The provisions of the FCAA 

recognize that states are in the best position to determine what programs and controls 

are necessary or appropriate in order to meet the NAAQS. This flexibility allows states, 

affected industry, and the public to collaborate on the best methods for attaining the 

8 
NAAQS for the specific regions in the state. Even though the FCAA allows states to 

develop their own programs, this flexibility does not relieve a state from developing a 

program that meets the requirements of 42 USC, §7410. States are not free to ignore the 

requirements of 42 USC, §7410, and must develop programs and control measures to 

assure that their SIPs provide for implementation, attainment, maintenance, and 

enforcement of the NAAQS within the state. The specific intent of the adopted 

rulemaking is merely an update to the definition of emergency situation in §117.10, 

ensuring consistency with ERCOT's new ERS program while also reflecting changes 

made by ERCOT to promote reliability during energy emergencies throughout the state 

under limited circumstances. 

While the adopted rulemaking protects the environment or reduces risks to human 

health from environmental exposure, it does not constitute a major environmental rule 

under Texas Government Code, §2001.0225(g)(3) because it does not adversely affect in 

a material way the economy, a sector of the economy, productivity, competition, or jobs, 

nor would the rulemaking adversely affect in a material way the environment, or the 

public health and safety of the state or a sector of the state. The rule making as a result is 

not subject to a regulatory impact analysis under Texas Government Code, §2001.0225 

because it is not a major environmental rule. 

The requirement to provide a fiscal analysis of regulations in the Texas Government 

Code was amended by Senate Bill (SB) 633, 75th Legislature, 1997. The intent of SB 633 

was to require agencies to conduct a regulatory impact analysis of extraordinary rules. 

These are identified in the statutory language as major environmental rules that will 

9 
have a material adverse impact and will exceed a requirement of state law, federal law, 

or a delegated federal program; or are adopted solely under the general powers of the 

TCEQ. With the understanding that this requirement would seldom apply, the 

commission provided a cost estimate for SB 633 that concluded: based on an 

assessment of rules adopted by the agency in the past, it is not anticipated that the bill 

will have significant fiscal implications for the agency due to its limited application. The 

commission also noted that the number of rules that would require assessment under 

the provisions of the bill was not large. This conclusion was based, in part, on the 

criteria set forth in the bill that exempted rules from the full analysis unless the rule was 

a major environmental rule that exceeded a federal law. 

The FCAA does not always require specific programs, methods, or reductions in order to 

meet the NAAQS; thus, states must develop programs for each nonattainment area to 

help ensure that those areas will meet the attainment deadlines. Because of the ongoing 

need to address nonattainment issues and to meet the requirements of 42 USC, §7410, 

the commission routinely proposes and adopts revisions to the SIP and rules. The 

legislature is presumed to understand this federal scheme. If each rule adopted for 

inclusion in the SIP were considered to be a major environmental rule that exceeds 

federal law, then every revision to the SIP would require the full regulatory impact 

analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions 

reached by the commission in its cost estimate and by the Legislative Budget Board 

(LBB) in its fiscal notes. Since the legislature is presumed to understand the fiscal 

impacts of the bills it passes and that presumption is based on information provided by 

state agencies and the LBB, the commission believes that the intent of SB 633 was only 

10 
to require the full regulatory impact analysis for rules that are extraordinary in nature. 

While the rules have a broad impact, that impact is no greater than is necessary or 

appropriate to meet the requirements of the FCAA. For these reasons, rules adopted for 

inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a), 

because they are required by federal law. 

The commission has consistently applied this construction to its rules since this statute 

was enacted in 1997. Since that time, the legislature has revised the Texas Government 

Code but left this provision substantially unamended. It is presumed that, when an 

agency interpretation is in effect at the time the legislature amends the laws without 

making substantial change in the statute, the legislature is deemed to have accepted the 

agency's interpretation. Central Power & Light Co. v. Sharp, 919 S.W.2d 485, 489 (Tex. 

App. Austin 1995), writ denied with per curiam opinion respecting another issue, 960 

S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. 

Austin 1990, no writ) superseded by statute on another point of law, Tax Code 

§112.108, Other Actions Prohibited, as recognized in, First State Bank of Dumas v. 

Sharp, 863 S.W.2d 81, 83 (Tex. App. Austin 1993, no writ) ; Cf Humble Oil & Refining 

Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co., 9 

S.W.3d 884, 893 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 

24 S.W.3d 581 (Tex. App. Austin 2000, pet. denied); and Coastal Indust. Water Auth. v. 

Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978). 

The commission's interpretation of the regulatory impact analysis requirements is also 

supported by a change made to the Texas Administrative Procedure Act (AP A) by the 

11 
legislature in 1999. In an attempt to limit the number of rule challenges based upon APA 

requirements, the legislature clarified that state agencies are required to meet these 

sections of the APA against the standard of substantial compliance as required in Texas 

Government Code, §2001.035. The legislature specifically identified Texas Government 

Code, §2001.0225 as falling under this standard. The commission has complied with the 

requirements of Texas Government Code, §2001.0225. 

Even if the adopted rulemaking constitutes a major environmental rule under Texas 

Government Code, §2001.0225(g)(3), a regulatory impact analysis is not required 

because this exemption is part of the commission's SIP for making progress toward the 

attainment and maintenance of the NAAQS. Therefore, the adopted rulemaking does 

not exceed a standard set by federal law or exceed an express requirement of state law, 

since they are part of an overall regulatory scheme designed to meet, not exceed the 

relevant standard set by federal law (NAAQS). The commission is charged with 

protecting air quality within the state and to design and submit a plan to achieve 

attainment and maintenance of the federally mandated NAAQS. The Third District 

Court of Appeals upheld this interpretation in Brazoria County v. Texas Comm'n on 

Envtl. Quality, 128 S.W. 3d 728 (Tex. App. -Austin 2004, no writ). The specific intent of 

the adopted rulemaking is merely an update to the definition of emergency situation in 

§117.10, ensuring consistency with ERCOT's new ERS program while also reflecting 

changes made by ERCOT to promote reliability during energy emergencies throughout 

the state under limited circumstances. This adoption, therefore, does not exceed an 

express requirement of federal law. The amendment is needed to implement state law 

but does not exceed those new requirements. Finally, this rulemaking was not developed 

12 
solely under the general powers of the agency but is authorized by specific sections of 

THSC, Chapter 382, which are cited in the Statutory Authority section of this preamble, 

including THSC, §382.012 and §382.019. Because this adopted rulemaking does not 

meet any of the four applicability requirements, Texas Government Code, 

§2001.0225(b) does not apply and a regulatory impact analysis is not required. 

The commission invited public comment regarding the draft regulatory impact analysis 

determination during the public comment period. No comments were received on the 

regulatory impact analysis determination. 

Takings Impact Assessment 

The commission evaluated the adopted rulemaking and performed an analysis of 

whether the adopted rulemaking constitutes a taking under Texas Government Code, 

Chapter 2007. The commission's preliminary assessment indicates Texas Government 

Code, Chapter 2007 does not apply. 

Under Texas Government Code, §2007.002(5), taking means: "(A) a governmental 

action that affects private real property, in whole or in part or temporarily or 

permanently, in a manner that requires the governmental entity to compensate the 

private real property owner as provided by the Fifth and Fourteenth Amendments to the 

United States Constitution or Section 17 or 19, Article I, Texas Constitution; or (B) a 

governmental action that: (i) affects an owner's private real property that is the subject 

of the governmental action, in whole or in part or temporarily or permanently, in a 

manner that restricts or limits the owner's right to the property that would otherwise 

13 
exist in the absence of the governmental action; and (ii) is the producing cause of a 

reduction of at least 25 percent in the market value of the affected private real property, 

determined by comparing the market value of the property as if the governmental action 

is not in effect and the market value of the property determined as if the governmental 

action is in effect." 

Promulgation and enforcement of the rulemaking would be neither a statutory nor a 

constitutional taking of private real property. The primary purpose of the rule is an 

update to Chapter 117, Subchapter A to ensure consistency with ERCOT's new ERS 

program. This rule is not burdensome, restrictive, or limiting of rights to private real 

property because the rulemaking regulates the use of electric generators in certain 

limited emergency situations. Furthermore, the rulemaking benefits the public by 

potentially decreasing the likelihood of requiring firm load shedding (i.e., rolling blackouts) when additional control measures are needed to achieve or maintain attainment of 

the federal air quality standards through the use of electric generators. The rulemaking 

does not affect a landowner's rights in private real property because this rulemaking 

does not burden, restrict, or limit the owner's right to property, nor does it reduce the 

value of any private real property by 25% or more beyond that which would otherwise 

exist in the absence of the regulations. Therefore, this rule does not constitute a taking 

under Texas Government Code, Chapter 2007. 

Consistency with the Coastal Management Program 

The commission reviewed the adopted rulemaking and found that it is subject to the 

Texas Coastal Management Program (CMP) in accordance with the Coastal 

Coordination Act, Texas Natural Resources Code, §§33.201 et seq., and therefore must 

14 
be consistent with all applicable CMP goals and policies. The commission conducted a 

consistency determination for the adopted rule in accordance with Coastal Coordination 

Act Implementation Rules, 31 TAC §505.22 and found the adopted rulemaking is 

consistent with the applicable CMP goals and policies. 

The CMP goal applicable to the adopted rulemaking is the goal to protect, preserve, and 

enhance the diversity, quality, quantity, functions, and values of coastal natural resource 

areas (31 TAC §501.12(1)). The CMP policy applicable to the adopted rulemaking is the 

policy that commission rules comply with federal regulations in 40 Code of Federal 

Regulations to protect and enhance air quality in the coastal areas (31 TAC §501.32). 

The adopted rulemaking will not increase emissions of air pollutants and is therefore, 

consistent with the CMP goal in 31 TAC §501.12(1) and the CMP policy in 31 TAC 

§501.32. 

Promulgation and enforcement of this rule will not violate or exceed any standards 

identified in the applicable CMP goals and policies because the adopted rule is 

consistent with these CMP goals and policies and because the rule does not create or 

have a direct or significant adverse effect on any coastal natural resource areas. 

Therefore, in accordance with §505.22(e), the commission affirms that this rulemaking 

action is consistent with CMP goals and policies. 

The commission invited public comment regarding the consistency with the CMP during 

the public comment period. The commission received no comments concerning the 

consistency of this rule making with the Texas CMP. 

15 
Effect on Sites Subject to the Federal Operating Permits Program 

The adopted amendment will not require any changes to federal operating permits. 

Public Comment 

The commission scheduled a public hearing in Austin on November 28, 2012. However, 

the commission did not officially open the hearing because no one registered to provide 

comments. The public comment period closed on December 5, 2012. The commission 

received comments from the Association of Electric Companies of Texas (AECT), Blue 

Sky Environmental LLC (Blue Sky), Calpine Corporation (Calpine), EnerNOC, Inc. 

(EnerNOC), EPA, ERCOT, Exelon Corporation (Exelon), and NRG Texas Power LLC, 

(NRG). AECT submitted comments on behalf of AEP Texas, CenterPoint Energy, El 

Paso Electric, Entergy, GDF SUEZ, Nextera Energy, Lone Star Transmission, Oncor, 

TXU Energy, Luminant, NRG, Reliant, TNMP, and Xcel Energy. 

Response to Comments 

Comment 

AECT, Blue Sky, EnerNOC, ERCOT, and NRG expressed support for the proposed 

revisions to the definition of emergency situation in §117.10. EPA expressed 

appreciation for efforts to update the references to ERCOT's protocols in §117.10. 

Response 

The commission appreciates the support. 

16 
Comment 

ERCOT commented that if system conditions deteriorate too rapidly it might not be 

possible to issue an emergency notice prior to declaring an EEA and subsequently 

deploying ERS. ERCOT recommended the commission amend §117.10(15)(A)(ii) to refer 

to ERCOT's dispatch of ERS rather than the issuance of an emergency notice to provide 

affected generators assurance that operation for ERS is always permissible. 

Blue Sky and EnerNOC recommended the commission not revise the definition of 

emergency situation to specify an ERCOT EEA level to account for emergency demand 

response programs initiated by Texas utilities that are experiencing voltage reductions. 

Response 

The intent of §117.10(15)(A)(ii) is to specify that emergency situations 

include operations during an ERCOT -declared emergency not operations 

during a utility-declared emergency. The commission agrees with ERCOT 

that operations in response to ERCOT's dispatch ofERS are always 

considered emergency situations. However, it is possible that the existing 

provision in §117.10(15)(A)(ii) could affect sources that are not participating 

in ERCOT's ERS program but are operating as a result of an ERCOTdeclared emergency. Therefore, the commission is retaining the reference 

to emergency notice in §117.10(15)(A)(ii) to avoid unintended consequences 

that could result from limiting this provision solely to ERS operations. In 

response to ERCOT's comments, the commission is revising the definition 

of emergency situation to also include operations in response to an ERCOT 

17 
EEA. The commission is making this change to ensure the definition of 

emergency situation includes situations when system conditions 

deteriorate so rapidly that it is not possible for ERCOT to issue an 

emergency notice prior to declaring an EEA and subsequently deploying 

ERS. In response to ERCOT's comments the commission is revising the 

proposed language in §117.10(15)(A)(vii) to refer to only those operations 

that occur during the period of an ERCOT EEA instead of the period of an 

ERCOT emergency notice. The purpose of this rulemaking is to ensure that 

participants in the ERS program may still claim operational hours during 

such energy emergencies as an emergency situation under Chapter 117 

rules. However, the adopted rule is also intended to limit the circumstances 

under which an emergency generator can provide power for distribution to 

the electrical grid to only those operations that are part of ERCOT's ERS 

program and in direct response to ERCOT's dispatch instruction during the 

period of an ERCOT EEA. Since ERCOT only deploys ERS resources during 

an EEA, it is unnecessary for the commission to refer to the period during 

an ERCOT emergency notice. 

Comment 

To address concerns about the certainty of the circumstances under which ERCOT will 

deploy ERS resources, ERCOT recommended that the commission reference the PUCT's 

ERS rule in 16 TAC §25.507 rather than the ERCOT Nodal Protocols referenced in the 

proposed rules. ERCOT expressed concern that the frequent revisions to the Nodal 

Protocols could create confusion as to the applicability of §117.10(15)(A)(ii) and 

18 
§101.379(c)(2)(D). ERCOT suggested the commission could more easily monitor the 

infrequent changes to the PUCT rules than the numerous ongoing proposals to revise 

the ERCOT Nodal Protocols referenced in the proposed rules. 

NRG also recommended avoiding references to specific ERCOT protocols that are likely 

to change periodically. NRG recommended modifying §117.10(15)(A)(ii) to instead refer 

to the period of time that an engine is operating in response to an ERCOT -issued 

emergency notice of imminent emergency conditions, such as unusually low frequency, 

equipment overload, capacity or energy deficiency, or unacceptable voltage level. 

Response 

The commission is aware that the ERCOT Nodal Protocols references in 

§117.10(15) are frequently revised and have been revised since the 

commission first proposed this rulemaking. However, §117.10(15) and the 

Chapter 117 rules that reference this term are a part of the SIP and the 

revised §117.10(15) is subject to EPA review and approval. Specificity is 

needed in the rule regarding the circumstances under which ERCOT will 

deploy ERS resources to help ensure EPA approval of the revised rule. 

While the PUCT's ERS rule in 16 TAC §25.507 speaks to the intent of 

deploying the ERS program during an EEA event and authorizes ERCOT to 

create the ERS program, 16 TAC §25.507 does not provide specific 

restrictions on the deployment of the ERS program to emergencies only. 

The level of detail in the current 16 TAC §25.507 is not sufficient to ensure 

that the definition in §117.10(15) does not include the dispatch ofERS 

19 
outside of ERCOT's-declared energy emergencies. Likewise, the suggested 

description of an ERCOT -issued emergency notice of imminent emergency 

conditions does not sufficiently detail the specific circumstances under 

which ERCOT will deploy ERS resources. To ensure that the amendments to 

§117 .10(15) can be approved by the EPA as part of the SIP, the commission 

respectfully declines to make the suggested changes. 

Comment 

AECT commented that because it has concerns about how the use of the term "demand 

response" has been expanded to include non-emergency situations, AECT supports 

limiting the definition of emergency situation to those operations that are part of an 

ERCOT ERS program and are in direct response to an instruction by ERCOT during the 

period of an ERCOT emergency notice. NRG recommended that this rule only apply to 

units in emergency demand response programs that are limited to rare instances where 

grid stability is threatened after all other potential remedies have been exhausted. 

To account for emergency demand response programs initiated by Texas utilities that 

are experiencing voltage reductions, Blue Sky and EnerNOC recommended the 

commission revise the definition of emergency situation to also include operation in 

response to a utility-declared emergency. 

Response 

The commission agrees that the definition of emergency situation should 

include operations in direct response to an instruction by ERCOT during 

20 
the period of an ERCOT -declared emergency. As discussed elsewhere in the 

Response to Comments section of the preamble, the commission is also 

revising the proposed rule language to include operations that are in direct 

response to an instruction by ERCOT during the period of an ERCOT EEA. 

The commission does not agree that the definition of emergency situation 

should include operations that occur in response to a utility-declared 

emergency. The suggested change would decrease the stringency of the 

existing rule by expanding the scope of the current definition to include 

additional situations that would not currently be considered emergency 

situations. Because the EPA has approved the existing rule as part of the 

SIP, the suggested expansion of the definition could be considered 

backsliding and result in the EPA's disapproval of the rulemaking. The 

commission makes no change in response to these comments. 

Comment 

Blue Sky and EnerNOC recommended the commission provide guidance regarding the 

SIP process. The commenters also requested the commission confirm that the following 

assumptions are correct: 1) the revisions to §117.10 will not be fully implemented until 

the EPA approves the SIP revision; 2) engines participating in the ERS and other utilitysponsored emergency demand response programs without sending power to the electric 

grid can continue to operate under the definition of emergency situation until the 

references to the appropriate protocols are changed; and 3) emergency engines could 

not send power to the electric grid under an emergency situation until the SIP revision is 

21 
approved. 

Response 

The Texas Water Code authorizes the commission to propose and adopt 

rules necessary to carry out its powers and duties. Once adopted, the 

commission files the rule with the Secretary of State for publication in the 

Texas Register. This action usually occurs the first Friday after adoption. 

The rule becomes effective 20 calendar days after filing and is fully 

enforceable by the commission from that time on irrespective of EPA 

approval of the rule revision as part of the SIP. Therefore, beginning on the 

effective date of the rule, the definition of emergency situation will include 

operations in direct response to an instruction by ERCOT during the period 

of an ERCOT -declared emergency that supply power to the electric grid. As 

discussed elsewhere in the Response to Comments section of the preamble, 

the definition of emergency situation in §117.10 includes operations during 

an ERCOT -declared emergency but does not include other utility-sponsored 

emergency demand response programs. 

Comment 

Calpine recommended the commission remove the exemption afforded to ERS 

participants and require that all commercial generation to meet best available control 

technology and reasonably available control technology requirements. Exelon requested 

the commission abandon its efforts to exempt from pollution controls units that sell 

power back to the electrical grid and require all commercial generation to satisfy the 

22 
commission's pollution control requirements. 

Calpine and Exelon commented that exempting commercial backup generation from air 

quality regulations would negatively affect air quality by expanding the number of highemitting diesel engines; discouraging investment in new, low-emitting generation; and 

providing an unnecessary subsidy to high-emitting sources. Calpine also commented 

that the proposed rule might not benefit electric reliability. 

Response 

The commenters' suggested changes to revoke exemptions for emergency 

backup generators are outside the scope of this rulemaking. The Chapter 

117 rules exempt certain sources in the DFW and HGB 1997 eight-hour 

ozone nonattainment areas that operate exclusively during emergency 

situations or operate for a limited number of hours in non-emergency 

situations. The exemptions that reference the definition of emergency 

situation for this purpose were not proposed for revision with this 

rule making. 

The intent of the existing Chapter 117 rules is to ensure that operation 

during an ERCOT -declared emergency is not considered non-emergency 

operation when demonstrating compliance with the Chapter 117 exemption 

criteria. Under ERCOT's former ElLS program, affected resources reduced 

electric consumption by using on-site backup generation but did not supply 

power to the electric grid. Therefore, the restriction on supplying power for 

23 
distribution to the electric grid in §117.10(15)(B) did not affect ElLS 

program participants. The amendments to §117.10(15) ensure that the 

changes made to ERCOT's new ERS program, which allow participants to 

provide power for distribution to the electrical grid, do not narrow the 

scope of what the commission currently considers an emergency situation. 

The adopted rulemaking does not relieve affected sources from the 

obligation to meet any air quality regulation that currently applies. 

The commission does not agree that the revisions to §117.10(15) will 

negatively affect air quality by expanding the number of high-emitting 

diesel engines, discouraging investment in low-emitting generation, or 

subsidizing high-emitting sources. The dispatch of ERS resources is limited 

to rare instances where the reliability of the ERCOT system is threatened 

and all other potential solutions have been exhausted. ERCOT has 

dispatched emergency response resources for a total of 30 hours since 

2006. Operation of emergency generators during an ERCOT -declared 

emergency under the previous ElLS program was considered an emergency 

situation under the existing Chapter 117 rules. The adopted revisions to 

§117.10(15) are intended to clarify the definition with regard to such 

emergencies and account for the revisions that ERCOT has made in the new 

ERS program. Adopted §117.10(15)(B)(ii) only allows operation of an 

emergency generator for supplying power to the electrical grid to be 

considered an emergency situation if the operation is part of ERCOT's ERS 

program and in direct response to instruction by ERCOT during an EEA. 

24 
The purpose of this rule making is to ensure that participants in the ERS 

program may still claim operational hours during such energy emergencies 

as an emergency situation under Chapter 117 rules. Therefore, the 

commission does not consider the rulemaking as expanding the number of 

stationary diesel engines in operation or as providing a subsidy for diesel 

engines. Additionally, owners and operators of emergency generators that 

seek exemption from Chapter 117 rules must still meet all applicable criteria 

before qualifying for an exemption. The commission has previously 

incorporated provisions in the exemption criteria for emergency stationary 

diesel engines to help ensure that emissions from exempt diesel engines are 

minimized. For example, as part of the exemption criteria, stationary diesel 

engines in the DFW and HGB areas that are installed, modified, 

reconstructed, or relocated after specific dates in the Chapter 117 rules are 

required to meet the corresponding emission standards for non-road 

engines in 40 Code of Federal Regulations §89.112(a), Table 1, that are in 

effect at the time the engine was installed, modified, reconstructed, or 

relocated. 

While the commission cannot quantify the effects of this revision on electric 

reliability, the commission does not agree with the commenters' assertion 

that there is no reliability-related rationale for this rulemaking. ERCOT's 

new ERS program promotes reliability during energy emergencies by 

allowing qualified participants to provide power for distribution to the 

electrical grid during an ERCOT -declared emergency. As discussed 

25 
elsewhere in the Response to Comments Section of this preamble, the 

purpose of this rule making is to ensure that participants in the ERS 

program continue to be allowed to count operation in response to an 

ERCOT -declared emergency as an emergency situation. While the adopted 

revisions to §117.10(15) do not directly promote reliability, the rulemaking 

helps ensure that Chapter 117 rules will not be a disincentive to the ERS 

program by forcing participants to count emergency operation as nonemergency hours. The commission makes no changes in response to these 

comments. 

Comment 

ERCOT commented that since the operation of a generator for ERS purposes would 

always fall within the coverage of §117.10(15)(A)(ii), creating an additional exemption 

for the operation of ERS generators in §117.10(15)(A)(vii) is unnecessary. ERCOT 

suggested deleting §117.10(15)(A)(vii) and revising §117.10(15)(B)(ii) to reference 

§117.10(15)(A)(ii) instead of §117.10(15)(A)(vii). 

NRG supported explicitly including emergency demand response events under the 

definition of emergency situation. However, instead of adding this language as a new 

provision under §117.10(15)(A)(vii), NRG recommended modifying §117.10(15)(A)(ii) to 

the period of time that an engine is operating in response to an ERCOT-issued 

emergency notice of imminent emergency conditions, such as unusually low frequency, 

equipment overload, capacity or energy deficiency, or unacceptable voltage level. 

26 
Response 

The intent of this rule making is to limit the circumstances under which an 

emergency generator can provide power for distribution to the electrical 

grid to only those operations that are both part of ERCOT's ERS program 

and in direct response to ERCOT's dispatch instruction during the period of 

an ERCOT EEA. It is possible that the existing provision in §117.10(15)(A)(ii) 

could affect sources that are not participating in ERCOT's ERS program but 

are operating as a result of an ERCOT -declared emergency. The commission 

is adding the additional detail in §117.10(15)(A)(vii) and (B)(ii) to explicitly 

limit the circumstances under which an emergency generator could provide 

power for distribution to the electrical grid to only those operations that are 

part of ERCOT's ERS program. The commission makes no change in 

response to these comments. 

As discussed elsewhere in the Response to Comments section of this 

preamble, in response to ERCOT's comments the commission is revising 

the proposed language in §117.10(15)(A)(vii) to refer to only those 

operations that occur during the period of an ERCOT EEA instead of the 

period of an ERCOT emergency notice. The intent of this rule making is to 

limit the circumstances under which an emergency generator can provide 

power for distribution to the electrical grid to only those operations that are 

part of ERCOT's ERS program and in direct response to ERCOT's dispatch 

instruction during the period of an ERCOT EEA. ERCOT only deploys ERS 

resources during an EEA, so it is unnecessary for the commission to refer to 

27 
the period during an ERCOT emergency notice. 

Comment 

NRG stated its belief that the current Chapter 117 definition of emergency situation does 

not preclude an engine from operating as part of an emergency demand response 

program and the intent of §117.10(15)(B) was to prevent those engines that supply power 

for distribution to the grid for economic gain unrelated to imminent emergency 

conditions from being classified as emergency engines, thus avoiding environmental 

controls. As such, NRG supported TCEQ's proposal to explicitly differentiate between 

these two operating scenarios and recommended §117.10(15)(B) be amended as 

proposed by the commission. 

Response 

The commission appreciates the support and made no changes to the 

rulemaking in response to this comment. 

Comment 

NRG supported aligning the Chapter 117 definition of emergency situation 

with ERCOT's emergency demand response program in lieu of establishing 

an annual limit on emergency demand response operation to allow ERCOT 

to manage and optimize emergency demand response operations. 

Response 

The commission appreciates the support. 

28 
RECOMMENDATION 
SUBCHAPTER H: EMISSIONS BANKING AND TRADING 

DIVISION 4: DISCRETE EMISSION CREDIT 

BANKING AND TRADING 

§101.379 

Statutory Authority 

The amendment is adopted under the authority of the following: Texas Water Code 

(TWC), §5.102, General Powers, TWC, §5.103, Rules, and TWC, §5.105, General Policy 

(these provisions authorize the commission to adopt rules necessary to carry out its 

powers and duties as well as all general policies under the TWC); Texas Health and 

Safety Code (THSC), §382.017, Rules, which authorizes the commission to adopt rules 

consistent with the policy and purposes of the Texas Clean Air Act; THSC, §382.002, 

Policy and Purpose, which establishes the commission's purpose to safeguard the state's 

air resources, consistent with the protection of public health, general welfare, and 

physical property; THSC, §382.011, General Powers and Duties, which authorizes the 

commission to control the quality of the state's air; THSC, §382.012, State Air Control 

Plan, which authorizes the commission to prepare and develop a general, 

comprehensive plan for the control of the state's air; and THSC, §382.051(d), Permitting 

Authority of Commission; Rules, which authorizes the commission to adopt rules as 

necessary to comply with changes in federal law or regulations applicable to permits 

under THSC, Chapter 382. Finally, the amendment is also adopted under Federal Clean 

Air Act (FCAA), 42 United States Code (USC), §§7401, et seq., which requires states to 

submit state implementation plan revisions that specify the manner in which the 

1 
National Ambient Air Quality Standards will be achieved and maintained within each air 

quality control region of the state. 

The adopted amendment implements TWC, §§5.102, 5.103, and 5.105; THSC, 

§§382.002, 382.011, 382.012, 382.016, 382.017, and 382.021; and FCAA, 42 USC, 

§§7401, et seq. 

§101.379. Program Audits and Reports. 

(a) No later than three years after the effective date of this section, and every 

three years thereafter, the executive director will audit this program. 

(1) The audit will evaluate the timing of credit generation and use, the 

impact of the program on the state's attainment demonstration and the emissions of 

hazardous air pollutants, the availability and cost of credits, compliance by the 

participants, and any other elements the executive director may choose to include. 

(2) The executive director will recommend measures to remedy any 

problems identified in the audit. The trading of discrete emission credits may be 

discontinued by the executive director in part or in whole and in any manner, with 

commission approval, as a remedy for problems identified in the program audit. 

2 
(3) The audit data and results will be completed and submitted to the 

United States Environmental Protection Agency and made available for public 

inspection within six months after the audit begins. 

(b) No later than February 1 of each calendar year, the executive director shall 

develop and make available to the general public and the United States Environmental 

Protection Agency a report that includes the following information for the previous 

calendar year: 

(1) the amount of each pollutant emission credits generated under this 

division; 

(2) the amount of each pollutant emission credits used under this division; 

(3) a summary of all trades completed under this division; and 

(4) the amount of discrete emission reduction credits (DERC) approved 

for use under subsection (c) of this section. 

(c) No later than October 1 of each year, the executive director will complete, and 

make available to the general public and the United States Environmental Protection 

Agency, an annual review to determine the number of DERCs available for potential use 

in the upcoming calendar year for the Dallas-Fort Worth (DFW) eight-hour ozone 

3 
nonattainment area. The annual review will include the calculation of the flow control 

limit as specified in subsection (c)(2)(A) of this section to ensure noninterference with 

attainment and maintenance of the ozone National Ambient Air Quality Standard 

(NAAQS) and the apportionment of approved DERCs. 

(1) For the 2009 control period, the flow control limit for DERCs available 

for use is the number prescribed in the DFW Eight-Hour Ozone Attainment 

Demonstration SIP Revision for the 1997 eight-hour ozone standard, in tons per day, 

not to be exceeded in any day, where a day is a 24-hour period from midnight to 

midnight. 

(2) For any control period after 2009, the annual review will establish a 

flow control limit for that year, in tons per day, not to be exceeded in any day, where a 

day is a 24-hour period from midnight to midnight. 

(A) The flow control limit for a particular year will be determined 

using the following equation: 

Figure: 30 TAC §101.379(c)(2)(A) (No change to the figure as it currently exists in TAC.) 

(B) If use of the entire DERC bank would not interfere with 

attainment and maintenance of the 1997 eight-hour ozone NAAQS in the DFW eighthour ozone nonattainment area, then the number of DERCs potentially available for use 

is the total number of DERCs in the bank. 

4 
(C) If the flow control limit, as calculated in the equation in 

subparagraph (A) of this paragraph, is greater than the total number ofDERCs 

requested for use in accordance with §101.376(d) of this title (relating to Discrete 

Emission Credit Use) the executive director: 

(i) may approve all requested Notice of Intent to Use 

Discrete Emission Credits (DEC-2 Form) submittals; and 

(ii) will consider any late DEC-2 Forms submitted as 

provided under §101.376(d)(3) of this title that is not an Electric Reliability Council of 

Texas, Inc. (ERCOT)-declared emergency situation as defined in subparagraph (D) of 

this paragraph, but will not otherwise approve a late submittal that would exceed the 

flow control limit established by the equation under subsection (c)(2)(A) of this section. 

(D) If the DEC-2 Forms are submitted in response to an ERCOTdeclared emergency situation, the request will not be subject to the flow control limit 

and may be approved provided all other requirements are met. For the purposes of this 

subparagraph, an ERCOT -declared emergency situation is defined as the period of time 

that an ERCOT -issued emergency notice or energy emergency alert (EEA) (as defined in 

ERGOT Nodal Protocols, Section 2: Definitions and Acronyms (June 1, 2012) and 

issued as specified in ERGOT Nodal Protocols, Section 6: Adjustment Period and RealTime Operations (June 1, 2012)) is applicable to the serving electric power generating 

5 
system. The emergency situation is considered to end upon expiration of the emergency 

notice or EEA issued by ERCOT. 

6 
Statutory Authority 

SUBCHAPTERA: DEFINITIONS 

§117.10 

The amendment is adopted under the authority of the following: Texas Water Code 

(TWC), §5.102, General Powers, TWC, §5.103, Rules, and TWC, §5.105, General Policy 

(these provisions authorize the commission to adopt rules necessary to carry out its 

powers and duties as well as all general policies under the TWC); Texas Health and 

Safety Code (THSC), Texas Clean Air Act (TCAA), §382.017, Rules, which authorizes the 

commission to adopt rules consistent with the policy and purposes of the TCAA; THSC, 

§382.002, Policy and Purpose, which establishes the commission's purpose to safeguard 

the state's air resources, consistent with the protection of public health, general welfare, 

and physical property; THSC, §382.011, General Powers and Duties, which authorizes 

the commission to control the quality of the state's air; and THSC, §382.012, State Air 

Control Plan, which authorizes the commission to prepare and develop a general, 

comprehensive plan for the control of the state's air; and THSC, §382.051( d), Permitting 

Authority of Commission; Rules, which authorizes the commission to adopt rules as 

necessary to comply with changes in federal law or regulations applicable to permits 

under THSC, Chapter 382. Finally, the amendment is also adopted under Federal Clean 

Air Act (FCAA), 42 United States Code (USC), §§7401, et seq., which requires states to 

submit State Implementation Plan revisions that specify the manner in which the 

National Ambient Air Quality Standards will be achieved and maintained within each air 

quality control region of the state. 

1 
The adopted amendment implements 1WC, §§5.102, 5.103, and 5.105; THSC, 

§§382.002, 382.011, 382.012, 382.016, 382.017, and 382.021; and FCAA, 42 USC, 

§§7401 et seq. 

§117.10. Definitions. 

Unless specifically defined in the Texas Clean Air Act or Chapter 101 of this title 

(relating to General Air Quality Rules), the terms in this chapter have the meanings 

commonly used in the field of air pollution control. Additionally, the following meanings 

apply, unless the context clearly indicates otherwise. Additional definitions for terms 

used in this chapter are found in §3.2 and §101.1 of this title (relating to Definitions). 

(1) Annual capacity factor--The total annual fuel consumed by a unit 

divided by the fuel that could be consumed by the unit if operated at its maximum rated 

capacity for 8,760 hours per year. 

(2) Applicable ozone nonattainment area--The following areas, as 

designated under the 1990 Federal Clean Air Act Amendments. 

(A) Beaumont-Port Arthur ozone nonattainment area--An area 

consisting of Hardin, Jefferson, and Orange Counties. 

2 
(B) Dallas-Fort Worth ozone nonattainment area--An area 

consisting of Collin, Dallas, Denton, and Tarrant Counties. 

(C) Dallas-Fort Worth eight-hour ozone nonattainment area--An 

area consisting of Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, 

and Tarrant Counties. 

(D) Houston-Galveston-Brazoria ozone nonattainment area--An 

area consisting of Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, 

Montgomery, and Waller Counties. 

(3) Auxiliary steam boiler--Any combustion equipment within an electric 

power generating system, as defined in this section, that is used to produce steam for 

purposes other than generating electricity. An auxiliary steam boiler produces steam as 

a replacement for steam produced by another piece of equipment that is not operating 

due to planned or unplanned maintenance. 

(4) Average activity level for fuel oil firing--The product of an electric 

utility unit's maximum rated capacity for fuel oil firing and the average annual capacity 

factor for fuel oil firing for the period from January 1, 1990, to December 31, 1993. 

3 
(5) Block one-hour average--An hourly average of data, collected starting 

at the beginning of each clock hour of the day and continuing until the start of the next 

clock hour. 

(6) Boiler--Any combustion equipment fired with solid, liquid, and/or 

gaseous fuel used to produce steam or to heat water. 

(7) Btu--British thermal unit. 

(8) Chemical processing gas turbine--A gas turbine that vents its exhaust 

gases into the operating stream of a chemical process. 

(9) Continuous emissions monitoring system (CEMS)--The total 

equipment necessary for the continuous determination and recordkeeping of process 

gas concentrations and emission rates in units of the applicable emission limitation. 

(10) Daily--A calendar day starting at midnight and continuing until 

midnight the following day. 

(n) Diesel engine--A compression-ignited two- or four-stroke engine that 

liquid fuel injected into the combustion chamber ignites when the air charge has been 

compressed to a temperature sufficiently high for auto-ignition. 

4 
(12) Duct burner--A unit that com busts fuel and that is placed in the 

exhaust duct from another unit (such as a stationary gas turbine, stationary internal 

combustion engine, kiln, etc.) to allow the firing of additional fuel to heat the exhaust 

gases. 

(13) Electric generating facility (EGF)--A unit that generates electric 

energy for compensation and is owned or operated by a person doing business in this 

state, including a municipal corporation, electric cooperative, or river authority. 

(14) Electric power generating system--One electric power generating 

system consists of either: 

(A) for the purposes of Subchapter C of this chapter (relating to 

Combustion Control at Major Utility Electric Generation Sources in Ozone 

Nonattainment Areas), all boilers, auxiliary steam boilers, and stationary gas turbines 

(including duct burners used in turbine exhaust ducts) at electric generating facility 

(EGF) accounts that generate electric energy for compensation; are owned or operated 

by an electric cooperative, municipality, river authority, public utility, or a Public Utility 

Commission of Texas regulated utility, or any of its successors; and are entirely located 

in one of the following ozone nonattainment areas: 

(i) Beaumont-Port Arthur; 

5 
(ii) Dallas-Fort Worth; 

(iii) Dallas-Fort Worth eight-hour; or 

(iv) Houston-Galveston-Brazoria; 

(B) for the purposes of Subchapter E, Division 1 of this chapter 

(relating to Utility Electric Generation in East and Central Texas), all boilers, auxiliary 

steam boilers, and stationary gas turbines at EGF accounts that generate electric energy 

for compensation; are owned or operated by an electric cooperative, independent power 

producer, municipality, river authority, or public utility, or any of its successors; and are 

located in Atascosa, Bastrop, Bexar, Brazos, Calhoun, Cherokee, Fannin, Fayette, 

Freestone, Goliad, Gregg, Grimes, Harrison, Henderson, Hood, Hunt, Lamar, 

Limestone, Marion, McLennan, Milam, Morris, Nueces, Parker, Red River, Robertson, 

Rusk, Titus, Travis, Victoria, or Wharton County; or 

(C) for the purposes of Subchapter B of this chapter (relating to 

Combustion Control at Major Industrial, Commercial, and Institutional Sources in 

Ozone Nonattainment Areas), all units in the Houston-Galveston-Brazoria ozone 

nonattainment area that generate electricity but do not meet the conditions specified in 

subparagraph (A) of this paragraph, including, but not limited to, cogeneration units 

and units owned by independent power producers. 

6 
(15) Emergency situation--As follows. 

(A) An emergency situation is any of the following: 

(i) an unforeseen electrical power failure from the serving 

electric power generating system; 

(ii) the period of time that an Electric Reliability Council of 

Texas, Inc. (ERCOT)-issued emergency notice or energy emergency alert (EEA) (as 

defined in ERCOT Nodal Protocols, Section 2: Definitions and Acronyms (June 1, 2012) 

and issued as specified in ERCOT Nodal Protocols, Section 6: Adjustment Period and 

Real-Time Operations (June 1, 2012)) is applicable to the serving electric power 

generating system. The emergency situation is considered to end upon expiration of the 

emergency notice or EEA issued by ERCOT; 

(iii) an unforeseen failure of on-site electrical transmission 

equipment (e.g., a transformer); 

(iv) an unforeseen failure of natural gas service; 

(v) an unforeseen flood or fire, or a life-threatening situation; 

7 
(vi) operation of emergency generators for Federal Aviation 

Administration licensed airports, military airports, or manned space flight control 

centers for the purposes of providing power in anticipation of a power failure due to 

severe storm activity; or 

(vii) operation of an emergency generator as part ofERCOT's 

emergency response service (as defined in ERGOT Nodal Protocols, Section 2: 

Definitions and Acronyms (June 1, 2012)) if the operation is in direct response to an 

instruction by ERCOT during the period of an ERCOT EEA as specified in clause (ii) of 

this subparagraph. 

(B) An emergency situation does not include: 

(i) operation for training purposes or other foreseeable 

events; or 

(ii) operation for purposes of supplying power for 

distribution to the electric grid, except as specified in subparagraph (A)(vii) of this 

paragraph. 

(16) Functionally identical replacement--A unit that performs the same 

function as the existing unit that it replaces, with the condition that the unit replaced 

8 
must be physically removed or rendered permanently inoperable before the unit 

replacing it is placed into service. 

(17) Heat input--The chemical heat released due to fuel combustion in a 

unit, using the higher heating value of the fuel. This does not include the sensible heat of 

the incoming combustion air. In the case of carbon monoxide (CO) boilers, the heat 

input includes the enthalpy of all regenerator off-gases and the heat of combustion of 

the incoming CO and of the auxiliary fuel. The enthalpy change of the fluid catalytic 

cracking unit regenerator off-gases refers to the total heat content of the gas at the 

temperature it enters the CO boiler, referring to the heat content at 60 degrees 

Fahrenheit, as being zero. 

(18) Heat treat furnace--A furnace that is used in the manufacturing, 

casting, or forging of metal to heat the metal so as to produce specific physical 

properties in that metal. 

(19) High heat release rate--A ratio of boiler design heat input to firebox 

volume (as bounded by the front firebox wall where the burner is located, the firebox 

side waterwall, and extending to the level just below or in front of the first row of 

convection pass tubes) greater than or equal to 70,000 British thermal units per hour 

per cubic foot. 

9 
(20) Horsepower rating--The engine manufacturer's maximum continuous 

load rating at the lesser of the engine or driven equipment's maximum published 

continuous speed. 

(21) Incinerator--As follows. 

(A) For the purposes of this chapter, the term "incinerator" includes 

both of the following: 

(i) a control device that com busts or oxidizes gases or vapors 

(e.g., thermal oxidizer, catalytic oxidizer, vapor combustor); and 

(ii) an incinerator as defined in §101.1 of this title (relating to 

Definitions). 

(B) The term "incinerator" does not apply to boilers or process 

heaters as defined in this section, or to flares as defined in §101.1 of this title. 

(22) Industrial boiler--Any combustion equipment, not including utility or 

auxiliary steam boilers as defined in this section, fired with liquid, solid, or gaseous fuel, 

that is used to produce steam or to heat water. 

10 
(23) International Standards Organization (ISO) conditions--ISO standard 

conditions of 59 degrees Fahrenheit, 1.0 atmosphere, and 6o% relative humidity. 

(24) Large utility system--All boilers, auxiliary steam boilers, and 

stationary gas turbines that are located in the Dallas-Fort Worth or the Dallas-Fort 

Worth eight-hour ozone nonattainment area, and were part of one electric power 

generating system on January 1, 2000, that had a combined electric generating capacity 

equal to or greater than soo megawatts. 

(25) Lean-burn engine--A spark-ignited or compression-ignited, Otto 

cycle, diesel cycle, or two-stroke engine that is not capable of being operated with an 

exhaust stream oxygen concentration equal to or less than o.s% by volume, as originally 

designed by the manufacturer. 

(26) Low annual capacity factor boiler, process heater, or gas turbine 

supplemental waste heat recovery unit--An industrial, commercial, or institutional 

boiler; process heater; or gas turbine supplemental waste heat recovery unit with 

maximum rated capacity: 

(A) greater than or equal to 40 million British thermal units per 

hour (MMBtu/hr), but less than 100 MMBtujhr and an annual heat input less than or 

equal to 2.8 (1011) British thermal units per year (Btu/yr), based on a rolling 12-month 

average; or 

11 
(B) greater than or equal to 100 MMBtu/hr and an annual heat 

input less than or equal to 2.2 (1011) Btu/yr, based on a rolling 12-month average. 

(27) Low annual capacity factor stationary gas turbine or stationary 

internal combustion engine--A stationary gas turbine or stationary internal combustion 

engine that is demonstrated to operate less than 850 hours per year, based on a rolling 

12-month average. 

(28) Low heat release rate--A ratio of boiler design heat input to firebox 

volume less than 70,000 British thermal units per hour per cubic foot. 

(29) Major source--Any stationary source or group of sources located 

within a contiguous area and under common control that emits or has the potential to 

emit: 

(A) at least 50 tons per year (tpy) of nitrogen oxides (NOx) and is 

located in the Beaumont-Port Arthur ozone nonattainment area; 

(B) at least 50 tpy ofNOxand is located in the Dallas-Fort Worth or 

Dallas-Fort Worth eight-hour ozone nonattainment area; 

12 
(C) at least 25 tpy of NOx and is located in the Houston-GalvestonBrazoria ozone nonattainment area; or 

(D) the amount specified in the major source definition contained 

in the Prevention of Significant Deterioration of Air Quality regulations promulgated by 

the United States Environmental Protection Agency in 40 Code of Federal Regulations 

§52.21 as amended June 3, 1993 (effective June 3, 1994), and is located in Atascosa, 

Bastrop, Bexar, Brazos, Calhoun, Cherokee, Comal, Fannin, Fayette, Freestone, Goliad, 

Gregg, Grimes, Harrison, Hays, Henderson, Hood, Hunt, Lamar, Limestone, Marion, 

McLennan, Milam, Morris, Nueces, Red River, Robertson, Rusk, Titus, Travis, Victoria, 

or Wharton County. 

(30) Maximum rated capacity--The maximum design heat input, 

expressed in million British thermal units per hour, unless: 

(A) the unit is a boiler, utility boiler, or process heater operated 

above the maximum design heat input (as averaged over any one-hour period), in which 

case the maximum operated hourly rate must be used as the maximum rated capacity; 

or 

(B) the unit is limited by operating restriction or permit condition 

to a lesser heat input, in which case the limiting condition must be used as the 

maximum rated capacity; or 

13 
(C) the unit is a stationary gas turbine, in which case the 

manufacturer's rated heat consumption at the International Standards Organization 

(ISO) conditions must be used as the maximum rated capacity, unless limited by permit 

condition to a lesser heat input, in which case the limiting condition must be used as the 

maximum rated capacity; or 

(D) the unit is a stationary, internal combustion engine, in which 

case the manufacturer's rated heat consumption at Diesel Equipment Manufacturer's 

Association or ISO conditions must be used as the maximum rated capacity, unless 

limited by permit condition to a lesser heat input, in which case the limiting condition 

must be used as the maximum rated capacity. 

(31) Megawatt (MW) rating--The continuous MW output rating or 

mechanical equivalent by a gas turbine manufacturer at International Standards 

Organization conditions, without consideration to the increase in gas turbine shaft 

output and/ or the decrease in gas turbine fuel consumption by the addition of energy 

recovered from exhaust heat. 

(32) Nitric acid--Nitric acid that is 30% to 100% in strength. 

(33) Nitric acid production unit--Any source producing nitric acid by 

either the pressure or atmospheric pressure process. 

14 
(34) Nitrogen oxides (NOx)--The sum of the nitric oxide and nitrogen 

dioxide in the flue gas or emission point, collectively expressed as nitrogen dioxide. 

(35) Parts per million by volume (ppmv)--All ppmv emission specifications 

specified in this chapter are referenced on a dry basis. When required to adjust pollutant 

concentrations to a specified oxygen C02) correction basis, the following equation must 

be used. 

Figure: 30 TAC §117.10(35) (No Change to the figure as it currently exists in TAC) 

(36) Peaking gas turbine or engine--A stationary gas turbine or engine 

used intermittently to produce energy on a demand basis. 

(37) Plant-wide emission rate--The ratio ofthe total actual nitrogen oxides 

mass emissions rate discharged into the atmosphere from affected units at a major 

source when firing at their maximum rated capacity to the total maximum rated 

capacities for those units. 

(38) Plant-wide emission specification--The ratio of the total allowable 

nitrogen oxides mass emissions rate dischargeable into the atmosphere from affected 

units at a major source when firing at their maximum rated capacity to the total 

maximum rated capacities for those units. 

15 
(39) Predictive emissions monitoring system (PEMS)--The total 

equipment necessary for the continuous determination and recordkeeping of process 

gas concentrations and emission rates using process or control device operating 

parameter measurements and a conversion equation or computer program to produce 

results in units of the applicable emission limitation. 

(40) Process heater--Any combustion equipment fired with liquid and/or 

gaseous fuel that is used to transfer heat from combustion gases to a process fluid, 

superheated steam, or water for the purpose of heating the process fluid or causing a 

chemical reaction. The term "process heater" does not apply to any unfired waste heat 

recovery heater that is used to recover sensible heat from the exhaust of any combustion 

equipment, or to boilers as defined in this section. 

(41) Pyrolysis reactor--A unit that produces hydrocarbon products from 

the endothermic cracking of feedstocks such as ethane, propane, butane, and naphtha 

using combustion to provide indirect heating for the cracking process. 

(42) Reheat furnace--A furnace that is used in the manufacturing, casting, 

or forging of metal to raise the temperature of that metal in the course of processing to a 

temperature suitable for hot working or shaping. 

(43) Rich-burn engine--A spark-ignited, Otto cycle, four-stroke, naturally 

aspirated or turbocharged engine that is capable of being operated with an exhaust 

16 
stream oxygen concentration equal to or less than 0.5% by volume, as originally 

designed by the manufacturer. 

(44) Small utility system--All boilers, auxiliary steam boilers, and 

stationary gas turbines that are located in the Dallas-Fort Worth or the Dallas-Fort 

Worth eight-hour ozone nonattainment area, and were part of one electric power 

generating system on January 1, 2000, that had a combined electric generating capacity 

less than 500 megawatts. 

(45) Stationary gas turbine--Any gas turbine system that is gas and/or 

liquid fuel fired with or without power augmentation. This unit is either attached to a 

foundation or is portable equipment operated at a specific minor or major source for 

more than 90 days in any 12-month period. Two or more gas turbines powering one 

shaft must be treated as one unit. 

(46) Stationary internal combustion engine--A reciprocating engine that 

remains or will remain at a location (a single site at a building, structure, facility, or 

installation) for more than 12 consecutive months. Included in this definition is any 

engine that, by itself or in or on a piece of equipment, is portable, meaning designed to 

be and capable of being carried or moved from one location to another. Indicia of 

portability include, but are not limited to, wheels, skids, carrying handles, dolly, trailer, 

or platform. Any engine (or engines) that replaces an engine at a location and that is 

intended to perform the same or similar function as the engine being replaced is 

17 
included in calculating the consecutive residence time period. An engine is considered 

stationary if it is removed from one location for a period and then returned to the same 

location in an attempt to circumvent the consecutive residence time requirement. 

Nonroad engines, as defined in 40 Code of Federal Regulations §89.2, are not 

considered stationary for the purposes of this chapter. 

(47) System-wide emission rate--The ratio of the total actual nitrogen 

oxides mass emissions rate discharged into the atmosphere from affected units in an 

electric power generating system or portion thereof located within a single ozone 

nonattainment area when firing at their maximum rated capacity to the total maximum 

rated capacities for those units. For fuel oil firing, average activity levels must be used in 

lieu of maximum rated capacities for the purpose of calculating the system-wide 

emission rate. 

(48) System-wide emission specification--The ratio of the total allowable 

nitrogen oxides mass emissions rate dischargeable into the atmosphere from affected 

units in an electric power generating system or portion thereof located within a single 

ozone nonattainment area when firing at their maximum rated capacity to the total 

maximum rated capacities for those units. For fuel oil firing, average activity levels must 

be used in lieu of maximum rated capacities for the purpose of calculating the systemwide emission specification. 

18 
(49) Thirty-day rolling average--An average, calculated for each day that 

fuel is com busted in a unit, of all the hourly emissions data for the preceding 30 days 

that fuel was com busted in the unit. 

(50) Twenty-four hour rolling average--An average, calculated for each 

hour that fuel is combusted (or acid is produced, for a nitric or adipic acid production 

unit), of all the hourly emissions data for the preceding 24 hours that fuel was 

com busted in the unit. 

(51) Unit--A unit consists of either: 

(A) for the purposes of §§117.105, 117.205, 117.305, 117.1005, 

117.1105, and 117.1205 of this title (relating to Emission Specifications for Reasonably 

Available Control Technology (RACT)) and each requirement of this chapter associated 

with §§117.105, 117.205, 117.305, 117.1005, 117.1105, and 117.1205 of this title, any boiler, 

process heater, stationary gas turbine, or stationary internal combustion engine, as 

defined in this section; 

(B) for the purposes of §§117.110, 117.210, 117.310, 117.1010, 

117.1110, and 117.1210 of this title (relating to Emission Specifications for Attainment 

Demonstration) and each requirement of this chapter associated with §§117.110, 117.210, 

117.310, 117.1010, 117.1110, and 117.1210 of this title, any boiler, process heater, 

stationary gas turbine, or stationary internal combustion engine, as defined in this 

19 
section, or any other stationary source of nitrogen oxides (NOx) at a major source, as 

defined in this section; 

(C) for the purposes of §117.2010 of this title (relating to Emission 

Specifications) and each requirement of this chapter associated with §117.2010 ofthis 

title, any boiler, process heater, stationary gas turbine (including any duct burner in the 

turbine exhaust duct), or stationary internal combustion engine, as defined in this 

section; 

(D) for the purposes of §117.2110 of this title (relating to Emission 

Specifications for Eight-Hour Attainment Demonstration) and each requirement of this 

chapter associated with §117.2110 of this title, any stationary internal combustion 

engine, as defined in this section; 

(E) for the purposes of §117.3310 of this title (relating to Emission 

Specifications for Eight-Hour Attainment Demonstration) and each requirement of this 

chapter associated with §117.3310 of this title, any stationary internal combustion 

engine, as defined in this section; or 

(F) for the purposes of §117-410 and §117.1310 of this title (relating 

to Emission Specifications for Eight-Hour Attainment Demonstration) and each 

requirement of this chapter associated with §117-410 and §117.1310 of this title, any 

boiler, process heater, stationary gas turbine, or stationary internal combustion engine, 

20 
as defined in this section, or any other stationary source of NOx at a major source, as 

defined in this section. 

(52) Utility boiler--Any combustion equipment owned or operated by an 

electric cooperative, municipality, river authority, public utility, or Public Utility 

Commission of Texas regulated utility, fired with solid, liquid, and/ or gaseous fuel, used 

to produce steam for the purpose of generating electricity. Stationary gas turbines, 

including any associated duct burners and unfired waste heat boilers, are not considered 

to be utility boilers. 

(53) Wood--Wood, wood residue, bark, or any derivative fuel or residue 

thereof in any form, including, but not limited to, sawdust, sander dust, wood chips, 

scraps, slabs, millings, shavings, and processed pellets made from wood or other forest 

residues. 

21 
~;{~!~~~!~p;r::J~2~::ii\'~:~."~:~ 

ORDER ADOPTING AMENDED RULES AND . · . .,~~~ 

REVISIONS TO THE STATE IMPLEMENTATid'&"pJ::AN··· ......... -

Docket No. 2012-0896-RUL 

Rule Project No. 2012-025-117-AI 

On April10, 2013, the Texas Commission on Environmental Quality (commission), 

during a public meeting, considered adoption of amended 30 Texas Administrative Code§ 

101.379 and§ 117.10. The Commission adopts these amendments in Chapter 101, General Air 

Quality Rules, Subchapter H, Emissions Banking and Trading, Didsion 4, Discrete Emission 

Credit Banking and Trading and Chapter 117, Control of Air Pollution from Nitrogen 

Compounds, Subchapter A, Definitions; and corresponding revisions to the state 

implementation plan (SIP). The adopted rulemaking amends §101.379 and the definition of 

emergency situation in §117.10 to reference the version of the ERCOT nodal protocols 

effective June 1, 2012. The adopted rulemaking also amends the definition of emergency 

situation in §117.10 to reflect changes made by ERCOT to promote reliability during energy 

emergencies by allowing the operation of generators for purposes of selling power to the 

electric grid under limited circumstances. Under Tex. Health & Safety Code Ann. §§ 382.011, 

382.012, and 382.023 (Vernon 2011), the Commission has the authority to control the quality 

of the state's air and to issue orders consistent vvith the policies and purposes of the Texas 

Clean Air Act, Chapter 382 of the Tex. Health & Safety Code. The proposed rules were 

published for comment in theN ovember 2, 2012, issue of the Texas Register (37 TexReg 8718 

and TexReg 8722). 

· Pur~:uant to Tex. Health & Safety Code Ann.§ 382.017 (Vernon 2001), Tex. Gov't Code 

Chapter 2001 (Vernon 2008), and 40 Code of Federal Regulations§ 51.102, and after proper 

·noti.~e, the-Commission conducted a public hearing to consider the amended rules and 

revisions to the SIP. Proper notice included prominent advertisement in the areas affected at 

least 30 d-ays prior to the date of the hearing. A public hearing was held in Austin at the Texas 

Coriiinissl'Gn ofEmironmental Quality headquarters November 28, 2012. "~.-· r:- . r-= 

= T~cj Commission circulated hearing notices of its intended action to the public, 

including interested persons, the Regional Administrator of the EPA, and all applicable local 

air pollution control agencies. The public was invited to submit data, views, and 

recommendations on the proposed amended rules and SIP revisions, either orally or in 

\vTiting, at the hearing or during the comment period. Prior to the scheduled hearing, copies 

of the proposed amended rules and SIP revisions were available for public inspection at the 

Commission's central office and on the Commission's Web site. 
period, and were considered by the Commission as reflected in the analysis of testimony 

incorporated by reference to this Order. The Commission finds that the analysis of testimony 

includes the names of all interested groups or associations offering comment on the proposed 

amended rules and the SIP revisions and their position concerning the same. 

IT IS THEREFORE ORDERED BY THE COMMISSION that the amended rules and 

revisions to the SIP incorporated by reference to this Order are hereby adopted. The 

Commission further authorizes staff to make any non-substantive revisions to the rules 

necessary to comply '"'ith Texas Register requirements. The adopted rules and the preamble 

to the adopted rules and the revisions to the SIP are incorporated by reference in this Order 

as if set forth at length verbatim in this Order. 

IT IS FURTHER ORDERED BY THE COMMISSION that on behalf of the 

Commission, the Chairman should transmit a copy of this Order, together with the adopted 

rules and revisions to the SIP, to the Regional Administrator of EPA as a proposed revision to 

the Texas SIP pursuant to the Federal Clean Air Act, codified at 42 U.S. Code Ann. §§ 7401-

7671q, as amended. 

This Order constitutes the Order of the Commission required by the Administrative 

Procedure Act, Tex. Gov't Code,§ 2001.033 (Vernon 2008). 

If any portion of this Order is for any reason held to be invalid by a court of competent 

jurisdiction, the invalidity of any portion shall not affect the validity of the remaining 

portions. 

Issued date: APR 2 2 2013 

TEXAS COMMISSION ON 

ENVIRONMENTAL QUALI1Y 
PART 1. TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY 

CHAPTER 101. GENERAL AIR QUALITY 

RULES 

SUBCHAPTER H. EMISSIONS BANKING 

AND TRADING 

DIVISION 4. DISCRETE EMISSION CREDIT 

BANKING AND TRADING 

30 TAC §101.379 

The Texas Commission on Environmental Quality (TCEQ, 

agency, or commission) adopts the amendment to §101.379 

with changes to the proposed text as published in the November 

2, 2012, issue of the Texas Register(37 TexReg 8718). 

If adopted, the amended §1 01.379 will be submitted to the United 

States Environmental Protection Agency (EPA) as a revision to 

the state implementation plan (SIP). 

Background and Summary of the Factual Basis for the Adopted 

Rule 

The Electric Reliability Council of Texas, Inc. (ERGOT) manages the electrical grid within the ERGOT region of Texas, with 

oversight by the Public Utility Commission of Texas (PUCT). On 

March 22, 2012, the PUCT repealed 16 TAC §25.507, to replace 

the Emergency Interruptible Load Service (ElLS) program with 

the Emergency Response Service (ERS) program (new 16 TAC 

§25.507). Like the ElLS program, the new ERS program is designed to help decrease the likelihood of requiring firm load shedding (i.e., rolling black-outs) during an ERGOT-declared energy 

emergency by decreasing the power demand on the electrical 

grid. Subsequent changes to ERGOT's Nodal Protocols reflecting the new ERS program became effective on June 1, 2012. 

On December 10, 2008, the commission adopted the amendment to §101.379 to restrict the use of discrete emissions reduction credits (DERCs) in the Dallas-Fort Worth 1997 eight-hour 

ozone nonattainment area (DFW area) to a level consistent with 

the attainment and maintenance of the 1997 eight-hour ozone 

National Ambient Air Quality Standard (NAAQS). The rule requires an annual review of the DFW area DERC program to 

determine the flow control limit and apportion available DERCs 

for potential use. The rule also provides an exemption from the 

DFW flow control limit for DERCs used in response to an ERGOT -declared emergency situation and references the specific 

ERGOT protocols that detail the emergency notice. The existing rule references a previous version of the ERGOT protocols, 

which could potentially cause confusion for regulated entities 

and delay the processing of DERC usage requests. The adopted 

rulemaking updates§ 101.379 to reference the version of the ERGOT protocols effective on June 1, 2012. 

The amendment to § 101.379 is adopted concurrently with the 

amendment to 30 TAC §117.10 that will be published in a separate rulemaking in this issue of the Texas Register. 

Section Discussion 

The commission revises §1 01.379(c)(2)(D) to reference the version of the ERGOT Protocols effective on June 1, 2012. Additionally, in response to ERGOT's comments on this rulemaking, 

the commission is revising §101.379(c)(2)(D) to also include operations in response to an ERGOT energy emergency alert. The 

commission is making this change to address situations when 

system conditions deteriorate so rapidly that it is not possible for 

ERGOT to issue an emergency notice prior to declaring an energy emergency alert. 

Final Regulatory Impact Analysis 

The commission reviewed the adopted rule in light of the 

regulatory analysis requirements of Texas Government Code, 

§2001.0225 and determined that the adopted rulemaking does 

not meet the definition of a major environmental rule. Texas 

Government Code, §2001.0225 states that a major environmental rule is a rule for which the specific intent is to protect the 

environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the 

economy, a sector of the economy, productivity, competition, 

jobs, the environment, or the public health and safety of the 

state or a sector of the state. Furthermore, while the adopted 

rulemaking does not constitute a major environmental rule, 

even if it did, a regulatory impact analysis would not be required 

because the adopted rulemaking does not meet any of the four 

applicability criteria for requiring a regulatory impact analysis 

for a major environmental rule. Texas Government Code, 

§2001.0225 applies only to a major environmental rule that: 1) 

exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement 

of state law, unless the rule is specifically required by federal 

law; 3) exceeds a requirement of a delegation agreement or 

contract between the state and an agency or representative 

of the federal government to implement a state and federal 

program; or 4) adopts a rule solely under the general powers of 

the agency instead of under a specific state law. Specifically, 

it does not meet any of the four applicability criteria listed in 

Texas Government Code, §2001.0225 because: 1) the adopted 

rulemaking is part of the SIP, and as such is designed to meet, 

not exceed the relevant standard set by federal law; 2) parts 

of the adopted rulemaking are directly required by state law; 

3) no contract or delegation agreement covers the topic that 

is the subject of this adopted rulemaking; and 4) the adopted 

rulemaking is authorized by specific sections of Texas Health 

and Safety Code (THSC), Chapter 382 (also known as the 

Texas Clean Air Act), and the Texas Water Code, which are 

cited in the Statutory Authority section of this preamble. 

The adopted rule implements requirements of the Federal Clean 

Air Act (FCAA). Under 42 United States Code (USC), §7410, 

each state is required to adopt and implement a SIP containing adequate provisions to implement, attain, maintain, and enforce the NAAQS within the state. While 42 USC, §7410 generally does not require specific programs, methods, or reductions in order to meet the standard, SIPs must include enforceable emission limitations and other control measures, means, or 

techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as 

schedules and timetables for compliance as may be necessary 

or appropriate to meet the applicable requirements of this chapter (meaning 42 USC, Chapter 85, Air Pollution Prevention and 

Control, otherwise known as the FCAA). The provisions of the 

FCAA recognize that states are in the best position to determine 

what programs and controls are necessary or appropriate in order to meet the NAAQS. This flexibility allows states, affected 

industry, and the public to collaborate on the best methods for 

attaining the NAAQS for the specific regions in the state. Even 

though the FCAA allows states to develop their own programs, 

this flexibility does not relieve a state from developing a program 

that meets the requirements of 42 USC, §7 410. States are not 

ADOPTED RULES April 26, 2013 38 TexReg 2619 
free to ignore the requirements of 42 USC, §7 410, and must develop programs and control measures to assure that their SIPs 

provide for implementation, attainment, maintenan~~· and enforcement of the NAAQS within the state. The spec1f1c Intent of 

the adopted rulemaking is to update references to the ERGOT 

protocols in §101.379 to be consistent with §117.10. 

While the adopted rulemaking protects the environment or reduces risks to human health from environmental exposure, it 

does not constitute a major environmental rule under Texas Government Code, §2001.0225(g)(3) because it does not adversely 

affect in a material way the economy, a sector of the economy, 

productivity, competition, or jobs, nor would the rulemaking adversely affect in a material way the environment, or the public 

health and safety of the state or a sector of the state. The rul~­

making as a result is not subject to a regulatory 1mpact analysis 

under Texas Government Code, §2001.0225 because it is not a 

major environmental rule. 

The requirement to provide a fiscal analysis of regulations in the 

Texas Government Code was amended by Senate Bill (SB) 633, 

75th Legislature, 1997. The intent of SB 633 -:vas to require 

agencies to conduct a regulatory impact analys1s of extraordinary rules. These are identified in the statuto'!' language as major environmental rules that will have a matenal adverse 1m pact 

and will exceed a requirement of state law, federal law, or a delegated federal program; or are adopted solely under the general 

powers of the TCEQ. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for SB 633 that concluded: based on an assessment of 

rules adopted by the agency in the past, it is not anticipated that 

the bill will have significant fiscal implications for the agency due 

to its limited application. The commission also noted that the 

number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in 

part, on the criteria set forth in the bill that exempted rules from 

the full analysis unless the rule was a maJor enwonmental rule 

that exceeded a federal law. 

The FCAA does not always require specific programs, methods, 

or reductions in order to meet the NAAQS; thus, states must 

develop programs for each nonattainment area to help ensure 

that those areas will meet the attainment deadlines. Because of 

the ongoing need to address nonattainment issu~s .and to meet 

the requirements of 42 USC, §7410, the commiSSIOn rout1n~ly 

proposes and adopts revisions to the SIP and rules. The legislature is presumed to understand this federal scheme. If each 

rule adopted for inclusion in the SIP were considered to be a 

major environmental rule that exceeds federal law, then every 

revision to the SIP would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent 

with the conclusions reached by the comm1ss1on 1n 1ts cost estimate and by the Legislative Budget Board (LBB) in its f!scal 

notes. Since the legislature is presumed to understand the f1scal 

impacts of the bills it passes and that presumption is based on 

information provided by state agencies and the LBB, the co~­

mission believes that the intent of SB 633 was only to requ1re 

the full regulatory impact analysis for rules .that are extraordinary in nature. While the rules have a broad 1m pact, that 1mpact 

is no greater than is necessary or appropriate to meet the requirements of the FCAA. For these reasons, rules adopted for 

inclusion in the SIP fall under the exception in Texas Government 

Code, §2001.0225(a), because they are required by federal law. 

The commission has consistently applied this construction to 

its rules since this statute was enacted in 1997. Since that 

38 TexReg 2620 April 26, 2013 Texas Register 

time, the legislature has revised the Texas Government Code 

but left this provision substantially unamended. It is presumed 

that, when an agency interpretation is in effect at the time the 

legislature amends the laws without making substantial change 

in the statute, the legislature is deemed to have accepted the 

agency's interpretation. (Central Power & Light Co. v: Sharp, 

919 S.W.2d 485, 489 (Tex. App. Austin 1995), writ denied with 

per curiam opinion respecting another issue, 960 S.W.2d 617 

(Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 

357 (Tex. App. Austin 1990, no writ) superseded by statute ?n 

another point of law, Tax Code § 112.1 08, Other Act1ons Prohibited, as recognized in, First State Bank of Duf!las v. Sharp, 86~ 

S.W.2d 81, 83 (Tex. App. Austin 1993, no wnt); Cf Humble Otl 

& Refining Co. v: Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney 

v. State Farm Mut. Auto Ins. Co., 9 S.W.3d 884, 893 (Tex. App. 

Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 24 

S.W.3d 581 (Tex. App. Austin 2000, pet. denied); and Coastal 

lndust. Water Auth. v: Trinity Portland Cement Div., 563 S.W.2d 

916 (Tex. 1978).) 

The commission's interpretation of the regulatory impact analysis requirements is also supported by a change m~de to t~e 

Texas Administrative Procedure Act (APA) by the legislature 1n 

1999. In an attempt to limit the number of rule challenges based 

upon APA requirements, the legislature clarified that state agencies are required to meet these sections of the APA against the 

standard of substantial compliance as required in Texas Government Code, §2001.035. The legislature specifically identified 

Texas Government Code, §2001.0225 as falling under this standard. The commission has complied with the requirements of 

Texas Government Code, §2001.0225. 

Even if the adopted rulemaking constitutes a major environmental rule under Texas Government Code, §2001.0225(g)(3), a 

regulatory impact analysis is not required because this exemption is part of the commission's SIP for making progress toward 

the attainment and maintenance of the NAAQS. Therefore, the 

adopted rulemaking does not exceed a standard set by federal 

law or exceed an express requirement of state law, since they 

are part of an overall regulatory scheme designed to meet, 

not exceed, the relevant standard set by federal law (NAAQS). 

The commission is charged with protecting air quality within the 

state and to design and submit a plan to achieve attainment 

and maintenance of the federally mandated NAAQS. The Third 

District Court of Appeals upheld this interpretation in Brazoria 

County v: Texas Commn on Envtl. Quality, 128 S.W. 3d 728 

(Tex. App. - Austin 2004, no writ). The specific intent of the 

adopted rulemaking is to update references to the ERGOT protocols in §1 01.379 to be consistent with §117.1 0. This adoption, 

therefore, does not exceed an express requirement of federal 

law. The amendment is needed to implement state law, but 

does not exceed those new requirements. Finally, this rulemaking was not developed solely under the general powers of the 

agency but is authorized by specific sections of THSC, Chapter 

382, which are cited in the Statutory Authonty sect1on of th1s 

preamble, including THSC, §382.012 and §382.019. Because 

this adopted rulemaking does not meet any of the four applicability requirements, Texas Government Code, §2001.0225(b) 

does not apply and a regulatory impact analysis is not required. 

The commission invited public comment regarding the draft regulatory impact analysis determination during the public comment 

period. No comments were received on the regulatory impact 

analysis determination. 

Takings Impact Assessment 
The comm1ss1on evaluated the adopted rulemaking and 

performed an analysis of whether the adopted rulemaking 

constitutes a taking under Texas Government Code, Chapter 

2007. The commission's preliminary assessment indicates 

Texas Government Code, Chapter 2007 does not apply. 

Under Texas Government Code, §2007.002(5), taking means: 

"(A) a governmental action that affects private real property, in 

whole or in part or temporarily or permanently, in a manner that 

requires the governmental entity to compensate the private real 

property owner as provided by the Fifth and Fourteenth Amendments to the United States Constitution or Section 17 or 19, Article I, Texas Constitution; or (B) a governmental action that: (i) 

affects an owner's private real property that is the subject of the 

governmental action, in whole or in part or temporarily or permanently, in a manner that restricts or limits the owner's right to the 

property that would otherwise exist in the absence of the governmental action; and (ii) is the producing cause of a reduction of at 

least 25 percent in the market value of the affected private real 

property, determined by comparing the market value of the property as if the governmental action is not in effect and the market 

value of the property determined as if the governmental action 

is in effect." 

Promulgation and enforcement of the rulemaking would be neither a statutory nor a constitutional taking of private real property. 

The primary purpose of the rulemaking is an update to Chapter 

101, Subchapter H to ensure consistency with ERGOT's new 

ERS program. This rule is not burdensome, restrictive, or limiting of rights to private real property because the rulemaking regulates the use of electric generators in certain limited emergency 

situations. Furthermore, the rulemaking benefits the public by 

potentially decreasing the likelihood of requiring firm load shedding (i.e., rolling black-outs) when additional control measures 

are needed to achieve or maintain attainment of the federal air 

quality standards through the use of electric generators. The 

rulemaking does not affect a landowner's rights in private real 

property because this rulemaking does not burden, restrict, or 

limit the owner's right to property, nor does it reduce the value 

of any private real property by 25% or more beyond that which 

would otherwise exist in the absence of the regulations. Therefore, this rule does not constitute a taking under Texas Government Code, Chapter 2007. 

Consistency with the Coastal Management Program 

The commission reviewed the adopted rulemaking and found 

that the rule is subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act, 

Texas Natural Resources Code, §§33.201 et seq., and therefore 

must be consistent with all applicable CMP goals and policies. 

The commission conducted a consistency determination for the 

adopted rule in accordance with Coastal Coordination Act Implementation Rules, 31 TAC §505.22, and found the adopted rulemaking is consistent with the applicable CMP goals and policies. 

The CMP goal applicable to the adopted rulemaking is the 

goal to protect, preserve, and enhance the diversity, quality, 

quantity, functions, and values of coastal natural resource areas 

(§501.12(1)). The CMP policy applicable to the adopted rulemaking is the policy that commission rules comply with federal 

regulations in 40 Code of Federal Regulations to protect and 

enhance air quality in the coastal areas (§501.32). The adopted 

rulemaking does not increase emissions of air pollutants and is 

therefore consistent with the CMP goal in §501.12(1) and the 

CMP policy in §501.32. 

Promulgation and enforcement of this rule will not violate or exceed any standards identified in the applicable CMP goals and 

policies because the adopted rule is consistent with these CMP 

goals and policies and because this rule does not create or have 

a direct or significant adverse effect on any coastal natural resource areas. Therefore, in accordance with §505.22(e), the 

commission affirms that this rulemaking action is consistent with 

CMP goals and policies. 

The commission invited comment on the consistency ofthis rulemaking during the public comment period. The commission received no comments on the consistency of this rulemaking. 

Effect on Sites Subject to the Federal Operating Permits Program 

The adopted amendment will not require any changes to federal 

operating permits. 

Public Comment 

The commission scheduled a public hearing in Austin on November 28, 2012. However, the hearing was not officially opened because no one registered to provide comments. The public comment period closed on December 5, 2012. The commission received comments from Blue Sky Environmental LLC (Blue Sky), 

EnerNOC, Inc. (EnerNOC), EPA, and ERCOT. 

Response to Comments 

Comment 

Blue Sky, EnerNOC, EPA, and ERCOT expressed support for 

the proposed revisions to §101.379(c)(2)(D). 

Response 

The commission appreciates the support. 

Comment 

ERCOT commented that if system conditions deteriorate too 

rapidly it might not be possible to issue an emergency notice 

prior to declaring an energy emergency alert and subsequently 

deploying ERS. ERCOT recommended the commission amend 

§101.379(c)(2)(D) to refer to ERGOT's dispatch of ERS rather 

than the issuance of an emergency notice. ERCOT recommended that the commission reference the PUCT's ERS rule 

in 16 TAC §25.507 rather than the ERCOT Nodal Protocols 

referenced in the proposed rules. ERCOT expressed concern 

that the frequent revisions to the ERCOT Nodal Protocols could 

create confusion as to the applicability of §117.1 0(15)(A)(ii) and 

§101.379(c)(2)(D). ERCOT suggested the commission could 

more easily monitor the infrequent changes to the PUCT rules 

than the numerous ongoing proposals to revise the ERCOT 

Nodal Protocols referenced in the proposed rules. 

Response 

The intent of §101.379(c)(2)(D) is to provide electric generating 

facilities that are subject to the DERC flow control limit specified in §101.379(c)(2)(A) a temporary exemption from the DERC 

flow control limit. Limiting the definition of an ERGOT-declared 

emergency solely to deployment of the ERS will exclude electric generating facilities from being temporarily exempt from the 

DERC flow control limit when required to operate in an emergency situation in which the safety or reliability of the ERCOT 

system is compromised or threatened, as determined by ERGOT. Since the provision in §101.379(c)(2)(D) affects sources 

that are likely not participating in ERGOT's ERS program but 

are operating as a result of an ERGOT-declared emergency, it 

ADOPTED RULES April 26, 2013 38 TexReg 2621 
is necessary for the commission to retain the reference to emergency notice. Additionally, in response to ERGOT's _comments 

the commission is revising §101.379(c)(2)(D) to also Include operations in response to an ERGOT energy emergenc_y ~.lert. The 

commission is making this change to ensure the def1n1t1on of an 

ERGOT-declared emergency includes situations when system 

conditions deteriorate so rapidly that it is not possible for ERGOT to issue an emergency notice prior to declaring an energy 

emergency alert. 

The commission is aware that the ERGOT Nodal Protocols references in§ 1 01.379(c)(2)(D) are frequently revised and have_even 

been revised since the commission proposed th1s rulemak1ng 1n 

October 2012. Since the provision in §1 01.379(c)(2)(D) affects 

sources that are likely not participating in ERGOT's ERS program but are operating as a result of an ER~OT-declared emergency, it is not appropriate for the commiSSIOn t~ r~ference the 

PUCT's ERS rule in 16 TAC §25.507. The commiSSIOn respectfully declines to make the suggested change. 

Comment 

To account for emergency demand response programs initiated 

by Texas utilities that are experiencing voltage reductions, Blue 

Sky and EnerNOC recommended expanding the ~erm ERC_C?Tdeclared emergency in §101.379(c)(2)(D) to also Include utilitydeclared emergencies. 

Response 

The purpose of this rulemaking is not to redefine emergency 

situation but merely to update §1 01.379 to reference the version of the ERGOT protocols effective on June 1, 2012. The 

commission does not agree that an emergency situation should 

include operations that occur in response to a utility-declared 

emergency. The suggested change would effectively decrease 

the stringency ofthe existing rules by expanding the scope of the 

current definition to include additional situations that would not 

currently be considered emergency situations. Because the EPA 

has approved the existing rules as part of _the SIP, the suggested 

expansion of the definition could be considered backsl1~1ng and 

result in the EPA's disapproval of the rulemak1ng. As discussed 

elsewhere in the Response to Comments section of the preamble the commission is also revising the proposed rule language 

to i~clude operations that are in direct response to an instruction 

by ERGOT during the period of an ERGO! energy emergency 

alert. The commission makes no change 1n response to these 

comments. 

Comment 

EPA stated that the current DERC rules in §1 01.379 establish 

the DERC flow-control mechanism to support attainment of the 

1997 eight-hour ozone standard. The EPA commented it has 

since promulgated a more stringent ozone standard. On March 

27, 2008, and on April 30, 2012, the EPA des1gnated a new 

ten-county area as the 2008 Dallas-Fort Worth ozone nonattainment area. EPA also commented that the commission will 

need to review the technical basis for the DERC flow control in 

§1 01.379 and update as necess~ry to reflect _the most current 

ozone standard as part of its attainment planmng. 

Response 

The scope of this rulemaking is limited to updating the reference 

to the ERGOT protocols and therefore evaluating the technical 

basis of the DERC flow control for the 2008 ozone standard is 

beyond the scope of this rulemaking. How~ver, the commissi?n 

may consider the DERC flow control requirement as part of 1ts 

38 TexReg 2622 April 26, 2013 Texas Register 

planning efforts for the 2008 ozone standard. The commission 

makes no change in response to this comment. 

Comment 

Blue Sky and EnerNOC recommended the commission provide 

guidance regarding the SIP process. The com~enters als~ requested the commission confirm that the follow1ng assumpt1~ns 

are correct: 1) the revisions in §117.379 will not be fully Implemented until the EPA approves the SIP revision; 2) engines 

participating in the ERS and other utility-sponsored emergency 

demand response programs without sending power to the electric grid can continue to operate under the definition of emergency situation until the references to the appropnate protocols 

are changed; and 3) emergency engines c_ould_ not send power 

to the electric grid under an emergency s1tuat1on unt1l the SIP 

revision is approved. 

Response 

The Texas Water Code authorizes the commission to propose 

and adopt rules necessary to carry out its powers and duties. 

Once adopted, the commission files the rule with the Secretary 

of State for publication in the Texas Register. This action usually occurs the first Friday after adoption. The rule becomes effective 20 calendar days after filing and is fully enforceable by 

the commission from that time on irrespective of EPA approval 

of the rule revision as part of the SIP. Therefore, beginning on 

the effective date of the rule, the definition of emergency situation will include operations in direct response to an instruction 

by ERGOT during the period of an ERGOT-declared emergency 

that supply power to the electric grid. As discussed elsewher~ 1n 

the Response to Comments section of the preamble, t~e definition of emergency situation in §101.379 includes operat1ons during an ERGOT-declared emergency but does not include other 

utility-sponsored emergency demand response programs. The 

commission makes no change in response to these comments. 

Statutory Authority 

The amendment is adopted under the authority of the following: Texas Water Code (TWC), §5.1 02, General Powers, TWC, 

§5.1 03, Rules, and TWC, §5.1 05, General Policy (these provisions authorize the commission to adopt rules necessary to carry 

out its powers and duties as well as all general policies under 

the TWC); Texas Health and Safety Code (THSC), §382.01_7, 

Rules which authorizes the commission to adopt rules consistent ...;ith the policy and purposes of the Texas Clean Air Act; 

THSC, §382.002, Policy and Purpose, which establishes the 

commission's purpose to safeguard the state's air resources, 

consistent with the protection of public health, general welfare, 

and physical property; THSC, §382.011, General Powers and 

Duties which authorizes the commission to control the quality of the state's air; THSC, §382.012, State Air Control Plan, 

which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the st~te's air; and 

THSC, §382.051 (d), Permitting Authority of Comm1ss1on; Rules, 

which authorizes the commission to adopt rules as necessary 

to comply with changes in federal law or regulations applicable 

to permits under THSC, Chapter 382. Finally, the amendment 

is also adopted under Federal Clean Air Act (FCAA), 42 United 

States Code (USC), §§7401, et seq., which requires states to 

submit state implementation plan revisions that specify the manner in which the National Ambient Air Quality Standards will be 

achieved and maintained within each air quality control region of 

the state. 
The adopted amendment implements TWC, §§5.1 02, 5.1 03, and 

5.105; THSC, §§382.002, 382.011, 382.012, 382.016, 382.017, 

and 382.021; and FCAA, 42 USC, §§7401, etseq. 

§101.379. Program Audits and Reports. 

(a) No later than three years after the effective date of this section, and every three years thereafter, the executive director will audit 

this program. 

(1) The audit will evaluate the timing of credit generation 

and use, the impact of the program on the state's attainment demonstration and the emissions of hazardous air pollutants, the availability and 

cost of credits, compliance by the participants, and any other elements 

the executive director may choose to include. 

(2) The executive director will recommend measures to 

remedy any problems identified in the audit. The trading of discrete 

emission credits may be discontinued by the executive director in 

part or in whole and in any manner, with commission approval, as a 

remedy for problems identified in the program audit. 

(3) The audit data and results will be completed and submitted to the United States Environmental Protection Agency and made 

available for public inspection within six months after the audit begins. 

(b) No later than February 1 of each calendar year, the executive director shall develop and make available to the general public 

and the United States Environmental Protection Agency a report that 

includes the following information for the previous calendar year: 

( 1) the amount of each pollutant emission credits generated 

under this division; 

(2) the amount of each pollutant emission credits used under this division; 

(3) a summary of all trades completed under this division; 

and 

(4) the amount of discrete emission reduction credits 

(DERC) approved for use under subsection (c) of this section. 

(c) No later than October 1 of each year, the executive director 

will complete, and make available to the general public and the United 

States Environmental Protection Agency, an annual review to determine the number ofDERCs available for potential use in the upcoming calendar year for the Dallas-Fort Worth (DFW) eight-hour ozone 

nonattainment area. The annual review will include the calculation of 

the flow control limit as specified in subsection ( c )(2)(A) of this section to ensure noninterference with attainment and maintenance of the 

ozone National Ambient Air Quality Standard (NAAQS) and the apportionment of approved DERCs. 

(1) For the 2009 control period, the flow control limit 

for DERCs available for use is the number prescribed in the DFW 

Eight-Hour Ozone Attainment Demonstration SIP Revision for the 

1997 eight-hour ozone standard, in tons per day, not to be exceeded in 

any day, where a day is a 24-hour period from midnight to midnight. 

(2) For any control period after 2009, the annual review 

will establish a flow control limit for that year, in tons per day, not to 

be exceeded in any day, where a day is a 24-hour period from midnight 

to midnight. 

(A) The flow control limit for a particular year will be 

determined using the following equation: 

Figure: 30 TAC §101.379(c)(2)(A) (No change.) 

(B) If use of the entire DERC bank would not interfere with attainment and maintenance of the 1997 eight-hour ozone 

NAAQS in the DFW eight-hour ozone nonattainment area, then the 

number ofDERCs potentially available for use is the total number of 

DERCs in the bank. 

(C) If the flow control limit, as calculated in the equation in subparagraph (A) of this paragraph, is greater than the total number ofDERCs requested for use in accordance with§ 1 01.376( d) of this 

title (relating to Discrete Emission Credit Use) the executive director: 

(i) may approve all requested Notice oflntent to Use 

Discrete Emission Credits (DEC-2 Form) submittals; and 

(ii) will consider any late DEC-2 Forms submitted 

as provided under §101.376(d)(3) of this title that is not an Electric 

Reliability Council of Texas, Inc. (ERCOT)-declared emergency situation as defined in subparagraph (D) of this paragraph, but will not 

otherwise approve a late submittal that would exceed the flow control 

limit established by the equation under subsection (c)(2)(A) of this section. 

(D) If the DEC-2 Forms are submitted in response to 

an ERCOT-declared emergency situation, the request will not be subject to the flow control limit and may be approved provided all other 

requirements are met. For the purposes of this subparagraph, an ERCOT-declared emergency situation is defined as the period of time that 

an ERCOT-issued emergency notice or energy emergency alert (EEA) 

(as defined in ERCOT Nodal Protocols, Section 2: Definitions and 

Acronyms (June 1, 2012) and issued as specified in ERCOT Nodal Protocols, Section 6: Adjustment Period and Real-Time Operations (June 

1, 20 12)) is applicable to the serving electric power generating system. 

The emergency situation is considered to end upon expiration of the 

emergency notice or EEA issued by ERCOT. 

This agency hereby certifies that the adoption has been reviewed 

by legal counsel and found to be a valid exercise of the agency's 

legal authority. 

Filed with the Office of the Secretary of State on April 12, 2013. 

TRD-201301490 

Robert Martinez 

Director, Environmental Law Division 

Texas Commission on Environmental Quality 

Effective date: May 2, 2013 

Proposal publication date: November 2, 2012 

For further information, please call: (512) 239-2141 

• 

CHAPTER 117. 

POLLUTION FROM NI 

SUBCHAPTER A. 

30 TAC §117.10 

• 

OGEN COMPOUNDS 

The Texas Commission on nvironmental Quality (TCEQ, 

agency, or commission) adopts he amendment to §117.10 with 

changes to the proposed text a published in the November 2, 

2012, issue of the Texas Regist r (37 TexReg 8722). 

If adopted, the amended §117.1 will be submitted to the United 

States Environmental Protectio Agency as a revision to the 

state implementation plan (SIP) 

Background and Summary of th Factual Basis for the Adopted 

Rule 

The Electric Reliability Council f Texas, Inc. (ERGOT) manages the electrical grid within th ERGOT region of Texas, with 

oversight by the Public Utility C mission of Texas (PUCT). On 

ADOPTED RULES April 26, 2013 38 TexReg 2623 
The adopted amendment imp ments TWC, §§5.1 02, 5.1 03, and 

5.105; THSC, §§382.002, 38 .011, 382.012, 382.016, 382.017, 

and 382.021; and FCAA, 42 SC, §§7 401, et seq. 

§101.379. ProgramAuditsan Reports. 

(a) No later than three y ars after the effective date of this section, and every three years there fter, the executive director will audit 

this program. 

(1) The audit will e luate the timing of credit generation 

and use, the impact of the progr on the state's attainment demonstration and the emissions of hazard us air pollutants, the availability and 

cost of credits, compliance by th participants, and any other elements 

the executive director may choo e to include. 

(2) The executive d ector will recommend measures to 

remedy any problems identified in the audit. The trading of discrete 

emission credits may be disco tinued by the executive director in 

part or in whole and in any rna er, with commission approval, as a 

remedy for problems identified i the program audit. 

(3) The audit data a d results will be completed and submitted to the United States Envir nmental Protection Agency and made 

available for public inspection w hin six months after the audit begins. 

(b) No later than Febru 1 of each calendar year, the executive director shall develop and ake available to the general public 

and the United States Environm ntal Protection Agency a report that 

includes the following informati n for the previous calendar year: 

(1) the amount of eac pollutant emission credits generated 

under this division; 

(2) the amount of ea h pollutant emission credits used under this division; 

(3) a summary of all rades completed under this division; 

and 

( 4) the amount of iscrete emission reduction credits 

(DERC) approved for use under ubsection (c) of this section. 

(c) No later than Octo be 1 of each year, the executive director 

will complete, and make availabl to the general public and the United 

States Environmental Protection Agency, an annual review to determine the number of DERCs ava able for potential use in the upcoming calendar year for the Dallas- ort Worth (DFW) eight-hour ozone 

nonattainment area. The annual eview will include the calculation of 

the flow control limit as specifie in subsection ( c )(2)(A) of this section to ensure noninterference wi attainment and maintenance of the 

ozone National Ambient Air Qu lity Standard (NAAQS) and the apportionment of approved DERC . 

(1) For the 2009 co trol period, the flow control limit 

for DERCs available for use is he number prescribed in the DFW 

Eight-Hour Ozone Attainment emonstration SIP Revision for the 

1997 eight-hour ozone standard, n tons per day, not to be exceeded in 

any day, where a day is a 24-hou period from midnight to midnight. 

(2) For any control eriod after 2009, the annual review 

will establish a flow controllimi for that year, in tons per day, not to 

be exceeded in any day, where a ay is a 24-hour period from midnight 

to midnight. 

(A) The flow con ol limit for a particular year will be 

determined using the following e uation: 

Figure: 30 TAC §101.379(c)(2)( ) (No change.) 

(B) If use of the ntire DERC bank would not interfere with attainment and mainte ance of the 1997 eight-hour ozone 

NAAQS in the DFW eight-hour ozone nonattainment area, then the 

number ofDERCs potentially a ailable for use is the total number of 

DERCs in the bank. 

(C) If the flow c trollimit, as calculated in the equation in subparagraph (A) of this p ragraph, is greater than the total number ofDERCs requested for use i accordance with §101.376(d) of this 

title (relating to Discrete Emissi n Credit Use) the executive director: 

(i) may appro e all requested Notice oflntentto Use 

Discrete Emission Credits (DEC 2 Form) submittals; and 

(ii) will consi er any late DEC-2 Forms submitted 

as provided under §101.376(d)( ) of this title that is not an Electric 

Reliability Council of Texas, In . (ERCOT)-declared emergency situation as defined in subparagrap (D) of this paragraph, but will not 

otherwise approve a late submitt I that would exceed the flow control 

limit established by the equation nder subsection (c)(2)(A) of this section. 

(D) If the DEC-2 Forms are submitted in response to 

an ERCOT-declared emergency ituation, the request will not be subject to the flow control limit and ay be approved provided all other 

requirements are met. For the p oses of this subparagraph, an ERCOT-declared emergency situatio is defined as the period of time that 

an ERCOT-issued emergency not ce or energy emergency alert (EEA) 

(as defined in ERCOT Nodal Pr tocols, Section 2: Definitions and 

Acronyms (June I, 2012) and issu d as specified in ERCOT Nodal Protocols, Section 6: Adjustment Per od and Real-Time Operations (June 

1, 2012)) is applicable to the servi g electric power generating system. 

The emergency situation is consi ered to end upon expiration of the 

emergency notice or EEA issued y ERCOT. 

This agency hereby certifies th the adoption has been reviewed 

by legal counsel and found to b a valid exercise of the agency's 

legal authority. 

Filed with the Office of the Sec etary of State on April 12, 2013. 

TRD-20 1301490 

Robert Martinez 

Director, Environmental Law Divisi n 

Texas Commission on Environmen al Quality 

Effective date: May 2, 2013 

Proposal publication date: Novem r 2, 2012 

For further information, please call: (512) 239-2141 

• • 

CHAPTER 117. CONTROL OF AIR 

POLLUTION FROM NITROGEN COMPOUNDS 

SUBCHAPTER A. DEFINITIONS 

30 TAC §117.10 

The Texas Commission on Environmental Quality (TCEQ, 

agency, or commission) adopts the amendment to §117.10 with 

changes to the proposed text as published in the November 2, 

2012, issue of the Texas Register (37 TexReg 8722). 

If adopted, the amended §117.1 0 will be submitted to the United 

States Environmental Protection Agency as a revision to the 

state implementation plan (SIP). 

Background and Summary of the Factual Basis for the Adopted 

Rule 

The Electric Reliability Council of Texas, Inc. (ERCOT) manages the electrical grid within the ERCOT region of Texas, with 

oversight by the Public Utility Commission of Texas (PUCT). On 

ADOPTED RULES April 26, 2013 38 TexReg 2623 
March 22, 2012, the PUCT repealed 16 TAC §25.507, to replace the Emergency Interruptible Load Service (ElLS) program 

with the Emergency Response Service (ERS) program (16 TAC 

§25.507). Like the ElLS program, the new ERS program is 

designed to help decrease the likelihood of requiring firm load 

shedding (i.e., rolling black-outs) during an ERGOT-declared energy emergency by decreasing the power demand on the electrical grid. Under the ERS program, participants commit to decrease their power consumption from the electrical grid during 

a declared energy emergency. ERS program participants might 

meet this commitment by decreasing overall power use, replacing power consumption from the grid with local generation by operating local emergency backup generators, or a combination of 

both. However, unlike the ElLS program, the new ERS program 

allows qualified participants to provide power back into the electrical grid for sale during an ERGOT-declared emergency under 

limited circumstances. 

Operating an emergency generator as part of ERGOT's former 

ElLS program meets the existing definition of an emergency situation in §117 .1 0. The existing definition of an emergency situation in §117.1 0 includes the period of time that an emergency notice issued by ERCOT is applicable to the serving electric power 

generating system and references the specific ERCOT protocols 

that detail the emergency notice. However, the Chapter 117 definition of an emergency situation also specifically excludes operation for purposes of supplying power for distribution to the electrical grid. Therefore, operation of an emergency generator that 

also provides power back to the electrical grid would not be considered an emergency situation under the current Chapter 117 

definition even if the operation were at the directive of ERCOT 

under the ERS program. 

While Chapter 117 would not prohibit companies from participating in the new ERS program, the Chapter 117 rules that apply in 

the Dallas-Fort Worth (DFW) and Houston-Galveston-Brazoria 

(HGB) 1997 eight-hour ozone nonattainment areas have specific 

provisions that restrict the non-emergency operational hours of 

emergency generators. For these sources to qualify for an exemption from the rule control requirements, participants in the 

ERS program would have to count hours of operation during an 

ERCOT emergency as non-emergency use if power is sold to 

the grid and might risk losing exemption status under Chapter 

117 if the operational hours exceed the exemption criteria. 

The adopted rulemaking updates the definition of emergency 

situation in §117.10 to ensure consistency with ERGOT's new 

ERS program. The adopted rulemaking references the version 

of the ERCOT protocols effective on June 1, 2012. The adopted 

rulemaking also revises the definition of emergency situation to 

reflect changes made by ERCOT to promote reliability during 

energy emergencies by allowing the operation of generators for 

purposes of selling power to the electric grid under limited circumstances. 

The amendment to §117.1 0 is adopted concurrently with an 

amendment to 30 TAC §1 01.379 that will be published in a 

separate rulemaking in this issue of the Texas Register. 

Demonstrating Noninterference under Federal Clean Air Act, 

§110(1) 

The commission provides the following information to demonstrate why the adopted change to the definition of emergency 

situation in Chapter 117 will not negatively impact the status of 

the state's progress towards attainment with the 1997 eight-hour 

ozone National Ambient Air Quality Standard (NAAQS), will not 

38 TexReg 2624 Apri/26, 2013 Texas Register 

interfere with control measures, and will not prevent reasonable 

further progress toward attainment of the ozone NAAQS. 

As mentioned elsewhere in this preamble, the Chapter 117 rules 

exempt certain sources in the DFW and HGB 1997 eight-hour 

ozone nonattainment areas that operate exclusively during 

emergency situations or operate for a limited number of hours 

in non-emergency situations. Under the existing Chapter 117 

rules, the period of time during an ERGOT-declared emergency 

is considered an emergency situation. The commission has 

interpreted this to mean that when demonstrating compliance 

with the Chapter 117 exemption criteria, participants in ERGOT's 

former ElLS program were not required to include the hours of 

operation for generators operated during an ERGOT-declared 

emergency as non-emergency operation. 

ERGOT's new ERS program promotes reliability during energy 

emergencies by allowing qualified participants to provide power 

for distribution to the electrical grrd during an ERGOT-declared 

emergency. Under the existing Chapter 117 rules, participants 

in ERGOT's new ERS program are not required to include 

the hours of operation for generators operated during an ERGOT-declared emergency when demonstrating compliance with 

the Chapter 117 exemption criteria as long as these sources do 

not provide power for distribution to the electrical grid. Because 

the existing Chapter 117 definition of an emergency situation 

specifically excludes operation for purposes of supplying power 

for distribution to the electrical grid, ERS program participants 

would have to count hours of operation during an ERGOT-declared emergency when demonstrating compliance with the 

Chapter 117 exemption criteria if power is provided back into 

the grid. This practice could result in ERS program participants 

losing exemption status under Chapter 117 if the non-emergency hours exceed the exemption criteria and potentially 

discourage ERS program participants from supplying excess 

generation back to the grid during an ERGOT-declared energy 

emergency. The adopted rulemaking prevents ERS program 

participants from potentially losing exemption status under 

Chapter 117 if they provide power to the electrical grid during an 

ERGOT-declared emergency. The adopted rulemaking ensures 

that the changes made to ERGOT's new ERS program do not 

narrow the scope of what the commission currently considers 

an emergency situation. 

The period of time during an ERGOT-declared emergency is 

currently considered an emergency situation under the existing 

Chapter 117 rules. The adopted revisions to the definition of 

emergency situation limit the circumstances under which a generator could provide power for distribution to the electrical grid 

to only those operations that are part of ERGOT's ERS program 

and in direct response to an instruction by ERCOT during the period of an ERCOT energy emergency alert (EEA). Therefore, the 

adopted amendment does not increase the number of sources 

that could qualify for exemption under the Chapter 117 rules or 

increase the frequency or duration of the operation during an 

emergency situation. For these reasons, the commission determined that the adopted rulemaking will not negatively impact the 

status of the state's attainment with the 1997 eight-hour ozone 

NAAQS and should not be considered as backsliding under the 

Federal Clean Air Act (FCAA). 

Section Discussion 

The commission adopts amendments to the definition of 

emergency situation in §117.1 0(15). The commission revises 

§117.10(15)(A)(ii) to reference the version of the ERCOT 

Protocols effective June 1, 2012. Additionally, in response to 
ERGOT's comments on this rulemaking, the commission is revising the definition of emergency situation in §117.10(15)(A)(ii) 

to also include operations in response to an ERGOT EEA. The 

commission is making this change to ensure the definition of 

emergency situation includes situations when system conditions deteriorate so rapidly that it is not possible for ERGOT 

to issue an emergency notice prior to declaring an EEA and 

subsequently deploying ERS. 

The commission adopts §117.10(15)(A)(vii) to include operation 

of an emergency generator as part of ERGOT's ERS program 

when the operation is in direct response to an instruction by 

ERGOT during the period of an ERGOT EEA as specified in 

§117.10(15)(A)(ii). In response to ERGOT's comments on this 

rulemaking, the commission is revising the proposed language 

in §117.10(15)(A)(vii) to refer to only those operations that occur during the period of an ERGOT EEA instead of the period 

of an ERGOT emergency notice. The intent of this rulemaking 

is to limit the circumstances under which an emergency generator can provide power for distribution to the electrical grid to only 

those operations that are part of ERGOT's ERS program and in 

direct response to ERGOT's dispatch instruction during the period of an ERGOT EEA. ERGOT only deploys ERS resources 

during an EEA, so it is unnecessary for the commission to refer 

to the period during an ERGOT emergency notice. 

The commission also adopts the reformatting of the existing 

§117.10(15)(8) description of the situations that are not considered emergency situations. Adopted clause (i) incorporates the 

existing portion of the definition indicating that an emergency 

situation does not include operation for training purposes or 

other foreseeable events. Existing §117.1 0(15)(8) indicates that 

an emergency situation does not include operation for purposes 

of supplying power for distribution to the electric grid. Adopted 

clause (ii) indicates that an emergency situation does not include 

operation for purposes of supplying power for distribution to the 

electric grid except as specified under § 117.1 0( 15)(A)(vii). The 

intent of adopted §117.10(15)(B)(ii) is to limit the circumstances 

under which an emergency generator can provide power for 

distribution to the electrical grid to only those operations that 

are part of ERGOT's ERS program and in direct response to 

ERGOT's dispatch instruction during the period of an ERGOT 

EEA. Adopted clause (ii) is necessary to reflect changes made 

by ERGOT to promote reliability during energy emergencies 

by allowing the operation of generators for purposes of selling 

power to the electric grid under limited circumstances. 

Final Regulatory Impact Determination 

The commission reviewed the adopted rule in light of the 

regulatory analysis requirements of Texas Government Code, 

§2001.0225 and determined that the adopted rulemaking does 

not meet the definition of a major environmental rule. Texas 

Government Code, §2001.0225 states that a major environmental rule is a rule for which the specific intent is to protect the 

environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the 

economy, a sector of the economy, productivity, competition, 

jobs, the environment, or the public health and safety of the 

state or a sector of the state. Furthermore, while the adopted 

rulemaking does not constitute a major environmental rule, 

even if it did, a regulatory impact analysis would not be required 

because the adopted rulemaking does not meet any of the four 

applicability criteria for requiring a regulatory impact analysis 

for a major environmental rule. Texas Government Code, 

§2001.0225 applies only to a major environmental rule that: 1) 

exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement 

of state law, unless the rule is specifically required by federal 

law; 3) exceeds a requirement of a delegation agreement or 

contract between the state and an agency or representative 

of the federal government to implement a state and federal 

program; or 4) adopts a rule solely under the general powers of 

the agency instead of under a specific state law. Specifically, 

it does not meet any of the four applicability criteria listed in 

Texas Government Code, §2001.0225 because: 1) the adopted 

rulemaking is part of the SIP, and as such is designed to meet, 

not exceed the relevant standard set by federal law; 2) parts 

of the adopted rulemaking are directly required by state law; 

3) no contract or delegation agreement covers the topic that 

is the subject of this adopted rulemaking; and 4) the adopted 

rulemaking is authorized by specific sections of Texas Health 

and Safety Code (THSC), Chapter 382 (also known as the 

Texas Clean Air Act), and the Texas Water Code, which are 

cited in the Statutory Authority section of this preamble. 

The adopted rule implements requirements of the FCAA. Under 42 United States Code (USC), §7 410, each state is required 

to adopt and implement a SIP containing adequate provisions 

to implement, attain, maintain, and enforce the NAAQS within 

the state. While 42 USC, §7410 generally does not require specific programs, methods, or reductions in order to meet the standard, SIPs must include enforceable emission limitations and 

other control measures, means, or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables 

for compliance as may be necessary or appropriate to meet the 

applicable requirements of this chapter (meaning 42 USC, Chapter 85, Air Pollution Prevention and Control, otherwise known as 

the FCAA). The provisions of the FCAA recognize that states are 

in the best position to determine what programs and controls are 

necessary or appropriate in order to meet the NAAQS. This flexibility allows states, affected industry, and the public to collaborate on the best methods for attaining the NAAQS for the specific 

regions in the state. Even though the FCAA allows states to develop their own programs, this flexibility does not relieve a state 

from developing a program that meets the requirements of 42 

USC, §7410. States are not free to ignore the requirements of 

42 USC, §7410, and must develop programs and control measures to assure that their SIPs provide for implementation, attainment, maintenance, and enforcement of the NAAQS within 

the state. The specific intent of the adopted rulemaking is merely 

an update to the definition of emergency situation in §117.1 0, ensuring consistency with ERGOT's new ERS program while also 

reflecting changes made by ERGOT to promote reliability during 

energy emergencies throughout the state under limited circumstances. 

While the adopted rulemaking protects the environment or reduces risks to human health from environmental exposure, it 

does not constitute a major environmental rule under Texas Government Code, §2001.0225(g)(3) because it does not adversely 

affect in a material way the economy, a sector of the economy, 

productivity, competition, or jobs, nor would the rulemaking adversely affect in a material way the environment, or the public 

health and safety of the state or a sector of the state. The rulemaking as a result is not subject to a regulatory impact analysis 

under Texas Government Code, §2001.0225 because it is not a 

major environmental rule. 

The requirement to provide a fiscal analysis of regulations in the 

Texas Government Code was amended by Senate Bill (SB) 633, 

ADOPTED RULES April 26, 2013 38 TexReg 2625 
75th Legislature, 1997. The intent of SB 633 was to require 

agencies to conduct a regulatory impact analysis of extraordinary rules. These are identified in the statutory language as major environmental rules that will have a material adverse impact 

and will exceed a requirement of state law, federal law, or a delegated federal program; or are adopted solely under the general 

powers of the TCEQ. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for SB 633 that concluded: based on an assessment of 

rules adopted by the agency in the past, it is not anticipated that 

the bill will have significant fiscal implications for the agency due 

to its limited application. The commission also noted that the 

number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in 

part, on the criteria set forth in the bill that exempted rules from 

the full analysis unless the rule was a major environmental rule 

that exceeded a federal law. 

The FCAA does not always require specific programs, methods, 

or reductions in order to meet the NAAQS; thus, states must 

develop programs for each nonattainment area to help ensure 

that those areas will meet the attainment deadlines. Because of 

the ongoing need to address nonattainment issues and to meet 

the requirements of 42 USC, §7410, the commission routinely 

proposes and adopts revisions to the SIP and rules. The legislature is presumed to understand this federal scheme. If each 

rule adopted for inclusion in the SIP were considered to be a 

major environmental rule that exceeds federal law, then every 

revision to the SIP would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent 

with the conclusions reached by the commission in its cost estimate and by the Legislative Budget Board (LBB) in its fiscal 

notes. Since the legislature is presumed to understand the fiscal 

impacts of the bills it passes and that presumption is based on 

information provided by state agencies and the LBB, the commission believes that the intent of SB 633 was only to require 

the full regulatory impact analysis for rules that are extraordinary in nature. While the rules have a broad impact, that impact 

is no greater than is necessary or appropriate to meet the requirements of the FCAA. For these reasons, rules adopted for 

inclusion in the SIP fall under the exception in Texas Government 

Code, §2001.0225(a), because they are required by federal law. 

The commission has consistently applied this construction to 

its rules since this statute was enacted in 1997. Since that 

time, the legislature has revised the Texas Government Code 

but left this provision substantially unamended. It is presumed 

that, when an agency interpretation is in effect at the time the 

legislature amends the laws without making substantial change 

in the statute, the legislature is deemed to have accepted the 

agency's interpretation. Central Power & Light Co. v. Sharp, 

919 S.W.2d 485, 489 (Tex. App. Austin 1995), writ denied with 

per curiam opinion respecting another issue, 960 S.W.2d 617 

(Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 

357 (Tex. App. Austin 1990, no writ) superseded by statute on 

another point of law, Tax Code § 112.1 08, Other Actions Prohibited, as recognized in, First State Bank of Dumas v. Sharp, 863 

S.W.2d 81, 83 (Tex. App. Austin 1993, no writ); Cf Humble Oil 

& Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney 

v. State Farm Mut. Auto Ins. Co., 9 S.W.3d 884, 893 (Tex. App. 

Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 24 

S.W.3d 581 (Tex. App. Austin 2000, pet. denied); and Coastal 

lndust. Water Auth. v. Trinity Portland Cement Div., 563 S.W.2d 

916 (Tex. 1978). 

38 TexReg 2626 April 26, 2013 Texas Register 

The commission's interpretation of the regulatory impact analysis requirements is also supported by a change made to the 

Texas Administrative Procedure Act (APA) by the legislature in 

1999. In an attempt to limit the number of rule challenges based 

upon APA requirements, the legislature clarified that state agencies are required to meet these sections of the APA against the 

standard of substantial compliance as required in Texas Government Code, §2001.035. The legislature specifically identified 

Texas Government Code, §2001.0225 as falling under this standard. The commission has complied with the requirements of 

Texas Government Code, §2001.0225. 

Even if the adopted rulemaking constitutes a major environmental rule under Texas Government Code, §2001.0225(g)(3), a 

regulatory impact analysis is not required because this exemption is part of the commission's SIP for making progress toward 

the attainment and maintenance of the NAAQS. Therefore, the 

adopted rulemaking does not exceed a standard set by federal 

law or exceed an express requirement of state law, since they 

are part of an overall regulatory scheme designed to meet, not 

exceed the relevant standard set by federal law (NAAQS). The 

commission is charged with protecting air quality within the state 

and to design and submit a plan to achieve attainment and maintenance of the federally mandated NAAQS. The Third District 

Court of Appeals upheld this interpretation in Brazoria County 

v. Texas Commn on Envtl. Quality, 128 S.W. 3d 728 (Tex. 

App. - Austin 2004, no writ). The specific intent of the adopted 

rulemaking is merely an update to the definition of emergency 

situation in §117.1 0, ensuring consistency with ERGOT's new 

ERS program while also reflecting changes made by ERGOT 

to promote reliability during energy emergencies throughout the 

state under limited circumstances. This adoption, therefore, 

does not exceed an express requirement of federal law. The 

amendment is needed to implement state law but does not 

exceed those new requirements. Finally, this rulemaking was 

not developed solely under the general powers of the agency 

but is authorized by specific sections of THSC, Chapter 382, 

which are cited in the Statutory Authority section of this preamble, including THSC, §382.012 and §382.019. Because this 

adopted rulemaking does not meet any of the four applicability 

requirements, Texas Government Code, §2001.0225(b) does 

not apply and a regulatory impact analysis is not required. 

The commission invited public comment regarding the draft regulatory impact analysis determination during the public comment 

period. No comments were received on the regulatory impact 

analysis determination. 

Takings Impact Assessment 

The commission evaluated the adopted rulemaking and 

performed an analysis of whether the adopted rulemaking 

constitutes a taking under Texas Government Code, Chapter 

2007. The commission's preliminary assessment indicates 

Texas Government Code, Chapter 2007 does not apply. 

Under Texas Government Code, §2007.002(5), taking means: 

"(A) a governmental action that affects private real property, in 

whole or in part or temporarily or permanently, in a manner that 

requires the governmental entity to compensate the private real 

property owner as provided by the Fifth and Fourteenth Amendments to the United States Constitution or Section 17 or 19, Article I, Texas Constitution; or (B) a governmental action that: (i) 

affects an owner's private real property that is the subject of the 

governmental action, in whole or in part or temporarily or permanently, in a manner that restricts or limits the owner's right to the 

property that would otherwise exist in the absence of the govern-
mental action; and (ii) is the producing cause of a reduction of at 

least 25 percent in the market value of the affected private real 

property, determined by comparing the market value of the property as if the governmental action is not in effect and the market 

value of the property determined as if the governmental action 

is in effect." 

Promulgation and enforcement of the rulemaking would be neither a statutory nor a constitutional taking of private real property. 

The primary purpose of the rule is an update to Chapter 117, 

Subchapter A to ensure consistency with ERGOT's new ERS 

program. This rule is not burdensome, restrictive, or limiting 

of rights to private real property because the rulemaking regulates the use of electric generators in certain limited emergency 

situations. Furthermore, the rulemaking benefits the public by 

potentially decreasing the likelihood of requiring firm load shedding (i.e., rolling black-outs) when additional control measures 

are needed to achieve or maintain attainment of the federal air 

quality standards through the use of electric generators. The 

rulemaking does not affect a landowner's rights in private real 

property because this rulemaking does not burden, restrict, or 

limit the owner's right to property, nor does it reduce the value 

of any private real property by 25% or more beyond that which 

would otherwise exist in the absence of the regulations. Therefore, this rule does not constitute a taking under Texas Government Code, Chapter 2007. 

Consistency with the Coastal Management Program 

The commission reviewed the adopted rulemaking and found 

that it is subject to the Texas Coastal Management Program 

(CMP) in accordance with the Coastal Coordination Act, Texas 

Natural Resources Code, §§33.201 et seq., and therefore 

must be consistent with all applicable CMP goals and policies. 

The commission conducted a consistency determination for 

the adopted rule in accordance with Coastal Coordination Act 

Implementation Rules, 31 TAC §505.22 and found the adopted 

rulemaking is consistent with the applicable CMP goals and 

policies. 

The CMP goal applicable to the adopted rulemaking is the goal 

to protect, preserve, and enhance the diversity, quality, quantity, 

functions, and values of coastal natural resource areas (31 TAC 

§501.12(1 )). The CMP policy applicable to the adopted rulemaking is the policy that commission rules comply with federal regulations in 40 Code of Federal Regulations to protect and enhance 

air quality in the coastal areas (31 TAC §501.32). The adopted 

rulemaking will not increase emissions of air pollutants and is 

therefore consistent with the CMP goal in 31 TAC §501.12(1) 

and the CMP policy in 31 TAC §501.32. 

Promulgation and enforcement of this rule will not violate or exceed any standards identified in the applicable CMP goals and 

policies because the adopted rule is consistent with these CMP 

goals and policies and because the rule does not create or have 

a direct or significant adverse effect on any coastal natural resource areas. Therefore, in accordance with §505.22(e), the 

commission affirms that this rulemaking action is consistent with 

CMP goals and policies. 

The commission invited public comment regarding the consistency with the CMP during the public comment period. The commission received no comments concerning the consistency of 

this rulemaking with the Texas CMP. 

Effect on Sites Subject to the Federal Operating Permits Program 

The adopted amendment will not require any changes to federal 

operating permits. 

Public Comment 

The commission scheduled a public hearing in Austin on November 28, 2012. However, the commission did not officially open 

the hearing because no one registered to provide comments. 

The public comment period closed on December 5, 2012. The 

commission received comments from the Association of Electric Companies of Texas (AECT), Blue Sky Environmental LLC 

(Blue Sky), Calpine Corporation (Calpine), EnerNOC, Inc. (EnerNOC), EPA, ERCOT, Exelon Corporation (Exelon), and NRG 

Texas Power LLC, (NRG). AECT submitted comments on behalf 

of AEP Texas, CenterPoint Energy, El Paso Electric, Entergy, 

GDF SUEZ, Nextera Energy, Lone Star Transmission, Oncor, 

TXU Energy, Luminant, NRG, Reliant, TNMP, and Xcel Energy. 

Response to Comments 

Comment 

AECT, Blue Sky, EnerNOC, ERCOT, and NRG expressed support for the proposed revisions to the definition of emergency 

situation in §117.10. EPA expressed appreciation for efforts to 

update the references to ERGOT's protocols in §117.10. 

Response 

The commission appreciates the support. 

Comment 

ERCOT commented that if system conditions deteriorate too 

rapidly it might not be possible to issue an emergency notice 

prior to declaring an EEA and subsequently deploying ERS. ERGOT recommended the commission amend §117.10(15)(A)(ii) 

to refer to ERGOT's dispatch of ERS rather than the issuance of 

an emergency notice to provide affected generators assurance 

that operation for ERS is always permissible. 

Blue Sky and EnerNOC recommended the commission not revise the definition of emergency situation to specify an ERCOT 

EEA level to account for emergency demand response programs 

initiated by Texas utilities that are experiencing voltage reductions. 

Response 

The intent of §117.10(15)(A)(ii) is to specify that emergency 

situations include operations during an ERGOT-declared emergency not operations during a utility-declared emergency. The 

commission agrees with ERCOT that operations in response 

to ERGOT's dispatch of ERS are always considered emergency situations. However, it is possible that the existing 

provision in §117.10(15)(A)(ii) could affect sources that are 

not participating in ERGOT's ERS program but are operating 

as a result of an ERGOT-declared emergency. Therefore, the 

commission is retaining the reference to emergency notice in 

§117.10(15)(A)(ii) to avoid unintended consequences that could 

result from limiting this provision solely to ERS operations. In 

response to ERGOT's comments, the commission is revising 

the definition of emergency situation to also include operations 

in response to an ERCOT EEA. The commission is making this 

change to ensure the definition of emergency situation includes 

situations when system conditions deteriorate so rapidly that 

it is not possible for ERCOT to issue an emergency notice 

prior to declaring an EEA and subsequently deploying ERS. In 

response to ERGOT's comments the commission is revising 

the proposed language in §117.10(15)(A)(vii) to refer to only 

ADOPTED RULES Apri/26, 2013 38 TexReg 2627 
those operations that occur during the period of an ERCOT 

EEA instead of the period of an ERCOT emergency notice. 

The purpose of this rulemaking is to ensure that participants in 

the ERS program may still claim operational hours during such 

energy emergencies as an emergency situation under Chapter 

117 rules. However, the adopted rule is also intended to limit 

the circumstances under which an emergency generator can 

provid~ power for distribution to the electrical grid to only those 

operations that are part of ERGOT's ERS program and in direct 

response to ERGOT's dispatch instruction during the period of 

an ERCOT EEA. Since ERCOT only deploys ERS resources 

during an EEA, it is unnecessary for the commission to refer to 

the period during an ERCOT emergency notice. 

Comment 

To address concerns about the certainty of the circumstances 

under which ERCOT will deploy ERS resources, ERCOT recommended that the commission reference the PUCT's ERS 

rule in 16 TAC §25.507 rather than the ERCOT Nodal Protocols 

referenced in the proposed rules. ERCOT expressed concern 

that the frequent revisions to the Nodal Protocols could create confusion as to the applicability of §117.10(15)(A)(ii) and 

§101.379(c)(2)(D). ERCOT suggested the commission could 

more easily monitor the infrequent changes to the PUCT rules 

than the numerous ongoing proposals to revise the ERCOT 

Nodal Protocols referenced in the proposed rules. 

NRG also recommended avoiding references to specific ERCOT 

protocols that are likely to change periodically. NRG recom-

~ended modifying §117.10(15)(A)(ii) to instead refer to the penod of t1me that an engine is operating in response to an ER-

<?OT-issued emergency notice of imminent emergency conditions, such as unusually low frequency, equipment overload, capacity or energy deficiency, or unacceptable voltage level. 

Response 

The commission is aware that the ERCOT Nodal Protocols references in §117.10(15) are frequently revised and have been revised since the commission first proposed this rulemaking. However, §117.10(15) and the Chapter 117 rules that reference this 

term are a part of the SIP and the revised §117.10(15) is subject 

to EPA rev1ew and approval. Specificity is needed in the rule regarding the circumstances under which ERCOTwill deploy ERS 

resources to help ensure EPA approval of the revised rule. While 

the PUCT's ERS rule in 16 TAC §25.507 speaks to the intent of 

deploying the ERS program during an EEA event and authorizes ERCOT to create the ERS program, 16 TAC §25.507 does 

not provide specific restrictions on the deployment of the ERS 

program to emergencies only. The level of detail in the current 

16 TAC §25.507 is not sufficient to ensure that the definition in 

§117.1 0(15) does not include the dispatch of ERS outside of ERCOT's-declared energy emergencies. Likewise, the suggested 

description of an ERGOT-issued emergency notice of imminent 

emergency conditions does not sufficiently detail the specific circumstances under which ERCOT will deploy ERS resources. To 

ensure that the amendments to §117.10(15) can be approved by 

the EPA as part of the SIP, the commission respectfully declines 

to make the suggested changes. 

Comment 

AECT commented that because it has concerns about how the 

use of the term "demand response" has been expanded to include non-emergency situations, AECT supports limiting the def1n1t1on of emergency situation to those operations that are part 

of an ERCOT ERS program and are in direct response to an in38 TexReg 2628 April 26, 2013 Texas Register 

str~ction by ERCOT during the period of an ERCOT emergency 

not1ce. NRG recommended that this rule only apply to units in 

emergency demand response programs that are limited to rare 

instances where grid stability is threatened after all other potential remedies have been exhausted. 

To account for emergency demand response programs initiated 

by Texas utilities that are experiencing voltage reductions, Blue 

Sky and EnerNOC recommended the commission revise the definition of emergency situation to also include operation in response to a utility-declared emergency. 

Response 

~he commi~sion agrees that the definition of emergency situation should Include operations in direct response to an instruction 

by E~COT during the per!od of an ERGOT-declared emergency. 

As d1scussed elsewhere tn the Response to Comments section 

of the preamble .. the commission is also revising the proposed 

rul~ langu~ge to Include operations that are in direct response to 

an 1nstruct1on by ERCOT during the period of an ERCOT EEA. 

T_he c~mmission _does not agree that the definition of emergency 

s1tuat1on should Include operations that occur in response to a 

utility-declared emergency. The suggested change would decrease the stnnge~~Y of t~e existing rule by expanding the scope 

of the current def1ntt1on to Include additional situations that would 

not currently be considered emergency situations. Because the 

EPA has approved the existing rule as part of the SIP, the suggested expans1on of the definition could be considered backsliding an? result in the EPA's disapproval of the rulemaking. The 

comm1ss1on makes no change in response to these comments. 

Comment 

Blue Sky and EnerNOC recommended the commission provide 

guidance regarding the SIP process. The commenters also requested the commission confirm that the following assumptions 

are correct:_ 1) the revisions to § 117.1 0 will not be fully imple-

~~nt~d u~ttl the EPA approves the SIP revision; 2) engines part1c1pat1ng 1n the ERS and other utility-sponsored emergency demand response programs without sending power to the electric 

grid can continue to operate under the definition of emergency 

s1tuat1on unt1l the references to the appropriate protocols are 

changed;. and 3) emergency engines could not send power to 

the electnc gnd under an emergency situation until the SIP revision is approved. 

Response 

The Texas Water Code authorizes the commission to propose 

and adopt rules necessary to carry out its powers and duties. 

Once adopted, ~he commission files the rule with the Secretary 

of State for publt~at1on 1n the Texas Register. This action usually 

occurs the f1rst Fnday after adoption. The rule becomes effective 

2~ c~lendar days after filing and is fully enforceable by the comm1ss1_on from that time on irrespective of EPA approval of the rule 

rev1s1on as part of the SIP. Therefore, beginning on the effective 

date of the rule, the definition of emergency situation will include 

operations in direct response to an instruction by ERCOT during 

the period o~ an ~RCOT~declared emergency that supply power 

to the electnc gnd. As d1scussed elsewhere in the Response to 

Commen~s sect1on o~ the preamble, the definition of emergency 

s1tuat1on 1n §117.1 0 Includes operations during an ERGOT-declared emergency but does not include other utility-sponsored 

emergency demand response programs. 

Comment 
Calpine recommended the commission remove the exemption 

afforded to ERS participants and require that all commercial generation meet best available control technology and reasonably 

available control technology requirements. Exelon requested 

the commission abandon its efforts to exempt from pollution controls units that sell power back to the electrical grid and require 

all commercial generation to satisfy the commission's pollution 

control requirements. 

Calpine and Exelon commented that exempting commercial 

backup generation from air quality regulations would negatively 

affect air quality by expanding the number of high-emitting 

diesel engines; discouraging investment in new, low-emitting 

generation; and providing an unnecessary subsidy to high-emitting sources. Calpine also commented that the proposed rule 

might not benefit electric reliability. 

Response 

The commenters' suggested changes to revoke exemptions for 

emergency backup generators are outside the scope of this rulemaking. The Chapter 117 rules exempt certain sources in the 

DFW and HGB 1997 eight-hour ozone nonattainment areas that 

operate exclusively during emergency situations or operate for 

a limited number of hours in non-emergency situations. The exemptions that reference the definition of emergency situation for 

this purpose were not proposed for revision with this rulemaking. 

The intent of the existing Chapter 117 rules is to ensure that 

operation during an ERGOT-declared emergency is not considered non-emergency operation when demonstrating compliance 

with the Chapter 117 exemption criteria. Under ERGOT's former 

ElLS program, affected resources reduced electric consumption 

by using on-site backup generation but did not supply power to 

the electric grid. Therefore, the restriction on supplying power 

for distribution to the electric grid in §117.10(15)(8) did not affect ElLS program participants. The amendments to §117.1 0(15) 

ensure that the changes made to ERGOT's new ERS program, 

which allow participants to provide power for distribution to the 

electrical grid, do not narrow the scope of what the commission 

currently considers an emergency situation. The adopted rulemaking does not relieve affected sources from the obligation to 

meet any air quality regulation that currently applies. 

The commission does not agree that the revisions to §117.10(15) 

will negatively affect air quality by expanding the number of highemitting diesel engines, discouraging investment in low-emitting 

generation, or subsidizing high-emitting sources. The dispatch 

of ERS resources is limited to rare instances where the reliability of the ERGOT system is threatened and all other potential 

solutions have been exhausted. ERGOT has dispatched emergency response resources for a total of 30 hours since 2006. 

Operation of emergency generators during an ERGOT-declared 

emergency under the previous ElLS program was considered an 

emergency situation under the existing Chapter 117 rules. The 

adopted revisions to §117.1 0(15) are intended to clarify the definition with regard to such emergencies and account for the revisions that ERGOT has made in the new ERS program. Adopted 

§117.1 0(15)(B)(ii) only allows operation of an emergency generator for supplying power to the electrical grid to be considered 

an emergency situation if the operation is part of ERGOT's ERS 

program and in direct response to instruction by ERGOT during 

an EEA. The purpose of this rulemaking is to ensure that participants in the ERS program may still claim operational hours during such energy emergencies as an emergency situation under 

Chapter 117 rules. Therefore, the commission does not consider 

the rulemaking as expanding the number of stationary diesel engines in operation or as providing a subsidy for diesel engines. 

Additionally, owners and operators of emergency generators that 

seek exemption from Chapter 117 rules must still meet all applicable criteria before qualifying for an exemption. The commission has previously incorporated provisions in the exemption 

criteria for emergency stationary diesel engines to help ensure 

that emissions from exempt diesel engines are minimized. For 

example, as part of the exemption criteria, stationary diesel engines in the DFW and HGB areas that are installed, modified, 

reconstructed, or relocated after specific dates in the Chapter 

117 rules are required to meet the corresponding emission standards for non-road engines in 40 Code of Federal Regulations 

§89.112(a), Table 1, that are in effect at the time the engine was 

installed, modified, reconstructed, or relocated. 

While the commission cannot quantify the effects of this revision 

on electric reliability, the commission does not agree with the 

commenters' assertion that there is no reliability-related rationale 

for this rulemaking. ERGOT's new ERS program promotes reliability during energy emergencies by allowing qualified participants to provide power for distribution to the electrical grid during 

an ERGOT-declared emergency. As discussed elsewhere in the 

Response to Comments Section of this preamble, the purpose of 

this rulemaking is to ensure that participants in the ERS program 

continue to be allowed to count operation in response to an ERGOT-declared emergency as an emergency situation. While the 

adopted revisions to §117.10(15) do not directly promote reliability, the rulemaking helps ensure that Chapter 117 rules will not 

be a disincentive to the ERS program by forcing participants to 

count emergency operation as non-emergency hours. The commission makes no changes in response to these comments. 

Comment 

ERGOT commented that since the operation of a generator 

for ERS purposes would always fall within the coverage of 

§117.1 0(15)(A)(ii), creating an additional exemption for the operation of ERS generators in §117.1 0(15)(A)(vii) is unnecessary. 

ERGOT suggested deleting §117.10(15)(A)(vii) and revising 

§117.1 0(15)(B)(ii) to reference §117.1 0(15)(A)(ii) instead of 

§117 .1 0(15)(A)(vii). 

NRG supported explicitly including emergency demand response events under the definition of emergency situation. 

However, instead of adding this language as a new provision under §117.10(15)(A)(vii), NRG recommended modifying 

§117.10(15)(A)(ii) to the period of time that an engine is operating in response to an ERGOT-issued emergency notice 

of imminent emergency conditions, such as unusually low 

frequency, equipment overload, capacity or energy deficiency, 

or unacceptable voltage level. 

Response 

The intent of this rulemaking is to limit the circumstances under 

which an emergency generator can provide power for distribution 

to the electrical grid to only those operations that are both part of 

ERGOT's ERS program and in direct response to ERGOT's dispatch instruction during the period of an ERGOT EEA. It is possible that the existing provision in §117.10(15)(A)(ii) could affect 

sources that are not participating in ERGOT's ERS program but 

are operating as a result of an ERGOT-declared emergency. The 

commission is adding the additional detail in §117.10(15)(A)(vii) 

and (B)(ii) to explicitly limit the circumstances under which an 

emergency generator could provide power for distribution to the 

electrical grid to only those operations that are part of ERGOT's 

ADOPTED RULES April 26, 2013 38 TexReg 2629 
ERS program. The commission makes no change in response 

to these comments. 

As discussed elsewhere in the Response to Comments section 

of this preamble, in response to ERGOT's comments the commission is revising the proposed language in §117.10(15)(A)(vii) 

to refer to only those operations that occur during the period of 

an ERCOT EEA instead of the period of an ERCOT emergency 

notice. The intent of this rulemaking is to limit the circumstances 

under which an emergency generator can provide power for distribution to the electrical grid to only those operations that are 

part of ERGOT's ERS program and in direct response to ERGOT's dispatch instruction during the period of an ERCOT EEA. 

ERCOT only deploys ERS resources during an EEA, so it is unnecessary for the commission to refer to the period during an 

ERCOT emergency notice. 

Comment 

NRG stated its belief that the current Chapter 117 definition of 

emergency situation does not preclude an engine from operating as part of an emergency demand response program and 

the intent of §117.10(15)(8) was to prevent those engines that 

supply power for distribution to the grid for economic gain unrelated to imminent emergency conditions from being classified as 

emergency engines, thus avoiding environmental controls. As 

such, NRG supported TCEQ's proposal to explicitly differentiate between these two operating scenarios and recommended 

§117.10(15)(8) be amended as proposed by the commission. 

Response 

The commission appreciates the support and made no changes 

to the rulemaking in response to this comment. 

Comment 

NRG supported aligning the Chapter 117 definition of emergency 

situation with ERGOT's emergency demand response program 

in lieu of establishing an annual limit on emergency demand 

response operation to allow ERCOT to manage and optimize 

emergency demand response operations. 

Response 

The commission appreciates the support. 

Statutory Authority 

The amendment is adopted under the authority of the following: Texas Water Code (TWC), §5.102, General Powers, TWC, 

§5.1 03, Rules, and TWC, §5.1 05, General Policy (these provisions authorize the commission to adopt rules necessary to carry 

out its powers and duties as well as all general policies under 

the TWC); Texas Health and Safety Code (THSC), Texas Clean 

Air Act (TCAA), §382.017, Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the 

TCAA; THSC, §382.002, Policy and Purpose, which establishes 

the commission's purpose to safeguard the state's air resources, 

consistent with the protection of public health, general welfare, 

and physical property; THSC, §382.011, General Powers and 

Duties, which authorizes the commission to control the quality 

of the state's air; and THSC, §382.012, State Air Control Plan, 

which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; and 

THSC, §382.051 (d), Permitting Authority of Commission; Rules, 

which authorizes the commission to adopt rules as necessary 

to comply with changes in federal law or regulations applicable 

to permits under THSC, Chapter 382. Finally, the amendment 

is also adopted under Federal Clean Air Act (FCAA), 42 United 

38 TexReg 2630 April 26, 2013 Texas Register 

States Code (USC), §§7 401, et seq., which requires states to 

submit State Implementation Plan revisions that specify the manner in which the National Ambient Air Quality Standards will be 

achieved and maintained within each air quality control region of 

the state. 

The adopted amendment implements TWC, §§5.1 02, 5.1 03, and 

5.105; THSC, §§382.002, 382.011, 382.012, 382.016, 382.017, 

and 382.021; and FCAA, 42 USC, §§7401 et seq. 

§ 117.10. Definitions. 

Unless specifically defined in the Texas Clean Air Act or Chapter 101 

of this title (relating to General Air Quality Rules), the terms in this 

chapter have the meanings commonly used in the field of air pollution 

control. Additionally, the following meanings apply, unless the context clearly indicates otherwise. Additional definitions for terms used 

in this chapter are found in §3.2 and § 101.1 of this title (relating to Definitions). 

(1) Annual capacity factor--The total annual fuel consumed by a unit divided by the fuel that could be consumed by the unit 

if operated at its maximum rated capacity for 8, 760 hours per year. 

(2) Applicable ozone nonattainment area--The following 

areas, as designated under the 1990 Federal Clean Air Act Amendments. 

(A) Beaumont-Port Arthur ozone nonattainment area-

-An area consisting of Hardin, Jefferson, and Orange Counties. 

(B) Dallas-Fort Worth ozone nonattainment area--An 

area consisting of Collin, Dallas, Denton, and Tarrant Counties. 

(C) Dallas-Fort Worth eight-hour ozone nonattainment 

area--An area consisting of Collin, Dallas, Denton, Ellis, Johnson, 

Kaufman, Parker, Rockwall, and Tarrant Counties. 

(D) Houston-Galveston-Brazoria ozone nonattainment 

area--An area consisting ofBrazoria, Chambers, Fort Bend, Galveston, 

Harris, Liberty, Montgomery, and Waller Counties. 

(3) Auxiliary steam boiler--Any combustion equipment 

within an electric power generating system, as defined in this section, 

that is used to produce steam for purposes other than generating 

electricity. An auxiliary steam boiler produces steam as a replacement 

for steam produced by another piece of equipment that is not operating 

due to planned or unplanned maintenance. 

( 4) Average activity level for fuel oil firing--The product of 

an electric utility unit's maximum rated capacity for fuel oil firing and 

the average annual capacity factor for fuel oil firing for the period from 

January 1, 1990, to December 31, 1993. 

(5) Block one-hour average--An hourly average of data, 

collected starting at the beginning of each clock hour of the day and 

continuing until the start of the next clock hour. 

(6) Boiler--Any combustion equipment fired with solid, 

liquid, and/or gaseous fuel used to produce steam or to heat water. 

(7) Btu--British thermal unit. 

(8) Chemical processing gas turbine--A gas turbine that 

vents its exhaust gases into the operating stream of a chemical process. 

(9) Continuous emissions monitoring system (CEMS)--

The total equipment necessary for the continuous determination and 

recordkeeping of process gas concentrations and emission rates in 

units of the applicable emission limitation. 

(10) Daily--A calendar day starting at midnight and continuing until midnight the following day. 
(11) Diesel engine--A compression-ignited two- or fourstroke engine that liquid fuel injected into the combustion chamber ignites when the air charge has been compressed to a temperature sufficiently high for auto-ignition. 

(12) Duct burner--A unit that combusts fuel and that is 

placed in the exhaust duct from another unit (such as a stationary gas 

turbine, stationary internal combustion engine, kiln, etc.) to allow the 

firing of additional fuel to heat the exhaust gases. 

(13) Electric generating facility (EGF)--A unit that generates electric energy for compensation and is owned or operated by a 

person doing business in this state, including a municipal corporation, 

electric cooperative, or river authority. 

(14) Electric power generating system--One electric power 

generating system consists of either: 

(A) for the purposes of Subchapter C of this chapter 

(relating to Combustion Control at Major Utility Electric Generation 

Sources in Ozone Nonattainment Areas), all boilers, auxiliary steam 

boilers, and stationary gas turbines (including duct burners used in turbine exhaust ducts) at electric generating facility (EGF) accounts that 

generate electric energy for compensation; are owned or operated by 

an electric cooperative, municipality, river authority, public utility, or a 

Public Utility Commission of Texas regulated utility, or any of its successors; and are entirely located in one of the following ozone nonattainment areas: 

(i) Beaumont-Port Arthur; 

(ii) Dallas-Fort Worth; 

(iii) Dallas-Fort Worth eight-hour; or 

(iv) Houston-Galveston-Brazoria; 

(B) for the purposes of Subchapter E, Division 1 of 

this chapter (relating to Utility Electric Generation in East and Central 

Texas), all boilers, auxiliary steam boilers, and stationary gas turbines 

at EGF accounts that generate electric energy for compensation; are 

owned or operated by an electric cooperative, independent power 

producer, municipality, river authority, or public utility, or any of its 

successors; and are located in Atascosa, Bastrop, Bexar, Brazos, Calhoun, Cherokee, Fannin, Fayette, Freestone, Goliad, Gregg, Grimes, 

Harrison, Henderson, Hood, Hunt, Lamar, Limestone, Marion, 

McLennan, Milam, Morris, Nueces, Parker, Red River, Robertson, 

Rusk, Titus, Travis, Victoria, or Wharton County; or 

(C) for the purposes of Subchapter B of this chapter (relating to Combustion Control at Major Industrial, Commercial, and 

Institutional Sources in Ozone Nonattainment Areas), all units in the 

Houston-Galveston-Brazoria ozone nonattainment area that generate 

electricity but do not meet the conditions specified in subparagraph (A) 

of this paragraph, including, but not limited to, cogeneration units and 

units owned by independent power producers. 

(15) Emergency situation--As follows. 

(A) An emergency situation is any of the following: 

(i) an unforeseen electrical power failure from the 

serving electric power generating system; 

(ii) the period of time that an Electric Reliability 

Council of Texas, Inc. (ERCOT)-issued emergency notice or energy 

emergency alert (EEA) (as defined in ERCOT Nodal Protocols, Section 

2: Definitions and Acronyms (June 1, 2012) and issued as specified in 

ERCOT Nodal Protocols, Section 6: Adjustment Period and Real-Time 

Operations (June 1, 2012)) is applicable to the serving electric power 

generating system. The emergency situation is considered to end upon 

expiration of the emergency notice or EEA issued by ERCOT; 

(iii) an unforeseen failure of on-site electrical transmission equipment (e.g., a transformer); 

(iv) an unforeseen failure of natural gas service; 

(v) an unforeseen flood or fire, or a life-threatening 

situation; 

(vi) operation of emergency generators for Federal 

Aviation Administration licensed airports, military airports, or manned 

space flight control centers for the purposes of providing power in anticipation of a power failure due to severe storm activity; or 

(vii) operation of an emergency generator as part of 

ERCOT's emergency response service (as defined in ERCOT Nodal 

Protocols, Section 2: Definitions and Acronyms (June 1, 2012)) if the 

operation is in direct response to an instruction by ERCOT during the 

period of an ERCOT EEA as specified in clause (ii) of this subparagraph. 

(B) An emergency situation does not include: 

(i) operation for training purposes or other foreseeable events; or 

(ii) operation for purposes of supplying power for 

distribution to the electric grid, except as specified in subparagraph 

(A)( vii) of this paragraph. 

( 16) Functionally identical replacement--A unit that performs the same function as the existing unit that it replaces, with the 

condition that the unit replaced must be physically removed or rendered 

permanently inoperable before the unit replacing it is placed into service. 

(17) Heat input--The chemical heat released due to fuel 

combustion in a unit, using the higher heating value of the fuel. This 

does not include the sensible heat of the incoming combustion air. In 

the case of carbon monoxide (CO) boilers, the heat input includes the 

enthalpy of all regenerator off-gases and the heat of combustion of the 

incoming CO and of the auxiliary fuel. The enthalpy change of the fluid 

catalytic cracking unit regenerator off-gases refers to the total heat content of the gas at the temperature it enters the CO boiler, referring to 

the heat content at 60 degrees Fahrenheit, as being zero. 

(18) Heat treat furnace--A furnace that is used in the manufacturing, casting, or forging of metal to heat the metal so as to produce 

specific physical properties in that metal. 

( 19) High heat release rate--A ratio of boiler design heat 

input to firebox volume (as bounded by the front firebox wall where 

the burner is located, the firebox side waterwall, and extending to the 

level just below or in front of the first row of convection pass tubes) 

greater than or equal to 70,000 British thermal units per hour per cubic 

foot. 

(20) Horsepower rating--The engine manufacturer's maximum continuous load rating at the lesser of the engine or driven equipment's maximum published continuous speed. 

(21) Incinerator--As follows. 

(A) For the purposes of this chapter, the term "incinerator" includes both of the following: 

(i) a control device that com busts or oxidizes gases 

or vapors (e.g., thermal oxidizer, catalytic oxidizer, vapor combustor); 

and 

ADOPTED RULES April 26, 2013 38 TexReg 2631 
(ii) an incinerator as defined in § 101.1 of this title 

(relating to Definitions). 

(B) The term "incinerator" does not apply to boilers or 

process heaters as defined in this section, or to flares as defined in 

§ 101.1 of this title. 

(22) Industrial boiler--Any combustion equipment, not including utility or auxiliary steam boilers as defined in this section, fired 

with liquid, solid, or gaseous fuel, that is used to produce steam or to 

heat water. 

(23) International Standards Organization (ISO) conditions--ISO standard conditions of 59 degrees Fahrenheit, 1.0 

atmosphere, and 60% relative humidity. 

(24) Large utility system--All boilers, auxiliary steam boilers. and stationary gas turbines that are located in the Dallas-Fort Worth 

or the Dallas-Fort Worth eight-hour ozone nonattainment area, and 

were part of one electric power generating system on January 1, 2000, 

that had a combined electric generating capacity equal to or greater than 

500 megawatts. 

(25) Lean-bum engine--A spark-ignited or compressionignited, Otto cycle, diesel cycle, or two-stroke engine that is not capable of being operated with an exhaust stream oxygen concentration 

equal to or less than 0.5% by volume, as originally designed by the 

manufacturer. 

(26) Low annual capacity factor boiler, process heater, or 

gas turbine supplemental waste heat recovery unit--An industrial, commercial, or institutional boiler; process heater; or gas turbine supplemental waste heat recovery unit with maximum rated capacity: 

(A) greater than or equal to 40 million British thermal 

units per hour (MMBtu/hr), but less than I 00 MMBtu/hr and an annual 

heat input less than or equal to 2.8 (1 011 ) British thermal units per year 

(Btu/yr), based on a rolling 12-month average; or 

(B) greater than or equal to 100 MMBtu/hr and an annual heat input less than or equal to 2.2 (1 011 ) Btu/yr, based on a rolling 

12-month average. 

(27) Low annual capacity factor stationary gas turbine or 

stationary internal combustion engine--A stationary gas turbine or stationary internal combustion engine that is demonstrated to operate less 

than 850 hours per year, based on a rolling 12-month average. 

(28) Low heat release rate--A ratio of boiler design heat 

input to firebox volume less than 70,000 British thermal units per hour 

per cubic foot. 

(29) Major source--Any stationary source or group of 

sources located within a contiguous area and under common control 

that emits or has the potential to emit: 

(A) at least 50 tons per year (tpy) of nitrogen oxides 

(NO) and is located in the Beaumont-Port Arthur ozone nonattainment 

area; 

(B) at least 50 tpy ofNOxand is located in the DallasFort Worth or Dallas-Fort Worth eight-hour ozone nonattainment area; 

(C) at least 25 tpy ofNOxand is located in the HoustonGalveston-Brazoria ozone nonattainment area; or 

(D) the amount specified in the major source definition 

contained in the Prevention of Significant Deterioration of Air Quality 

regulations promulgated by the United States Environmental Protection Agency in 40 Code of Federal Regulations §52.21 as amended 

June 3. 1993 (effective June 3. 1994), and is located in Atascosa, 

Bastrop, Bexar, Brazos, Calhoun, Cherokee, Coma!, Fannin, Fayette, 

38 TexReg 2632 April 26, 2013 Texas Register 

Freestone, Goliad, Gregg, Grimes, Harrison, Hays, Henderson, Hood, 

Hunt, Lamar, Limestone, Marion, McLennan, Milam, Morris, Nueces, 

Red River, Robertson, Rusk, Titus, Travis, Victoria, or Wharton 

County. 

(30) Maximum rated capacity--The maximum design heat 

input, expressed in million British thermal units per hour, unless: 

(A) the unit is a boiler, utility boiler, or process heater 

operated above the maximum design heat input (as averaged over any 

one-hour period), in which case the maximum operated hourly rate 

must be used as the maximum rated capacity; or 

(B) the unit is limited by operating restriction or permit 

condition to a lesser heat input, in which case the limiting condition 

must be used as the maximum rated capacity; or 

(C) the unit is a stationary gas turbine, in which case 

the manufacturer's rated heat consumption at the International Standards Organization (ISO) conditions must be used as the maximum 

rated capacity, unless limited by permit condition to a lesser heat input, in which case the limiting condition must be used as the maximum 

rated capacity; or 

(D) the unit is a stationary, internal combustion engine, 

in which case the manufacturer's rated heat consumption at Diesel 

Equipment Manufacturer's Association or ISO conditions must be used 

as the maximum rated capacity, unless limited by permit condition to 

a lesser heat input, in which case the limiting condition must be used 

as the maximum rated capacity. 

(31) Megawatt (MW) rating--The continuous MW output 

rating or mechanical equivalent by a gas turbine manufacturer at International Standards Organization conditions, without consideration 

to the increase in gas turbine shaft output and/or the decrease in gas 

turbine fuel consumption by the addition of energy recovered from exhaust heat. 

(32) Nitric acid--Nitric acid that is 30% to 100% in 

strength. 

(33) Nitric acid production unit--Any source producing nitric acid by either the pressure or atmospheric pressure process. 

(34) Nitrogen oxides (NO)--The sum of the nitric oxide 

and nitrogen dioxide in the flue gas or emission point, collectively expressed as nitrogen dioxide. 

(35) Parts per million by volume (ppmv)--All ppmv emission specifications specified in this chapter are referenced on a dry basis. When required to adjust pollutant concentrations to a specified 

oxygen (0,) correction basis, the following equation must be used. 

Figure: 30 TAC §117.10(35) (No change.) 

(36) Peaking gas turbine or engine--A stationary gas turbine or engine used intermittently to produce energy on a demand basis. 

(3 7) Plant-wide emission rate--The ratio of the total actual 

nitrogen oxides mass emissions rate discharged into the atmosphere 

from affected units at a major source when firing at their ma'<imum 

rated capacity to the total maximum rated capacities for those units. 

(38) Plant-wide emission specification--The ratio of the total allowable nitrogen oxides mass emissions rate dischargeable into 

the atmosphere from affected units at a major source when firing at 

their maximum rated capacity to the total maximum rated capacities 

for those units. 

(39) Predictive emissions monitoring system (PEMS)--

The total equipment necessary tor the continuous determination and 
recordkeeping of process gas concentrations and emission rates using 

process or control device operating parameter measurements and a 

conversion equation or computer program to produce results in units 

of the applicable emission limitation. 

( 40) Process heater--Any combustion equipment fired with 

liquid and/or gaseous fuel that is used to transfer heat from combustion gases to a process fluid, superheated steam, or water for the purpose of heating the process fluid or causing a chemical reaction. The 

term "process heater" does not apply to any unfired waste heat recovery heater that is used to recover sensible heat from the exhaust of any 

combustion equipment, or to boilers as defined in this section. 

(41) Pyrolysis reactor--A unit that produces hydrocarbon 

products from the endothermic cracking of feedstocks such as ethane, 

propane, butane, and naphtha using combustion to provide indirect 

heating for the cracking process. 

( 42) Reheat furnace--A furnace that is used in the manufacturing, casting, or forging of metal to raise the temperature of that metal 

in the course of processing to a temperature suitable for hot working or 

shaping. 

(43) Rich-burn engine--A spark-ignited, Otto cycle, fourstroke, naturally aspirated or turbocharged engine that is capable of 

being operated with an exhaust stream oxygen concentration equal to or 

less than 0.5% by volume, as originally designed by the manufacturer. 

(44) Small utility system--All boilers, auxiliary steam 

boilers, and stationary gas turbines that are located in the Dallas-Fort 

Worth or the Dallas-Fort Worth eight-hour ozone nonattainment area, 

and were part of one electric power generating system on January 1, 

2000, that had a combined electric generating capacity less than 500 

megawatts. 

(45) Stationary gas turbine--Any gas turbine system that is 

gas and/or liquid fuel fired with or without power augmentation. This 

unit is either attached to a foundation or is portable equipment operated at a specific minor or major source for more than 90 days in any 

12-month period. Two or more gas turbines powering one shaft must 

be treated as one unit. 

( 46) Stationary internal combustion engine--A reciprocating engine that remains or will remain at a location (a single site at a 

building, structure, facility, or installation) for more than 12 consecutive months. Included in this definition is any engine that, by itself or 

in or on a piece of equipment, is portable, meaning designed to be and 

capable of being carried or moved from one location to another. Indicia of portability include, but are not limited to, wheels, skids, carrying 

handles, dolly, trailer, or platform. Any engine (or engines) that replaces an engine at a location and that is intended to perform the same 

or similar function as the engine being replaced is included in calculating the consecutive residence time period. An engine is considered 

stationary if it is removed from one location for a period and then returned to the same location in an attempt to circumvent the consecutive 

residence time requirement. Nonroad engines, as defined in 40 Code 

of Federal Regulations §89.2, are not considered stationary for the purposes of this chapter. 

( 4 7) System-wide emission rate--The ratio of the total actual nitrogen oxides mass emissions rate discharged into the atmosphere from affected units in an electric power generating system or 

portion thereof located within a single ozone nonattainment area when 

firing at their maximum rated capacity to the total maximum rated capacities for those units. For fuel oil firing, average activity levels must 

be used in lieu of maximum rated capacities for the purpose of calculating the system-wide emission rate. 

( 48) System-wide emission specification--The ratio of the 

total allowable nitrogen oxides mass emissions rate dischargeable into 

the atmosphere from affected units in an electric power generating system or portion thereoflocated within a single ozone nonattainment area 

when firing at their maximum rated capacity to the total maximum rated 

capacities for those units. For fuel oil firing, average activity levels 

must be used in lieu of maximum rated capacities for the purpose of 

calculating the system-wide emission specification. 

( 49) Thirty-day rolling average--An average, calculated 

for each day that fuel is com busted in a unit, of all the hourly emissions 

data for the preceding 30 days that fuel was combusted in the unit. 

(50) Twenty-four hour rolling average--An average, calculated for each hour that fuel is combusted (or acid is produced, for a 

nitric or adipic acid production unit), of all the hourly emissions data 

for the preceding 24 hours that fuel was com busted in the unit. 

(51) Unit--A unit consists of either: 

(A) for the purposes of §§117.105, 117.205, 117.305, 

117.1005, 117.1105, and 117.1205 of this title (relating to Emission 

Specifications for Reasonably Available Control Technology (RACT)) 

and each requirement of this chapter associated with §§117.105, 

117.205, 117.305, 117.1005, 117.1105, and 117.1205 of this title, any 

boiler, process heater, stationary gas turbine, or stationary internal 

combustion engine, as defined in this section; 

(B) for the purposes of §§117.110, 117.210, 117.310, 

117.1010, 117.1110, and 117.1210 of this title (relating to Emission 

Specifications for Attainment Demonstration) and each requirement of 

this chapter associated with §§117.110, 117.210, 117.310, 117.1010, 

117.1110, and 117.1210 of this title, any boiler, process heater, stationary gas turbine, or stationary internal combustion engine, as defined in 

this section, or any other stationary source of nitrogen oxides (NO) at 

a major source, as defined in this section; 

(C) for the purposes of §117.2010 of this title (relating 

to Emission Specifications) and each requirement of this chapter associated with§ 117.2010 of this title, any boiler, process heater, stationary 

gas turbine (including any duct burner in the turbine exhaust duct), or 

stationary internal combustion engine, as defined in this section; 

(D) for the purposes of §117.2110 of this title (relating 

to Emission Specifications for Eight-Hour Attainment Demonstration) 

and each requirement of this chapter associated with §117.2110 of this 

title, any stationary internal combustion engine, as defined in this section; 

(E) for the purposes of §117.3310 of this title (relating 

to Emission Specifications for Eight-Hour Attainment Demonstration) 

and each requirement of this chapter associated with§ 117.3310 of this 

title, any stationary internal combustion engine, as defined in this section; or 

(F) for the purposes of§ 117.410 and § 117.1310 of this 

title (relating to Emission Specifications for Eight-Hour Attainment 

Demonstration) and each requirement of this chapter associated with 

§ 117.410 and§ 117.1310 of this title, any boiler, process heater, stationary gas turbine, or stationary internal combustion engine, as defined in 

this section, or any other stationary source ofNO, at a major source, as 

defined in this section. 

(52) Utility boiler--Any combustion equipment owned or 

operated by an electric cooperative, municipality, river authority, public utility, or Public Utility Commission of Texas regulated utility, fired 

with solid, liquid, and/or gaseous fuel, used to produce steam for the 

purpose of generating electricity. Stationary gas turbines, including 

ADOPTED RULES April 26, 2013 38 TexReg 2633 
any associated duct burners and unfired waste heat boilers, are not considered to be utility boilers. 

(53) Wood--Wood, wood residue, bark, or any derivative 

fuel or residue thereof in any form, including, but not limited to, sawdust, sander dust, wood chips, scraps, slabs, millings, shavings, and 

processed pellets made from wood or other forest residues. 

This agency hereby certifies that the adoption has been reviewed 

by legal counsel and found to be a valid exercise of the agency's 

legal authority. 

Filed with the Office of the Secretary of State on April 12, 2013. 

TRD-201301491 

Robert Martinez 

Director, Environmental Law Division 

Texas Commission on Environmental Quality 

Effective date: May 2, 2013 

Proposal publication date: November 2, 2012 

For further information, please call: (512) 239-2141 

• • 

SUBCHAPTER D. BUSTION 

CONTROL AT MINOR OURCES IN 

OZONE NONATTAINM NT AREAS 

DIVISION 2. DALLA FORT WORTH 

EIGHT-HOUR OZONE ONATTAINMENT 

AREA MINOR SOURC S 

30 TAC §§117.2103, 117.2130 117.2135, 117.2145 

The Texas Commission on nvironmental Quality (TCEQ, 

agency, commission) adopts amendments to §§117.2103, 

117.2130, 117.2135, and 117 2145 without changes to the 

proposed text as published in t e November 16, 2012 .. issue of 

the Texas Register (37 TexRe 9060) and the text w1ll not be 

republished. 

The adopted amendments will b submitted to the United States 

Environmental Protection Agen (EPA) as a revision to the state 

implementation plan (SIP). 

Background and Summary of th Factual Basis for the Adopted 

Rules 

On April 5, 2012, Halliburton nergy Service~, lncorpora~ed 

(Halliburton) submitted a peti on for rulemak1ng requestmg 

a partial exemption from the ules in 30 T~C Chapter 117, 

Subchapter D, Division 2 that li it nitrogen ox1des (NOJ emissions from minor sources in the Dallas-Fort Worth (DFW) 1997 

eight-hour ozone nonattainment area (DFW area). The commission approved the petition for r lemaking on May 30, 2012 and 

issued an order on June 1, 201 directing the executive director 

to examine the issues in the p ition and to initiate rulemaking 

(Project No. 2012-029-PET-NR. 

The unique service of the Hallib rton Drawworks Engine makes 

ongoing testing to demonstrate ompliance with the Chapter 117 

NO emission limits impractical nd comparatively more expensive than the stationary engin testing envisioned during the 

adoption of the Chapter 117 rul sin 2007. To comply with the 

Chapter 117 testing requiremen s, Halliburton must arrange for 

both emissions testing equipm nt (a normal and expected expense) and for the rental, transp rt, and use of a dynamometer, 

38 TexReg 2634 April 26, 2013 Texas Register 

which is typically used by engin manufacturers for testing purposes. Preparing the engine for installation of the dynamometer 

and returning the engine to oper tiona I status subsequent to the 

emissions testing presents signi icant safety hazards associated 

with the removal of the drive tra n and transmission, removal of 

the torque converter, and the p acement and use of non-dedicated hoisting equipment on the ig floor. Performing a compliant 

emissions test of the Drawworks Engine takes three to four days 

to complete, whereas complian emissions testing on a typical 

stationary engine only requires pproximately half a day. Additionally, engines used to raise a d lower down-hole equipment 

in actual oil and gas operations i the field, which the Drawworks 

Engine is designed to simulate, e typically not subject to similar 

Chapter 117 testing requirement because they are not installed 

at a location long enough to trig er the definition of a stationary 

internal combustion engine in § 17.1 0. The Drawworks Engine 

is subject to Chapter 117, Subch pter D, Division 2 because the 

equipment has been made statio ary to provide testing and training facilities for sources that are ot subject to the rule. 

The adopted change will expand the list of exempted sources in 

§117.2103 to include stationary iesel engines that are used exclusively for product testing and ersonnel training, operate less 

than 1, 000 hours per year on a r lling 12-month basis, and meet 

applicable Tier emission standar s for non-road engines listed in 

40 Code of Federal Regulations CFR) §89.112(a), Table 1 (October 23, 1998) in effect at the ti e of installation, modification, 

reconstruction, or relocation. Th adopted exemption is narrow 

in scope and consistent with the imilar existing exemptions for 

stationary diesel engines located at minor sources, such as stationary engines used in research and testing and stationary engines used for purposes of perfo ance verification and testing. 

The adopted change will also re se the operating requirements 

of §117.2130, the monitoring re uirements of §117.2135, and 

the recordkeeping requirements f §117.2145 to reflectthe new 

category of exempt engines. 

Demonstrating Noninterference nder Federal Clean Air Act, 

Section 110(1) 

The commission provides the fo lowing information to demonstrate why the adopted new exem tion in §117.21 03 will not negatively impact the status of the s ate's progress towards attainment with the 1997 eight-hour oz ne National Ambient Air Quality Standard (NAAQS), will not in erfere with control measures, 

and will not prevent reasonable rther progress toward attainment of the ozone NAAQS. 

On December 6, 2000, as part of he Houston-Galveston-Brazoria (HGB) attainment demonstrat on SIP revision, the commission adopted a new control strat y for stationary reciprocating 

internal combustion engines, boi ers, and process heaters located at minor industrial, comme cial, and institutional sources 

of NO in the HGB area. The ado ted rulemaking exempted engines ~sed for specific purposes, uch as those used in research 

and testing and those used for the purposes of performance verification and testing. 

On May 23, 2007, as part of the DFW 1997 eight-hour ozone 

attainment demonstration SIP revi ion, the commission adopted 

new emission control requiremen s for stationary reciprocating 

internal combustion engines locat d at minor industrial, commercial, and institutional sources of N x in the DFW area. The NOx 

emission reductions were necess ry for the DFW area to attain 

the 1997 eight-hour ozone NAAQ . Similar to the HGB rulemaking, the DFW rulemaking also ad pted exemptions for engines 

used for specific purposes, such s those used in research and