- .I.

(907) 780-2222 FAX (907) 463-3304 

ALASKA ELECTRIC LIGHT AND POWER COMPANY 5601 Tonsgard Court, Juneau, AK 99801-7201 

Lisa P. Jackson, Administrator 

U.S. Environmental Protection Agency 

Ariel Rios Building 

1200 Pennsylvania Avenue, N.W. 

Washington, DC 20460 

SUBJECT:	Petition for Exemption 

National Emission Standards for Hazardous Air Pollutants for 

Compression Ignition Reciprocating Internal Combustion Engines 

40 CFR 63, Subpart ZZZZ; Docket OAR-2002-0059 

Dear Administrator Jackson: 

The purpose of this letter is to request an exemption from 40 CFR 63 Subpart ZZZZ for 

Alaska Electric Light & Power ("AEL&P"). 

Our specific petition is that EPA provide an exemption from 40 CFR 63 Subpart ZZZZ, for: 

1. Each compression ignition ("CI") reciprocating internal combustion engine 

("RICE") deployed as backup for hydropower and other renewable energy 

generation, AND 

2. Each CI RICE which otherwise operates for less than 500 hours per year as 

determined on a multi-year basis. 

We further request that any Cl RICE operating less than 500 hours per year be exempted 

from the performance testing requirements of 40 CFR 63 Subpart ZZZZ.
The Petitioner 

AEL&P serves approximately 16,000 residential, commercial, and government 

customers in the City and Borough of Juneau, Alaska. The community is isolated: 

there are no roads into or out of Juneau - only local traffic and transport via 

water or air. There is no interconnection to a regional electrical grid and no 

natural gas supply. 

During most years, more than 98% of AEL&P's annual generation is provided by 

renewable hydro energy. However, due to the community's isolation and lack of 

an intertie to a regional electrical grid, AEL&P must provide 100% standby 

capacity which includes a mix of 15 diesel engines (Cl RICE) and 4 gas turbines. 

The diesel engines and gas turbines are permanently situated at three separate 

sources, facilities with distinct physical addresses. 

As shown in Exhibit 1, the 15 standby Cl RICE operate infrequently over a 10-year 

period - as an average for each engine, less than 50 full-load equivalent hours 

per year. However, the air quality permits for these units cannot restrict them to 

emergency or limited use only as defined in Subpart ZZZZ. The standby Cl RICE 

are called upon to perform peak load or base load duty as necessary when 

renewable energy resources are interrupted. While the standby Cl RICE are 

permitted for significant operation, all AEL&P facilities are area (non-major) 

sources of hazardous air pollutants. 

AEL&P is regulated by the Regulatory Commission of Alaska, is never guaranteed 

a return on investment, and has a strong incentive to minimize the use of 

standby Cl RICE. When standby generation is required, AEI..&P files a Cost of 

Power Adjustment with the Regulatory Commission of Alaska. With no markup 

or profit for diesel fuel permitted by the Regulatory Commission of Alaska, the 

Cost of Power Adjustment in winter 2009, for example, resulted in a tripling of 

the power price from 10.8 cents per kilowatt-hour to 30 cents per kilowatt-hour 

to cover the cost of diesel fuel for the standby generation. The price of diesel 

fuel during this period was $2.25 per gallon. In the prior year, customers paid 52 

cents per kilowatt-hour for one month of standby operation, and the average 

price of diesel fuel was $3.89 per gallon. 

Applicability and Requirements 

National Emission Standards for Hazardous Air Pollutants (NESHAP) Subpart ZZZZ 

was published in the Federal Register on March 3, 2010 and became effective on 

May 3, 2010. New Cl RICE are now subject to the rule requirements, and existing 

Cl RICE must meet the rule requirements by May 3, 2013. The focus of this
petition is primarily directed toward existing CI RICE in Juneau, with potential 

application to future standby Cl RICE as well. 

An existing CI RICE located at a major source or area source is subject to the rule. 

A major source of hazardous air pollutant (HAP) emissions is generally a 

stationary source that emits or has the potential to emit any single HAP at a rate 

of 10 tons or more per year or any combination of HAP at a rate of 25 tons or 

more per year. An area source of HAP emissions is a source that is not a major 

source, and there is no cle minimis level of emissions for an area source. 

Relevant to many of Alaska's electric utilities and AEL&P in particular, Section 

63.6590 of NESHAP Subpart ZZZZ identifies exemptions including emergency 

RICE, limited use RICE, and Alaska area sources not accessible by the Federal Aid 

Highway System (FAHS): 

1. Regarding the emergency engine exemption, the rule specifically states 

that RICE used for peak shaving are not considered to be emergency 

engines, and RICE used to supply power to an electric grid are not 

considered to be emergency engines. 

2. Regarding the limited use engine exemption, limited use RICE are those 

engines which operate less than 100 hours per year. 

3. Area sources not accessible by the FAHS are an exemption for very remote 

area sources in Alaska. Many rural Alaskan coastal communities like 

Juneau are considered part of the FAHS because they are served by the 

Alaska Marine Highway with drive-on ferry service. 

AEL&P's standby CI RICE do not qualify for exemption as emergency or limited 

use engines nor do they qualify for the FAHS exemption. 

Analysis of Rule Impact on AEL&P Operations and Customers 

This discussion is based primarily on a representative diesel engine, a 3600 hp 

(2500 kWe) Electro-Motive Diesel ("EMD") CI RICE which represents the 

workhorse of AEL&P's standby engines. 

AEL&P Engine Emissions 

Since 1972, EPA has published AP-42, Compilation of Air Pollutant Emission 

Factors, as the primary and latest compilation of EPA's emission factor 

information. The Petitioner referred to Section 3.4 Large Stationary Diesel and 

All Stationary Duel-fuel Engines for the emissions factors provided in Table 1. The
[MD nameplate capacity is 3600 hp, and the [MD diesel fuel consumption is 

equivalent to approximately 26.6 MMBtu/hr. 

Emission Factor AP-42 Emissions 

Pollutant Lb/MMBtu ____	(lb/hr) 

Benzene 7.76e-04 0.0206 

Toluene _____ 2.81e-04 0.0075 

Xylenes __________ 1.93e-04 _____	0.0051 

Propylene

______

______ 2.79e-03 _______ ____ 0.0021 

Formaldehyde ________ 7.89e-05 ______ 0.0007 

Acetaldehyde ____ 2.52e-05 0.0002	____ 

Acrolein 7.88e-06 0.0056 

Naphthalene 1.30e-04 0.0418

The uncontrolled emissions calculations presented in Table 1 are used in 

subsequent discussion. 

Engine Usage 

For purposes of determining risk and regulatory cost (see Regulatory Impact 

Analysis), EPA has assumed that engines subject to the Subpart ZZZZ rule will 

operate at least 1,000 hours per year. However, as shown in Exhibit 1, AEL&P's 

standby Cl RICE are normally operated for only a few hours each month over 

many years and then dispatched for one or more months to provide energy 

during the infrequent interruption of renewable resources. 

An ideal permit for Cl RICE at many Alaskan utilities would allow the engines to 

operate for a few hours each month for exercise and local grid issues but also 

allow them to operate for several months if needed to overcome a forced 

outage. Over a 5- or 10-year rolling average, operating hours would be relatively 

low. To our knowledge, there is no current permit mechanism under Title I or 

Title V which allows for a source to have such flexibility. Title I and Title V 

effectively require the owner/operator to permit the engines and the source for 

the maximum number of hours of operation possible under worst-case 

conditions. For this reason, neither an emergency category of 50 hours per year 

nor a limited use category of 100 hours per year would be acceptable for AEL&P's 

unique circumstances. 

Regarding hours of operation for emergency units, EPA's John Seitz issued a 

memorandum to Regional Air Directors for calculating potential to emit for 
emergency generators (September 6, 1995). As taken from the OAR Policy and 

Guidance Metarecord: 

"Inherent physical limitations, and operational design features which 

restrict the potential emissions of individual emission units, can be taken 

into account in determining PIE. The EPA believes that generators 

devoted to emergency uses are clearly constrained in their operation, in 

the sense that, by definition and design, they are used only during periods 

where electric power from public utilities is unavailable. The combined 

period for such power outages during any one year will vary somewhat, 

but an upper bound can be estimated which would never be expected to 

be exceeded absent extraordinary circumstances. Also, the duration of 

these outages are entirely beyond the control of the source; when they do 

occur, they rarely last more than a day. EPA, therefore, recommends that 

the PIE of emergency generators be determined based upon an estimate 

of the maximum amount of hours the generator could operate, taking into 

account: (1) the number of hours power would be expected to be 

unavailable, and (2) the number of hours for maintenance activities. An 

appropriate default assumption is 500 hours per year." 

At 500 hours per year, based on the emissions calculations in Table 1, we 

calculate that the EMD uncontrolled potential to emit would be less than 0.02 

tons per year of HAP (total of 41.8 pounds per year). More importantly, given 

normal operation of the EMD for about 50 hours per year, actual uncontrolled 

emissions of HAP would be 4 pounds per year. 

If EPA were to exempt from Subpart ZZZZ each electric utility CI RICE that actually 

operates less than 500 hours per year (especially over a multi-year period), 

AEL&P engines could be exempt from NESHAP ZZZZ under such conditions. 

Add-On Control Technology 

As shown in Table 2, from the final rule RIA for Subpart ZZZZ, add-on control is 

the most expensive element of the rule. 

Technology 

Diesel oxidation catalyst (DOC) 

Open crankcase ventilation (OCV)

Capital Cost ($2008) LAnnual Cost ($2008) 

$27.4 x hp -$939 4.99 x hp + $480 

$0.26 xj?pif97J$0.065 x hp + $254 
For AEL&P's example EMD, the capital cost of add-on control is just over 

$100,000 as estimated using the control cost data in Table 2. We have also 

discussed appropriate controls with vendors and arrive at an estimated capital 

cost of approximately $125,000 to $150,000. We note that construction in 

Juneau tends to be considerably more expensive than the Lower 48 due to the 

isolated nature of the community and concomitant logistics challenges as well as 

ambient conditions. 

For purposes of this discussion, we use $125,000 for EMD add-on control 

technology to meet the requirements of NESHAP ZZZZ. Assuming a 10-year 

period at 7% discount rate, the capital cost of the equipment is approximately 

$17,797 per year. EPA's estimated annual cost per Table 2 for a 3600 hp engine 

equates to $18,480 which we assume also includes O&M costs for operating 

1,000 hours per year. 

We noted previously that Cl RICE located at a major source of HAP would have 

the same capital cost as CI RICE located at an area source of HAP and operating 

infrequently. Annual operating costs include the costs related to decreased 

engine efficiency (higher fuel consumption) due to add-on controls; performance 

testing; monitoring, recordkeeping and reporting; and more. Operating for only a 

few hours each month may extend the life of the add-on control technology, but 

the overall annual costs for the first 10 years are likely to be quite similar for an 

engine that operates frequently and one that operates infrequently. 

For a typical scenario representing AEL&P operations, we assume the EMD is 

operated for 50 hours during a year with little to no interruption in the 

renewable energy resource. During such times, and using the lower $17,797 per 

year capital cost only estimate, the cost addition for the addon control 

technology is approximately 14 cents per kilowatt-hour. 

As previously discussed, the Cost of Power for AEL&P's diesel-fired electricity is in 

the range of 30 cents to 52 cents per kilowatt-hour. Thus, the add-on technology 

required for NESHAP ZZZZ will effectively increase the cost of backup power 

provided by the standby generation to a range of 44 cents to 66 cents per 

kilowatt-hour. 

We evaluated the cost/benefit of the rule in a manner consistent with best 

available control technology (cost of technology divided by quantity of pollutant 

reduced). Looking at a typical scenario of the EMD operating for exactly 50 hours 

during a year, we estimate uncontrolled HAP emissions at 0.002 tons per year (4
pounds). We assume a 70% control effectiveness will result in a controlled HAP 

emission of 0.0006 tons, for a quantity of HAP reduced equivalent to 0.0015 tons 

per year (2.9 pounds). 

At an annualized cost of $17,797 to reduce 0.0015 tons of HAP per year, a cost of 

$12,164,858 per ton of HAP removed does not appear to be a reasonable cost for 

the citizens of Juneau to bear. 

Performance Test Requirements 

Subpart ZZZZ requires an initial performance test of each Cl RICE and a test every 

8,760 hours of operation or 3 years, whichever comes first. EPA's cost estimate 

for performance testing is based on $1,165 per day of testing for a portable 

analyzer. Three 1-hour runs, on two engines each day, is estimated to run $583 

per engine. 

Considering the unique circumstances of AEL&P's operation, it should be clear 

that such requirement not only creates an economic burden and operational 

inconvenience on AEL&P, but this will also have an unnecessary effect on the 

environment. Testing an AEL&P EMD every 8,760 hours of full-load operation 

would result in more than 20 years between testing events for the most used Cl 

RICE in the AEL&P fleet and more than 700 years for the least used Cl RICE in the 

fleet. Whereas testing an EMD every 3 years will provide little benefit given the 

low number of hours of actual operation and unexpected change in operational 

characteristics. Nevertheless, operation for the initial testing and periodic 

performance tests currently required by NESHAP ZZZZ will cause fossil fuel to be 

consumed in significant amounts along with the unnecessary emissions of criteria 

pollutants, HAP and carbon dioxide. 

Conclusion 

We believe that the facts and analyses presented in this petition demonstrate 

that 40 CER 63 Subpart ZZZZ will have significant, detrimental economic 

consequences for the community of Juneau, consequences with no 

commensurate health cr environmental benefit. At an annualized cost of 

$17.79] to reduce 0.0015 tons of HAP per year, a cost of $12,164,858 per ton of 

HAP removed does not appear to be a reasonable cost for the citizens of Juneau 

to bear. 

With respect to 40 CFR 63 Subpart ZZZZ, AEL&P requests that EPA provide an 

exemption from 40 CFR 63 Subpart ZZZZ, for:
1. Each compression ignition ("Cl") reciprocating internal combustion engine 

("RICE") deployed as backup for hydropower and other renewable energy 

generation, AND 

2. Each Cl RICE which otherwise operates for less than 500 hours per year as 

determined on a multi-year basis. 

We further request that any Cl RICE operating less than 500 hours per year be 

exempted from the performance testing requirements of 40 CFR 63 Subpart 

zzzz. 

We look forward to your response and appreciate your consideration of the 

unique circumstances operating an Alaska utility. 

K. Scott Willis 

Vice President 

Attachment: 

Exhibit 1 Annual and Average Annual Full-Load Equivalent Hours of Operation 

Copies: 

EPA Region 10, Office of Air, Waste, and Toxics 

1200 Sixth Avenue, M/S OAQ-107 

Seattle, Washington 98101 

Attn: Nancy Helm, Manager, helm.nancy@epa.gov

Alaska Department of Environmental Conservation 

Air Permit Program 

410 Willoughby Aye, Ste 303 

Juneau, Alaska 99811 

Attn: James Plosay, Juneau Office Supervisor, jim.plosay@alaska.gov

Tapis Energy Group, Inc. 

P0 Box 270116 

Fort Collins, CO 80527 

Attn: Edward Settle, President, e.settle@tapisenergy.com
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ALASKA LULIU LIGHT & POWER co 

5601 Tonsgard Court 

Juneau, AK 9980172O1'

Lisa P. Jackson 

U.S. Environmental Prot€ 

Agency 

Ariel Rios Building 

1200 Pennsylvania Aven 

Washington, DC 20460