## From: "Higgins, Cortney" <Cortney_Higgins@omb.eop.gov> To: Melanie King/RTP/USEPA/US@EPA Cc: RobertJ Wayland/RTP/USEPA/US@EPA Date: 05/02/2012 06:53 PM Subject: RICE Reconsideration Rule Hi Melanie, Attached is a summary of interagency comments received on the RICE proposal, as well as redline edits/comments on the preamble and SI RIA. Please let me know if you have any questions. Regards, Cortney (See attached file: EO_12866_NESHAP_RICE_Spark_Ignition_RIA_proposal_2060- AQ58_InteragencyCommentsunderEO13563.docx)(See attached file: RICE_2060AQ58_InteragencyCommentsunderEO13563_May2.docx)(See attached file: EO_12866_RICE_NESHAP_Reconsideration_Proposal_2060- AQ58_522012_InteragencycommentsunderEO13563.docx)***E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

**E.O. 12866 NESHAP RICE Spark Ignition Engines 2060-AQ58 Proposal 20120315**  

### April 2012



# Regulatory Impact Anal ysis (RIA) for Proposed Reconsideration Existi ng Stationary Spark Ignition RICE NESHAP

Draft Report

Prepared for Larry Sorrels U.S. Environmental Protection Agency Office of Air Quality Plann ing and Standards (OAQPS) Air Economics Group (AEG) (MD-C439-02) Research Triangle Park, NC 27711_________________________________ RTI International is a trade name of Research Triangle Institute. 

# Regulatory Impact Analysis (RIA) for Existing Stationary Spark Ignition RICE NESHAP

Draft Report

April 2012 Prepared for Larry Sorrels U.S. Environmental Protection Agency Office of Air Quality Plann ing and Standards (OAQPS) Air Benefit and Cost Group (ABCG) (MD-C439-02) Research Triangle Park, NC 27711

Prepared by

Paramita Sinha Fern Braun Brooks Depro RTI International 3040 Cornwallis Road Research Triangle Park, NC 27709iii CONTENTS

Section Page

1 Executive Summary ...................................................................................................... 1-1

2 Introduction .................................................................................................................. . 2-1 2.1 Organization of this Report .................................................................................. 2-1

3 Industry Profile ............................................................................................................. 3-1 3.1 Electric Power Generation, Transmission, and Distribution ............................... 3-1 3.1.1 Overview .................................................................................................. 3-1 3.1.2 Goods and Services Used ......................................................................... 3-3 3.1.3 Business Statistics .................................................................................... 3-4 3.2 Oil and Gas Extraction ....................................................................................... 3-11 3.2.1 Overview ................................................................................................ 3-11 3.2.2 Goods and Services Used ....................................................................... 3-11 3.2.3 Business Statistics .................................................................................. 3-13 3.2.4 Case Study: Marginal Wells .................................................................. 3-17 3.3 Pipeline Transportation of Natural Gas ............................................................. 3-18 3.3.1 Overview ................................................................................................ 3-18 3.3.2 Goods and Services Used ....................................................................... 3-18 3.3.3 Business Statistics .................................................................................. 3-20

4 Regulatory Alternatives, Costs, and Emission Impacts ................................................ 4-1 4.1 Background .......................................................................................................... 4-1 4.2 Proposed Amendments to SI RICE NESHAP ..................................................... 4-1 4.2.1 Total Hydrocarbon Compliance (THC) Demonstration Option .............. 4-1 4.2.2 Proposed Amendment - Emergency Demand Response/Peak Shaving .................................................................................................... 4-5 4.2.3 Proposed Amendment - Non-Emergency Stationary SI RICE Greater than 500 HP Located at Area Sources...... ................................ 4-6iv 4.3 What Are the Pollutants Regulated by the Rule? ............................................... 4-11

4.4 Cost Impacts....................................................................................................... 4-14 4.4.1 Introduction ............................................................................................ 4-14 4.4.2 Control Cost Methodology .................................................................... 4-14 4.4.3 Control Cost Equations .......................................................................... 4-18 4.4.4 Summary ................................................................................................ 4-21 4.4.5 Caveats and Limitations for Cost Estimates .......................................... 4-35

4.5 Baseline Emissions and Emission Reductions ................................................... 4-36

5 Economic Impact Analysis, Energy Impact s, and Social Costs ................................... 5-1 5.1 Compliance Costs of the Proposed Reconsidered Rule ....................................... 5-1 5.2 Social Cost Estimate ............................................................................................ 5-3 5.3 How Might People and Firms Respond? A Partial Equilibrium Analysis .......... 5-4 5.2.1 Changes in Market Prices a nd Quantities ...............

................................ . 5-4 5.2.2 Regulated Markets: The Electric Power Generation, Transmission, and Distribution Sector ............................................................................ 5-6 5.2.3 Partial Equilibrium Measures of Social Cost: Changes Consumer and Producer Surplus ............................................................................... 5-7 5.4 Energy Impacts .................................................................................................... 5-9 5.5 Unfunded Mandates ........................................................................................... 5-10 5.5.1 Future and Disproportionate Costs ........................................................ 5-10 5.5.2 Effects on the National Economy .......................................................... 5-10 5.6 Environmental Justice ........................................................................................ 5-11 5.7 Employment Impact Analysis ............................................................................ 5-11 5.7.1 Employment Impacts from Pollution Control Requirements ................ 5-13 5.7.2 Employment Impacts within the Regulated Industry............................. 5-17

6 Small Entity Screening Analysis .................................................................................. 6-1 Deleted: 4-11

Deleted: 4-11 Deleted: 4-12 Deleted: 4-15 Deleted: 4-18v 6.1 Small Entity Data Set ........................................................................................... 6-1 6.2 Small Entity Economic Impact Measures ............................................................ 6-2 6.2.1 Model Establishment Receipts and Annual Compliance Costs ............... 6-2 6.3 Small Government Entities

......................... ................................ ....................... 6-11

7 Benefits of Emissions Reductions ................................................................................ 7-1 7.1 Calculation of PM 2.5 Human Health Co-Benefits ................................................ 7-1 7.2 Unquantified Benefits ........................................................................................ 7-13 7.2.1 HAP Benefits ......................................................................................... 7-13 7.2.2 Additional NO 2 Co-Benefits .................................................................. 7-14 7.2.3 Ozone Co- Benefits ................................................................................ 7-16 7.2.4 Carbon Monoxide Co-Benefits .............................................................. 7-16 7.2.5 Visibility Impairment Co-Benefits..................................7-23

7.3 Characterization of Uncertainty in the Monetized PM 2.5 Co-Benefits ............... 7-25 7.4 Comparison of Co-Benefits and Costs ............................................................... 7-30

8 References for RIA ....................................................................................................... 8-1vi LIST OF FIGURES

Number Page 3-1 Industrial Production Index (NAICS 2211) ................................................................ 3-3 3-2 Internal Combustion Generators by State: 2006 ......................................................... 3-4 3-3 2002 Regional Distribution of Establishments: Electric Power Generation, Transmission, and Distribution Industry (NAICS 2211) ............................................ 3-6 3-4 Industrial Production Index (NAICS 211) ................................................................ 3-12 3-5 2002 Regional Distribution of Establishments: Crude Petroleum and Natural Gas Extraction Industry (NAICS 211111) ................................................................ 3-15 3-6 2002 Regional Distribution of Establishments: Natural Gas Liquid Extraction Industry (NAICS 211112) ......................................................................................... 3-16 3-7 Distribution of Establishments within Pi peline Transportation (NAICS 486) .......... 3-19 3-8 Distribution of Revenue within Pipeline Transportation (NAICS 486) .................... 3-20 3-9 2002 Regional Distribution of Establishments: Pipeline Transportation (NAICS 486) .......................................................................................................................... .. 3-22 3-10 Share of Establishments by Legal Form of Organization in the Pipeline Transportation of Natural Gas Industry (NAICS 48621): 2002 ................................ 3-22

5-1 Distribution of Engine Population by Horsepower Group .......................................... 5-4 5-2 Market Demand and Supply Model: With and Without Regulation ........................... 5-6 5-3 Electricity Restructuring by State ................................................................................ 5-9

6-1 Distribution of Engine Population by Size for All Industries ..................................... 6-8 6-2 Distribution of Compliance Costs by En gine Size for All Industries ......................... 6-9

7-1. Breakdown of Monetized PM 2.5 Health Co-Benefits using Mortality Function from Pope et al. (2002) ................................................................................................ 7-7 7-2. Total Monetized PM 2.5 Co-Benefits for the Proposed SI RICE Reconsidered NESHAP in 2013 ...................................................................................................... 7-12 7-3. Breakdown of Monetized Co-Benefits for the Proposed SI RICE Reconsidered NESHAP by Engine Sizee ........................................................................................ 7-13 7-4. Estimated Chronic Census Tractl Carcinogenic Risk from HAP exposure from outdoor sources (2005 NATA) .................................................................................. 7-18 7-5. Estimated Chronic Census Tract Non cancer (Respiratory) Risk from HAP exposure from outdoor sources (2005 NATA) .......................................................... 7-18 7-6. Percentage of Adult Population by Annual Mean PM 2.5 Exposure in the Baseline .................................................................................................................... 7-28vii 7-7. Cumulative Distribution of Adult Population at Annual Mean PM 2.5 Exposure in the Baseline .......................................................................................................... 7-2 8 7-8. Net Benefits for the Proposed SI RICE Reconsidered NESHAP at 3% Discount Rate ............................................................................................................ 7-33 7-9. Net Benefits for the Proposed SI RICE Reconsidered NESHAP at 7% Discount Rate .......................................................................................................................... .. 7-34viii LIST OF TABLES

Number Page 1-1 Summary of the Monetized Co-Benefits, Social Costs, and Net benefits for the Proposed SI RICE Reconsidered NESHAP in 2013 (millions of 2010$) ................... 1-2

3-1 Key Statistics: Electric Power Generatio n, Transmission, and Distribution (NAICS 2211) (2007) .................................................................................................. 3-2 3-2 Direct Requirements for Electric Power Generation, Transmission, and Distribution (NAICS 2211): 2002 ............................................................................... 3-5 3-3 Firm Concentration for Electric Power Generation, Transmission, and Distribution (NAICS 2211): 2002 ............................................................................... 3-7 3-4 United States Retail Electricity Sales Statistics: 2008 ................................................ 3-8 3-5 FY 2010 Financial Data for 70 U.S. Share holder-Owned Electric Utilities ............... 3-9 3-6 Aggregate Tax Data for Accounting Period 7/07–6/08: NAICS 2211 ....................... 3-9 3-7 Key Enterprise Statistics by Receipt Size for Electric Power Generation, Transmission, and Distribution (NAICS 2211): 2007 ............................................... 3-10 3-8 Key Statistics: Crude Petroleum and Natural Gas Extraction (NAICS 211111): (2007) ........................................................................................................................ 3-12 3-9 Key Statistics: Natural Gas Liquid Extraction (NAICS 211112) (2007) .................. 3-13 3-10 Direct Requirements for Oil and Gas Extraction (NAICS 211): 2002 ...................... 3-13 3-11 Key Enterprise Statistics by Employment Size for Crude Petroleum and Natural Gas Extraction (NAICS 211111): 2007 ....................................................... 3-17 3-12 Key Enterprise Statistics by Employment Size for Crude Natural Gas Liquid Extraction (NAICS 211112): 2007 ............................................................................ 3-17 3-13 Aggregate Tax Data for Accounting Period 7/07

– 6/08: NAICS 211 ....................... 3-18 3-14 Key Statistics: Pipeline Transportation of Natural Gas (NAICS 48621) (2007) ...... 3-19 3-15 Direct Requirements for Pipeline Transportation (NAICS 486): 2002 ..................... 3-21 3-16 Firm Concentration for Pipeline Tran sportation of Natural Gas (NAICS 48621): 2002 .............................................................................................................. 3-2 3 3-17 Aggregate Tax Data for Accounting Period 7/07–6/08: NAICS 486 ....................... 3-23 3-18 Key Enterprise Statistics by Receipt Size for Pipeline Transportation of Natural Gas (NAICS 48621): 2007 ........................................................................................ 3-24

4-1 Summary of Annual and Capital Costs Equations for Existing Stationary SI Engines ...................................................................................................................... 4-21 4-2 Summary of Major Source and Area Source Costs for the SI RICE NESHAP ........ 4-22 4-3 Summary of Major Source and Area Source NAICS Costs for the SI RICE NESHAP ................................................................................................................... 4-23 Deleted: 4-18 Deleted: 4-20

Deleted: 4-21ix 4-4 Summary of Major Source and Area Source NAICS Costs for the SI RICE NESHAP, by Size ...................................................................................................... 4-24 4-5 Summary of Major Source and Area Source NAICS Costs for the SI RICE NESHAP, by Number of Engines ............................................................................. 4-28 4-6 Summary of Major Source and Area Source Baseline for the SI RICE NESHAP ................................................................................................................... 4-33 4-7 Emissions Factors ...................................................................................................... 4-33 4-8 Summary of Major Source and Area Source Baseline Emissions for the SI RICE NESHAP by 2013 ........................................................................................... 4-34 4-9 Summary of Major Source and Area Source Emissions Reductions for the SI RICE NESHAP by 2013 ........................................................................................... 4-34

5-1 Selected Industry-Level Annualized Compliance Costs as a Fraction of Total Industry Revenue: 2009 ............................................................................................... 5-3 5-2 Hypothetical Price Increases for a 1% Increase in Unit Costs .................................... 5-5 5-3 Hypothetical Consumption Decreases for a 1% Increase in Unit Costs ..................... 5-7 5-4 U.S. Electric Power a Sector Energy Consumption (Q uadrillion BTUs): 2013 ........... 5-9 5-5 Labor-based Employment Estimates for Reporting and Recordkeeping and Installing, Operating, and Maintaining Control Equipment Requirements for Proposed Reconsideration SI RICE NESHAP........................................................5-16

6-1 Proposed NESHAP for Existing Stationa ry Reciprocating Internal Combustion Engines (RICE): Affected Sectors and SBA Small Business Size Standards ............. 6-3 6-2 Average Receipts for Affected Industry by Enterprise: 2007 ($2009 Million/Establishment) ...............

................................ ........................ ......................... 6-4 6-3 Average Receipts for Affected Industry by Enterprise Receipt Range: 2007 ($2009/Establishment) ................................................................................................. 6-5 6-4 Representative Establishment Costs Used for Small Entity Analysis ($2009) ........... 6-7

7-1 Human Health Effects of PM 2.5 ................................................................................... 7-2 7-2. General Summary of Monetized PM 2.5 –Related Health Co-Benefits Estimates for the Proposed SI RICE Reconsidered NESHAP in 20 13 (millions of 2010$) ...... 7-9 7-3. Summary of Reductions in Health Incidences from PM 2.5 Co-Benefits for the Proposed SI RICE Reconsidered NESHAP in 2013 ................................................ 7-10 7-4. All Monetized PM 2.5 Co-Benefits from PM 2.5 Benefits for the Proposed SI RICE Reconsidered NESHAP in 2013 ..................................................................... 7-11 7-5. Summary of the Annualized Monetized Benefits, Social Costs, and Net Benefits for the Proposed SI RICE Reconsidered NESHAP in 2013 (millions of 2010$) ................................................................................................................... 7 -31 Deleted: 4-22

Deleted: 4-26

Deleted: 4-31 Deleted: 4-31

Deleted: 4-32

Deleted: 4-321-1 Section 1 EXECUTIVE SUMMARY This proposed action is a reconsideration of the promulgated NESHAP for existing stationary SI RICE with a site rating of less th an or equal to 500 HP located at major sources, and existing stationary SI RICE of any site rating located at area sources. EPA estimates that complying with the proposed reconsidered national emission standards for hazardous air pollutants (NESHAP) fo r stationary spark-ignition (SI) reciprocating internal combustion engines (RICE) will have an annualized cost of approximately $115 million per year (2009 or 2010 dollars) in the year of full implementation of the rule (2013). The total annualized costs of the proposed reconsidered rule are 55% less than those for the final SI RICE NESHAP promulgated in 2010. Using these costs, EPA estimates in its economic impact analysis that the NESHAP will have limited impacts on the industries affected and their consumers. Using sales data obtained for affected small entities in an analysis of the impacts of this rule on small entities, EPA expects that the NESHAP will not result in a SISNOSE (significant economic impacts for a substantial numbe r of small entities), a result consistent with the conclusion for the final SI RICE NESHAP issued in 2010. EPA also does not expect significant adverse energy impacts based on Executive Order 13211, an Executive Order that requires analysis of energy impacts for rules su ch as this one that are economically significant under Executive Order 12866. In the year of full implementation (2013), EP A estimates that the total monetized benefits of the proposed reconsidered NESHAP are $62 million to $150 million and $55 million to $140 million, at 3% and 7% discount rates, respectively (Table 1-1). All estimates are in 2010 dollars for the year 2013. These estimates reflect the co-benefits from 9,600 tons of NOx emission reductions associated with implementing the controls to reduce hazardous air pollutants (HAPs) required under this proposed reconsideration. Using alternate relationships between PM 2.5 and premature mortality supplied by experts, higher and lower benefits estimates are plausible, but most of the expert-based estimates fall between these estimates. The benefits from reducing other air pollutants have not been monetized in this analysis, including reducing 22,200 tons of carbon monoxide (CO) and 1,800 tons of hazardous ai r pollutants (HAPs) each year. In addition, ecosystem benefits and visibility benefits have not been monetized in this analysis. In the year of full implementation (2013), EP A estimates the net bene fits of the proposed NESHAP are $-53 million to $35 million and $-60 million to $25 million at 3% and 7% discount1-2 rates, respectively (Table 1-1). These estimates are “snapshots” of benefits and costs at year 2013 and are in 2010 dollars

.1-3 Table 1-1. Summary of the Annualized Monetized Co-Benefits, Social Costs, and Net benefits for the Proposed Reconsideration SI RICE NESHAP in 2013 (millions of 2010$) 1

3% Discount Rate 7% Discount Rate

Total Monetized Benefits 2 $62 to $150 $55 to $140 Total Compliance Costs 3 $115 $115 Net Benefits $-53 to $35 $-60 to $25

Non-monetized Benefits Health effects from HAP exposure Health effects from CO

, NO 2 , and ozone exposure Ecosystem effects Visibility impairment

1 All estimates are for the implementation year (2013), and are rounded to two significant figures. 2 The total monetized co-benefits reflect the human health co-benefits associated wi th reducing exposure to PM 2.5

through reductions of PM 2.5 precursors such as NOx and VOC. It is important to note that the monetized cobenefits include many but not all health effects associated with PM 2.5 exposure. It is important to note that the monetized benefits include many but not all health effects associated with PM 2.5 exposure. Benefits are shown as a range from Pope et al. (2002) to Laden et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because there is no clear scientific evidence that would support the development of differential effects estimates by particle type. Because these estimates were generated using benefit-per-ton estimates, we do not break down the to tal monetized benefits into specific components here. See Figure 7-1 for an illustration of the breakdown, or the RIA for the final Cross-States Air Pollution Rule (EPA, 2011) for more information.

3 The annual compliance costs serve as a proxy for the annual social costs of this rule given the lack of difference

between the two. The annual compliance costs are calculated using a 7 percent discount rate.2-1 Section 2 INTRODUCTION EPA is proposing NESHAP for existing stationary SI RICE that either are located at area sources of hazardous air pollutant emissions or that have a site rating of less than or equal to 500 horsepower and are located at major sources of hazardous air pollutant emissions. The proposed amendments to the SI RICE NESHAP are provided in detail in Section 4 of this RIA. The rule is economically significant according to Executive Order 12866. As part of the regulatory process of preparing these standards, EPA has prepared a regulatory impact analysis (RIA). This analysis includes an analysis of impacts to small entities as part of compliance with the Small Business Regulatory Enforcement Fairness Act (SBREFA) and an analysis of impacts on energy consumption and production to comply with Executive Order 13211 (Statement of Energy Effects). An analysis of economic imp acts, along with an analysis of impacts on employment, is also included in this RIA. Finall y, an analysis of the benefits of the rule is included in this RIA. It should be noted that the data that supports the analyses listed above have been updated where possible and appropriate from the data used in the RIA for the SI RICE NESHAP promulgated in 2010.

2.1 Organization of this Report The remainder of this report supports and details the methodology and the results of the RIA:

 Section 3 presents a profile of the affected industries.

 Section 4 presents a summary of regulatory alternatives co nsidered in the final rule, and provides the compliance costs of the rule.

 Section 5 describes the estimated costs of the regulation and describes the economic impact analysis (EIA) methodology and reports market, welfare, energy, and employment impacts.

 Section 6 presents estimated impacts on small entities.

 Section 7 presents the benefits and ne t benefits (benefits- costs) estimates.3-1 Section 3 INDUSTRY PROFILE This section provides an introduction to the indu stries affected by the rule, i.e., industries in which the spark-ignition (SI) RICE being regulated are found. SI RICE generate electric power, pump gas or other fluids, or compress air for machinery. The primary non-utility application of internal combustion (IC) engines is in the natural gas industry to power compressors used for pipeline transportation, field gathering (collecting gas from wells), underground storage tanks, and in-gas processing plants. RICEs are separated into three design classes: 2 cycle (stroke) lean burn, 4-stroke lean bur n, and 4-stroke rich burn. Each of these have design differences that affect both baseline em issions as well as the potential for emissions control. These industries include the following:

 electric power generation, transmissi on, and distribution (NAICS 2211),

 oil and gas extraction (including marginal wells) (NAICS 211), and

 pipeline transportation of natural gas (NAICS 48621).

While this is not an exhaustive list of th e industries affected by this proposed reconsideration rule, these three industries incur about 83 percent of the annualized costs of the rule. A full listing of all industries affected in this rulemaking can be found in Chapter 4. The purpose of this profile chapter is to give the reader a general understanding of the economic aspects of the industry; their relative size, relati onships with other sectors in the economy, trends for the industries, and financial statistics. 3.1 Electric Power Generation, Tr ansmission, and Distribution 3.1.1 Overview Electric power generation, transmission, a nd distribution (NAICS 2211) is an industry group within the utilities sector (NAICS 22). It includes establishments that produce electrical energy or facilitate its transmi ssion to the final consumer. From 2002 to 2007, revenues from electric power generation grew about 18% to over $440 billion ($2007) (Table 3-1). 1 At the same time, payroll rose about 7% and the number of

1 We provide revenues from electric power generation for the years 2002 and 2007 for these are years of the Economic Census. We reference data from these Economic Censuses frequently in this industry profile and show revenues from this industry over this time frame due to availability of such data.3-2 employees decreased by around 4%. The number of establishments rose by about 3%. Industrial production within NAICS 2211 has increased 26% since 1997 (Figure 3-1). Electric utility companies have traditionally been tightly regulated monopolies. Since 1978, several laws and orders have been passed to encourage competition within the electricity market. In the late 1990s, many states began the process of restructuring their utility regulatory framework to support a competitive market. Foll owing market manipulati on in the early 2000s, however, several states have suspended their restructuring efforts. The majority (58%) of power generators controlled by combined heat and power (CHP) or independent power producers are located in states undergoing active restructuring (Figure 3-2). Table 3-1. Key Statistics: Electric Power Generation, Transmission, and Distribution (NAICS 2211) ($2007)

2002 2007 Revenue ($10 6 ) 373,309 440,355 Payroll ($10 6 ) 40,842 43,792 Employees 535,675 515,335 Establishments 9,394 9,642 Source: U.S. Census Bureau; American FactFinder; “Sector 22: EC0722I2: Utilities: Industry Series: Preliminary Comparative Statistics for the United St ates (2002 NAICS Basis): 2007 and 2002.” http://factfinder.census.gov3-3 Figure 3-1. Industrial Production Index (NAICS 2211) Source: The Federal Reserve Board. “Industrial Production and Capacity Utilization: I ndustrial Production” Series

ID: G17/IP_MINING_AND_UTILITY_DETAIL/IP.G2211.S <http://www.federalreserve.gov/datadownload/>. (January 27, 2010). 3.1.2 Goods and Services Used In Table 3-2, we use the latest detailed benchmark input-output data report by the Bureau of Economic Analysis (BEA) (2002) to identify the goods and services used in electric power generation. As shown, labor and tax requirements represent a significant share of the value of power generation. Extraction, transportation, refining, and equipment requirements potentially 80 85 90 95 100 105 110 1151997‐011997‐061997‐111998‐041998‐091999‐021999‐071999‐122000‐052000‐102001‐032001‐082002‐012002‐062002‐112003‐042003‐092004‐022004‐072004‐122005‐052005‐102006‐032006‐082007‐012007‐062007‐112008‐042008‐092009‐022009‐072009‐12IndexValue(Jan2002=100)3-4 Figure 3-2. Internal Combustion Generators by State: 2006 Source: U.S. Department of Energy, Energy Informati on Administration. 2007. “2006 EIA-906/920 Monthly Time

Series.” associated with reciprocating internal combustion engines (oil and gas extraction, pipeline transportation, petroleum refineries, and turbine manufacturing) represent around 10% of the value of services. 3.1.3 Business Statistics The U.S. Economic Census and Statistics of U.S. Businesses (SUSB) programs provide national information on the distribution of economic variables by industry, location, and size of business. Throughout this section and repo rt, we use the following definitions:

 Establishmen t: An establishment is a single physical location where business is conducted or where services or industrial operations are performed. Diesel and Natural Gas Internal Combustion Generators By State No Restructuring Suspended Restructuring Active Restructuring 100 50

10 13-5 Table 3-2. Direct Requirements for Electri c Power Generation, Transmission, and Distribution (NAICS 2211): 2002

Commodity Commodity Description Direct Requirements Coefficients a V00100 Compensation of employees 20.52% V00200 Taxes on production and imports, less subsidies 13.71% 211000 Oil and gas extraction 6.16% 212100 Coal mining 5.86% 482000 Rail transportation 3.01% 230301 Nonresidential maintenance and repair 2.83% 486000 Pipeline transportation 1.70% 722000 Food services a nd drinking places 1.40% 52A000 Monetary authorities and depository credit intermediation 1.39% 541100 Legal services 1.13%

a These values show the amount of the commodity required to produce $1.00 of the industry’s output. The values

are expressed in percentage terms (coefficient ×100). Source: U.S. Bureau of Economic Analysis. 2002. 2002 Benchmark Input-Output Account s: Detailed Make Table, Use Table and Direct Requirements Table. Tables 4 and 5.

 Receipts : Receipts (net of taxes) are defined as the revenue for goods produced, distributed, or services provided, including revenue earned from premiums, commissions and fees, rents, interest, divi dends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes.

 Firm : A firm is a business organization consisting of one or more domestic establishments in the same state and industry that were specified under commonownership or control. The firm and the establishment are the same for singleestablishment firms. For each multiestablishment firm, establishments in the same industry within a state are counted as one firm; the firm employment and annual payroll are summed from the associated establishments.

 Enterprise : An enterprise is a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multiestablishment company forms one enterprise; the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments.3-6 In 2002, Texas had almost 1,000 power establishments, while California, Georgia, and Ohio all had between 400 and 500 (Figure 3-3). Hawaii, Nebraska, and Rhode Island all had fewer than 20 establishments in their states.

Figure 3-3. 2002 Regional Distribution of Establishments: Electric Power Generation, Transmission, and Distribution Industry (NAICS 2211) Source: U.S. Census Bureau; generate d by RTI International; using American FactFinder; “Sector 22: Utilities:

Geographic Area Series: Summary Statistics: 2002.” <http://factfinder.census.gov>; (November 10, 2008).. As shown in Table 3-3, the four largest firms owned over 1,200 establishments and accounted for about 16% of total industry receipts/revenue. The 50 largest firms accounted for almost 6,000 establishments and about 78% of total receipts/revenue. Investor-owned energy providers accounted for only 2% of retail electricity sold in the United States in 2008 (Table 3-4). In 2008, inve stor-owned energy provider companies with less than 50% of their assets regulated were unprofitable overall, while other companies in this category were profitable. (Table 3-5). In 2008, enterprises within NAICS 2211 had a pre-tax profit margin of 8.1% (Table 3-6). In 2002, about 82% of firms generating, tran smitting, or distributing electric power had receipts of under $50 million (Table 3-7). However, these firms accounted for only 11% of employment, with 89% of employees working for firms with revenues in excess of $100 million. Establishments by State

Less than 100 100 - 199 200 - 349 350 - 500 More than 5003-7 Table 3-3. Firm Concentration for Electric Power Generation, Transmission, and Distribution (NAICS 2211): 2002

Commodity Establishments Receipts/Revenue Number of Employees Employees per Establishment Amount ($10 6 ) Percentage of Total All firms 9,394 $325,028 100.0% 535,675 57 4 largest firms 1,260 $52,349 16.1% 68,432 54 8 largest firms 2,566 $95,223 29.3% 151,575 59 20 largest firms 3,942 $173,207 53.3% 271,393 69 50 largest firms 5,887 $253,015 77.8% 408,021 69 Source: U.S. Census Bureau; generate d by RTI International; using American FactFinder; “Sector 22: Utilities:

Subject Series—Estab & Firm Size: Concentration by Largest Firms for the United States: 2002.” <http://factfinder.census.gov>; (November 21, 2008).

### 3-8Table 3-4. United States Retail Electricity Sales Statistics: 2008Full-Service ProvidersOther ProvidersItem Investor-OwnedPublicFederalCooperativeFacilityEnergyDeliveryTotalNumber of entities362 1 25 1 NA NA92Number of retail customers46,985 2,160,220 36 940,697 1 NA NA 3,147,939Retail sales (103megawatthours) 2,25770,303 9,625 21,868 117 NA NA 104,170Percentage of retail sales267 9 21 0 — —100Revenue from retail sales ($106) 1135,934 473 1,994 6 NA NA 8,520Percentage of revenue1.3369.65 5.55 23.41 0.07 — —100Average retail price (cents/kWh) 5.018.44 4.91 9.12 5.25 NA NA8.18Source: U.S. Department of Energy, Energy Information Administration. 2009. “State Electricity Profiles 2008.” DOE/EIA-0348(01)/2. p. 260. <http://www.eia.doe.gov/cneaf/electricity/st_profiles/sep2008.pdf>.3-9 Table 3-5. FY 2010 Financial Data for 70 U.S. Shareholder-Owned Electric Utilities

Profit Margin Net Income Operating Revenues Investor-Owned Utilities 4. 81% $27,728 $371,545

Regulated a 7.25% $12,341 $158,657 Mostly regulated b 8.50% $17,815 $175,218 Diversified c -16.78% -$2,429 $37,671

a 80%+ of total assets are regulated. b 50% to 80% of total assets are regulated.

c Less than 50% of total assets are regulated. Source: Edison Electric Institute. “Income Statement: Q4 2010 Financial Update. Quarterly Report of the U.S.

Shareholder-Owned Electric Utility Industry.” <http://www.eei.org>. Table 3-6. Aggregate Tax Data for Accounting Period 2009: NAICS 2211

Number of enterprises a 1,187 Total receipts (10 3 ) $323,522,443 Net sales(10 3 ) $328,017,143 Profit margin before tax 3.1% Profit margin after tax 2.0%

a Includes corporations with and without net income. Source: Internal Revenue Service, U.S. Department of Treasury. 2010. “Corporation Source Book: Data Files 2000–

2009.” <http://www.irs.gov/taxstats/article/0 ,,id=167415,00.html>; (May 2, 2010).

### 3-10Table 3-7. Key Enterprise Statistics by Employee Size for Electric Power Generation, Transmission, and Distribution(NAICS 2211): 2007Variable All Enterprises<20Employees20–99Employees100–499Employees500+EmployeesFirms 1,687 630 670 251 136Establishments 9,611687 1,110 999 6,815Employment 503,1343,622 31,455 42,527425,530Receipts ($103) $440,342,284 $8,364,773 $21,825,969 $41,370,375 $368,781,167Receipts/firm ($103) $261,021 $13,277 $32,576 $164,822 $2,711,626Receipts/establishment($103)$45,817 $12,176 $19,663 $41,412 $54,113Receipts/employment($) $875 $2,309 $694 $973 $867Source: U.S. Census Bureau. 2010. “Firm Size Data from the Statistics of U.S. Businesses: U.S. All Industries Tabulated by Receipt Size: 2007.”<http://www.census.gov/csd/susb/susb07.htm>.3-11 3.2 Oil and Gas Extraction 3.2.1 Overview Oil and gas extraction (NAICS 211) is an industry group within the mining sector (NAICS 21). It includes establishments that operate or develop oil and gas field properties through such activities as explor ing for oil and gas, drilling and equipping wells, operating onsite equipment, and conducting other activities up to the point of shipment from the property. Oil and gas extraction consists of two in dustries: crude petroleum and natural gas extraction (NAICS 211111) and natural gas liquid extraction (NAICS 211112). Crude petroleum and natural gas extraction is the larger industry; in 2002, it accounted for 93% of establishments and 75% of oil and gas extraction revenues. Industrial production in this industry is partic ularly sensitive to hurricanes in the Gulf Coast. In September of both 2005 and 2008, production dropped 14% from the previous month. (Figure 3-4). From 2002 to 2007, revenues from crude petroleum and natural gas extraction (NAICS 211111) grew over 117% to almost $215 billion ($2007) (Table 3-8). At the same time, payroll grew 55% and the number of employees grew by 48%. The number of establishments dropped by over 17%; as a result, the average establishment revenue increased by 162%. Materials costs were approximately 18% of revenue over the period. From 2002 to 2007, revenue from natural gas liquid extraction (NAICS 211112) grew over 26% to about $42 billion (Table 3-9). At the same time, payroll dropped 18% and the number of employees dropped by 24%. The number of establishments dropped by 43%, resulting in an increase of revenue per establishment of about 122%. 3.2.2 Goods and Services Used The oil and gas extraction industry has similar labor and tax requirements as the electric power generation sector. Extraction, support, power, and equipment requirements potentially associated with RICE (oil and gas extraction, support activities, electric power generation, machinery and equipment rental and leasing, and pipeline transportation) represent around 8% of the value of services (Table 3-10).3-12 Figure 3-4. Industrial Production Index (NAICS 211) Source: The Federal Reserve Board. “Industrial Production and Capacity Utilization: I ndustrial Production” Series

ID: G17/IP_MINING_AND_UTILITY_DETAIL/IP.G211.S <h ttp://www.federalreserve.gov/datadownload/>. (January 27, 2010). Table 3-8. Key Statistics: Crude Petroleum and Natural Gas Extraction (NAICS 211111): ($2007)

2002 2007 Revenue ($10 6 ) $98,667 $214,198 Payroll ($10 6 ) $5,785 $8,980 Employees 94,886 140,160 Establishments 7,178 5,956 Sources: U.S. Census Bureau; generated by RTI Interna tional; using American FactFinder; “Sector 21: Mining:

Industry Series: Historical Statistics for the Industry: 2002 and 1997.” <http://factfinder.census.gov>; (November 26, 2008). U.S. Census Bureau; generated by RTI International; us ing American FactFinder; “Sector 21: EC0721I1: Mining:

Industry Series: Detailed Statistics by Industry for the United States: 2007 ” <http://factfinder.census.gov>; (April 27, 2010). 75 80 85 90 95 100 105 1101997‐011997‐061997‐111998‐041998‐091999‐021999‐071999‐122000‐052000‐102001‐032001‐082002‐012002‐062002‐112003‐042003‐092004‐022004‐072004‐122005‐052005‐102006‐032006‐082007‐012007‐062007‐112008‐042008‐092009‐022009‐072009‐12IndexValue(Jan2002=100)3-13 Table 3-9. Key Statistics: Natural Gas Liquid Extraction (NAICS 211112) ($2007)

2002 2007 Revenue ($10 6 ) $33,579 $42,363 Payroll ($10 6 ) $607 $501 Employees 9,693 7,343 Establishments 511 291 Sources: U.S. Census Bureau; generated by RTI Interna tional; using American FactFinder; “Sector 21: Mining:

Industry Series: Historical Statistics for the Industry: 2002 and 1997.” <http://factfinder.census.gov>; (November 26, 2008). U.S. Census Bureau; generated by RTI International; us ing American FactFinder; “Sector 21: EC0721I1: Mining:

Industry Series: Detailed Statistics by Industry for th e United States: 2007 ” <http://factfinder.census.gov>; (April 27, 2010). Table 3-10. Direct Requirements for Oil and Gas Extraction (NAICS 211): 2002

Commodity Commodity Description Direct Requirements Coefficients a V00200 Taxes on production and imports, less subsidies 8.93% V00100 Compensation of employees 6.67% 230301 Nonresidential maintenance and repair 6.36% 211000 Oil and gas extraction 1.91% 213112 Support activities for oil and gas operations 1.51% 221100 Electric power generation, transmission, and distribution 1.47% 541300 Architectural, engineering, and related services 1.24% 532400 Commercial and industrial machinery and equipment rental and leasing 1.20% 33291A Valve and fittings other than plumbing 1.10% 541511 Custom computer programming services 0.99%

a These values show the amount of the commodity required to produce $1.00 of the industry’s output. The values

are expressed in percentage terms (coefficient ×100). Source: U.S. Bureau of Economic Analysis. 2002. 2002 Benchmark Input-Output Accoun ts: Detailed Make Table,

Use Table and Direct Requirements Table. Tables 4 and 5. 3.2.3 Business Statistics The U.S. Economic Census and SUSB programs provide national information on the distribution of economic variables by industry, location, and size of business. Throughout this section and report, we use the following definitions:

 Establishment : An establishment is a single physical location where business is conducted or where services or in dustrial operations are performed.3-14  Receipts : Receipts (net of taxes) are defined as the revenue for goods produced, distributed, or services provided, in cluding revenue earned from premiums, commissions and fees, rents, interest, divi dends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes.

 Firm : A firm is a business organization consisting of one or more domestic establishments in the same state and industry that were specified under commonownership or control. The firm and the establishment are the same for singleestablishment firms. For each multiestablishment firm, establishments in the same industry within a state are counted as one firm; the firm employment and annual payroll are summed from the associated establishments.

 Enterprise : An enterprise is a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multiestablishment company forms one enterprise; the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments. As of 2007, there were 6,563 firms within the NAICS 211111 code, of which 6427 (98 percent) were considered small businesses (Table 3-11). Within NAICS 211111, large firms compose about 2 percent of the firms, but account for 59 percent of employment and generate about 80 percent of estimated receipts listed under the NAICS. Within NAICS 211112, there are 139 firms, of which 95 (71 percent) were considered small businesses (Table 3-12). As shown in this table, large firms compose 29 percent of the firms, but account for 78 percent of employment and generate about 95 percent of estimated receipts. Enterprises within this industry generated $193 billion in total receipts in 2008. Including those enterprises without net income, the industry averaged an after-tax profit margin of 8.5% (Table 3-13).3-15 Figure 3-5. 2002 Regional Distribution of Establishments: Crude Petroleum and Natural Gas Extraction Industry (NAICS 211111) Source: U.S. Census Bureau; generated by RTI Internat ional; using American FactFi nder; “Sector 21: Mining:

Geographic Area Series: Industry Statistics for the State or Offshore Areas: 2007.” <http://factfinder.census.gov>; (January 27, 2010). Establishments by State

Less than 100 100 - 249 250 - 499 500 - 1,000 More than 1,0003-16 Figure 3-6. 2002 Regional Distribution of Establishments: Natural Gas Liquid Extraction Industry (NAICS 211112) Source: U.S. Census Bureau; generated by RTI Internat ional; using American FactFinder; “Sector 21: Mining:

Geographic Area Series: Industry Statistics for the State or Offshore Areas: 2007.” <http://factfinder.census.gov>; (January 27, 2010). Establishments by State

Less than 5 5 - 9 10 - 19 20 - 40 More than 403-17 Table 3-11. Key Statistics for Crude Petroleum and Natural Gas Extraction (NAICS 211111): 2007

NAICS NAICS Description SBA Size Standard Small Firms Large Firms Total Firms Number of Firms by Firm Size Crude Petroleum and Natural Gas Extraction 500 6,329 95 6,424 Total Employment by Firm Size 55,622 77,664 133,286 Estimated Receipts by Firm Size ($1000) 44,965,936 149,141,316 194,107,252 Note: *The counts of small and large firms in NAICS 486 210 is based upon firms with less than $7.5 million in receipts, rather than the $7 million required by the SBA Si ze Standard. We used this value because U.S. Census reports firm counts for firms with receipts less than $7. 5 million. **Employment and receipts could not be split between small and large businesses because of non-discl osure requirements faced by the U.S. Census Bureau. Source: U.S. Census Bureau. 2010. “Number of Firms, Nu mber of Establishments, Employment, Annual Payroll, and Estimated Receipts by Enterprise Receipt Size for the United States, All Industries: 2007.” <http://www.census.gov/econ/susb/>

Table 3-12. Key Statistics for Crude Natural Gas Liquid Extraction (NAICS 211112): 2007

NAICS Description SBA Size Standard Small Firms Large Firms Total Firms Number of Firms by Firm Size Natural Gas Liquid Extraction 500 98 41 139 Total Employment by Firm Size 1,875 6,648 8,523 Estimated Receipts by Firm Size ($1000) 2,164,328 37,813,413 39,977,741 Note: *The counts of small and large firms in NAICS 486210 is based upon firms with less than $7.5 million in receipts, rather than the $7 million required by the SBA Si ze Standard. We used this value because U.S. Census reports firm counts for firms with receipts less than $7. 5 million. **Employment and receipts could not be split between small and large businesses because of non-discl osure requirements faced by the U.S. Census Bureau. Source: U.S. Census Bureau. 2010. “Number of Firms, Nu mber of Establishments, Employment, Annual Payroll, and Estimated Receipts by Enterprise Receipt Size for the United States, All Industries: 2007.” <http://www.census.gov/econ/susb/>3-18 Table 3-13. Aggregate Tax Data for Accounting Period 7/07

– 6/08: NAICS 211

Number of enterprises a 19,441 Total receipts (10 3 ) $193,230,241 Net sales(10 3 ) $166,989,539 Profit margin before tax 12.9% Profit margin after tax 8.5%

a Includes corporations with and without net income. Source: Internal Revenue Service, U.S. Department of Treasury. 2010. “Corporation Source Book: Data Files 2004-

2007.” <http://www.irs.gov/taxstats/article /0,,id=167415,00.html>; (May 2, 2010). 3.3 Pipeline Transportation of Natural Gas 3.3.1 Overview Pipeline transportation of natural gas (NAICS 48621) is an industry group within the transportation and warehousing sector (NAICS 48-49), but more specifically in the pipeline transportation subsector (486). It includes the transmission of natural gas as well as the distribution of the gas through a local network to participating businesses. From 2002 to 2007, natural gas transportation revenues fell by 29% to just over $16 billion ($2007) (Table 3-14). At the same time, payroll decreased by 14% , while the number of paid employees decreased by nearly 25%. The number of establishments also fell by 8% from 1,701 establishments in 2002 to 1,560 in 2007. 3.3.2 Goods and Services Used The BEA reports pipeline transportation of natural gas only for total pipeline transportation (3-digit NAICS 486). In addition to pipeline transportation of natural gas (NAICS 4862), this industry includes pipeline transporta tion of crude oil (NAICS 4861) and other pipeline transportation (NAICS 4869). However, the BEA data are likely representative of the affected sector since pipeline transportation of natural gas accounts for 60% of NAICS 486 establishments and 66% of revenues (Figures 3-8 and 3-9).3-19 Table 3-14. Key Statistics: Pipeline Transportation of Natural Gas (NAICS 48621) ($2007)

Year 2002 2007 Revenue ($10 6 ) 16,368 20,797 Payroll ($10 6 ) 2,086 2,064 Employees 24,519 24,683 Establishments 1,560 1,479 Source: U.S. Census Bureau; generated by RTI Interna tional; using American FactFinder; “Sector 48: EC0748I1:

Transportation and Warehousing: Industry Series: Preliminary Summary Statistics for the United States: 2002 and 2007.” http://factfinder.census.gov (January 27, 2010).

Figure 3-8. Distribution of Establishments within Pipeline Transportation (NAICS 486) Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48:

Transportation and Warehousing: Industry Series: Summary Statistics for the United States: 2002 <http://factfinder.census.gov>; (January 27, 2010). In Table 3-15, we use the latest detailed benchmark input-output data report by the BEA (2002) to identify the goods and services used by pipeline transportation (NAICS 486). As shown, labor, refineries, and maintenance require ments represent significant share of the cost associated with pipeline transportation. Power a nd equipment requirements potentially associated with reciprocating internal combustion engine s (electric power generation and distribution) represent less than 2% of the value of services. 60%

25%

15%

0% 10% 20% 30% 40% 50% 60% 70%

4862 Pipeline Transportation of Natural Gas 4869 Other Pipeline Transportation 4861 Pipeline Transportation of Crude Oil3-20 Figure 3-9. Distribution of Revenue within Pipeline Transportation (NAICS 486) Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48:

Transportation and Warehousing: Industry Series: Summary Statistics for the United States: 2002” <http://factfinder.census.gov>; (January 27, 2010). 3.3.3 Business Statistics The pipeline transportation of natural gas is clearly concentrated in the two states closest to the refineries in the Gulf of Mexico. In 2 002, Texas and Louisiana contributed to 31% of all pipeline transportation establishments in the Un ited States (Figure 3-10) and 41% of all U.S. revenues. Other larger contributors with over 50 es tablishments in their states include Oklahoma, Pennsylvania, Kansas, Mississippi, and West Virginia. According to 2002 U.S. Census data, about 86% of transportation of natural gas establishments were owned by corporations and about 8% were owned by individual proprietorships. About 6% were owned by partnerships (Figure 3-11). As shown in Table 3-16, the four largest firms accounted for nearly half of the establishments, and just over half, 51%, of total revenue. The 50 largest firms accounted for over 1,354 establishments and about 99% of total revenue. The average number of employees per establishment was approximately 17 across all groups of firms. Enterprises within pipeline transportation (NAICS 486) generated $11.1 billion in totalreceipts in 2008. Including those enterprises without net income, the industry averaged an aftertax profit margin of 9.6% (Table 3-17). 66%

19% 15%

0% 10% 20% 30% 40% 50% 60% 70%

4862 Pipeline Transportation of Natural Gas 4869 Other Pipeline Transportation 4861 Pipeline Transportation of Crude Oil3-21 Table 3-15. Direct Requirements for Pipeline Transportation (NAICS 486): 2002

Commodity Commodity Description Direct Requirements Coefficients a V00100 Compensation of employees 14.78% 324110 Petroleum refineries 13.55% 230301 Nonresidential maintenance and repair 6.07% 211000 Oil and gas extraction 4.94% 333415 Air conditioning, refrigeration, and warm air heating equipment manufacturing 4.40%

561300 Employment services 4.26% 5416A0 Environmental and other technical consulting services 3.04% 541300 Architectural, engineering, and related services 3.04% 420000 Wholesale trade 2.79% 332310 Plate work and fabricated structural product manufacturing 2.72% 5419A0 All other miscellaneous professional, scientific, and technical services 2.48% 524100 Insurance carriers 2.38% 531000 Real estate 2.33% 52A000 Monetary authorities and depository credit intermediation 1.76% V00200 Taxes on production and imports, less subsidies 1.41% 541100 Legal services 1.19% 221100 Electric power generation, transmission, and distribution 1.13%

a These values show the amount of the commodity required to produce $1.00 of the industry’s output. The values

are expressed in percentage terms (coefficient ×100). Source: U.S. Bureau of Economic Analysis. 2002. 2002 Benchmark Input-Output Accoun ts: Detailed Make Table,

Use Table and Direct Requirements Table. Tables 4 and 5. The 2007 SUSB shows that 47% of all firms in this industry made under $5 million in revenue. Enterprises with revenue over $100 million provided an overwhelming share of employment in this industry (98%) (Table 3-18).3-22 Figure 3-10. 2002 Regional Distribution of Establishments: Pipeline Transportation (NAICS 486) Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48-49:

Geographic Distribution—Pipeline transportation of natura l gas: 2002. <http://factfinder.census.gov>; (November 10, 2008).

Figure 3-11. Share of Establishments by Legal Form of Organization in the Pipeline Transportation of Natural Gas Industry (NAICS 48621): 2002 Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48-49:

Transportation and Warehousing: Subject Series—Estab & Firm Size: Legal Form of Organization for the United States: 2002. <http://factfinder.census.gov>; (December 12, 2008). Establishments by State

Less than 15 15 - 39 40 - 79 80 - 149 More than 150

86%

8% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Corporations Individual Proprietorships Partnerships3-23 Table 3-16. Firm Concentration for Pipeline Transportation of Natural Gas (NAICS 48621): 2002

Commodity Establishments Receipts/Revenue Number of Employees Employees per Establishment Amount ($10 6 ) Percentage of Total All firms 1,431 $14,797 100% 23,677 16.5 4 largest firms 698 $7,551 51% 11,814 16.9 8 largest firms 912 $10,059 68% 15,296 16.8 20 largest firms 1,283 $13,730 93% 21,792 17.0 50 largest firms 1,354 $14,718 99% 23,346 17.2 Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48:

Transportation and Warehousing: Subject Series—Estab & Firm Size: Concentration by Largest Firms for the United States: 2002” <http://factfinder.census.gov>; (December 12, 2008). Table 3-17. Aggregate Tax Data for A ccounting Period 7/07–6/08: NAICS 486

Number of enterprises a 321

Total receipts (10 3 ) $11,062,608

Net sales (10 3 ) $10,210,083 Profit margin before tax 13.2% Profit margin after tax 9.6%

a Includes corporations with and without net income. Source: Internal Revenue Service, U.S. Department of Treasury. 2010. “Corporation Source Book: Data Files 2004-

2007.” <http://www.irs.gov/taxstats/article /0,,id=167415,00.html>; (May 2, 2010).

### 3-24Table 3-18. Key Enterprise Statistics by Employee Size for Pipeline Transportation ofNatural Gas (NAICS 48621): 2007Variable All Enterprises<20Employees20–99Employees100–499Employees 500+ EmployeesFirms 126 63 12 9 42Establishments 1.47966 26 701,317Employment 24,6832413821,47922,581Receipts ($103) $20,796,681 N/A $518,341 $1,448,020$18,498,143Receipts/firm ($103) $165,053 N/A $43,195 $160,891 $440,432Receipts/establishment($103)$14,061 N/A $19,936 $20,686 $14,046Receipts/employment($)$843 N/A $1,357 $979 $819Source: U.S. Census Bureau. 2011. Firm Size Data from the Statistics of U.S. Businesses, U.S. All Industries Tabulated by Employee Size: 2007.http://www2.census.gov/csd/susb/2007/usalli_r07.xls.4-1 Section 4 REGULATORY ALTERNATIVES, COSTS, AND EMISSION IMPACTS 4.1 Background This section of the RIA includes a discussion of the regulatory alternatives considered for the proposed reconsidered rule, the costs associ ated with these regulatory alternatives, and the impacts on affected emissions (both HAP and non- HAP). All impacts presented are for the year of full implementation, 2013. Costs in this section are in 2009$. Costs in 2010$ presented elsewhere in the RIA are escalated values based on the 2009$ costs presented in this section. Although the estimates presented are annualized, they should be understood as a “snapshot” in analyzing costs. This proposal was developed to address certain issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments and other communications. After promulgation of the 2010 RICE NESHAP amendments, the EPA received several petitions for reconsideration, legal challenges, and other communications raising issues of practical implem entability, and certain f actual information that had not been brought to the EPA’s attention during the rulemaking. The EPA has considered this information and believes that amen dments to the rule to address certain of these issues are appropriate. Therefore, the EPA is proposing amendments to the national emission standards for hazardous air pollutants for stationary reciprocat ing internal combustion engines under section 112 of the Clean Air Act. The proposed amendments include alternative testing options for certain large spark ignition (generally natural gas-fueled) stationary reciprocating internal combustion engines, management practices for a subset of existing spark ignition stationary reciprocating internal combustion engines in sparsely populated areas, and alternative and less burdensome monitoring and compliance options for the same engines in populated areas. The EPA is also proposing to include a limited temporary allowance for existing stationary emergency area source engines to be used for peak shaving and non-emergency demand response as part of the pre-existing allowance for such engines to be used for non-emergency use for 50 hours annually. In addition, the EPA is proposing, in both the NESHAP and in the new source performance standards for stationary internal combustion engines to increase the hours that stationary emergency engines may be used for emergency demand response. The proposed amendments also correct minor mistakes in the pre-existing regulations. The full preamble for the final SI RICE NESHAP and the rule itself can be reviewed at http://www.epa.gov/ttn/atw/rice/fr20au10.pdf

. Comment [A1]: Please be consistent with base year throughout document. Comment [A2]: Please be more explicit about the implications of this caveat.4-2 4.2 Proposed Amendments to SI RICE NESHAP

4.2.1. Total Hydrocarbon Compliance (THC) Demonstration Option 4.2.1.1. Background Currently, SI 4SRB non-emergency engines greater than 500 HP and located at major sources and existing SI 4SRB non-emergency engines greater than 500 HP located at area sources have the option of meeting either a formaldehyde percent reduction or a formaldehyde concentration standard. Formaldehyde was established in the original 2004 RICE NESHAP as an appropriate surrogate for HAP emissions from 4SRB engines based on industry test data available at that time. Based on testing condu cted at Colorado State University (CSU) of stationary lean burn engines, the EPA was able to establish CO as a surrogate for HAP for lean burn engines. Rich burn engines were not tested at CSU and the data the EPA had available at the time that were used to set the standards for rich burn engines did not support the same relationship between CO and HAP reductions for rich burn engines. Therefore, the EPA was unable to establish CO as a surrogate for HAP em issions for rich burn engines and the emission standard for rich burn engines was specified in terms of formaldehyde, the hazardous air pollutant emitted in the largest quantity from stationary engines. The EPA has previously acknowledged that it is significantly more expensive and difficult to test for formaldehyde versus CO, but has been unable in the past to support including the same flexibility for rich burn engines as is cu rrently in the rule for l ean burn engines with the option to meet the standards in terms of either formaldehyde or CO. For these reasons and expecting that new data for rich burn engines may become available in the future for the EPA to review and reassess possible surrogates for HAP, the EPA requested comment on this issue when proposing NESHAP for stationary existing engines less than or equal to 500 HP at major sources and all stationary existing engines at area s ources in 2009 (74 FR 9698). Specifically, the EPA solicited comment on whether it would be appropriate to include an alternative standard in terms of VOC and asked that commenters submit data supporting the relationship between HAP and VOC. Comments the EPA received back on the proposed rule asked that the formaldehyde standards for rich burn engines be replaced with emission standards for THC. The EPA determined at the time that it was not appropriat e to adopt an alternativ e standard in terms of THC (or VOC) for rich burn engines and discussed the reasons why in the 2010 responses to4-3 comments. Compliance with the formaldehyde standard in the rule is, therefore, currently demonstrated by initial and continuous performance testing for formaldehyde. On October 19, 2010, engine manufacturer Dresser-Waukesha submitted a petition for reconsideration of the formaldehyde requi rements. The EPA granted the petition for reconsideration on January 5, 2011. (In ad dition, on November 3, 2010, the Engine Manufacturers Association submitted a petition for judi cial review of these requirements.) In the petition for reconsideration, Dresser-Waukesha ar gued that formaldehyde is difficult and costly to measure. The petition requested that the HAP surrogate for 4SRB engines should be THC rather than formaldehyde. Dresser-Waukesha submitted data from testing it conducted illustrating that THC reduction across the catalyst is an appropriate surrogate for HAP reduction across the catalyst. According to the petitioner, testing for THC is easier and less costly and would substantially reduce the burden of the rule for owners and operators of these engines. Testing for formaldehyde emissions could cost more than double that of testing for THC emissions and on a nationwide basis the EPA esti mates that replacing formaldehyde testing with THC testing would result in substantial comp liance cost savings annually while achieving the same reduction in HAP emissions. The EPA has reviewed the data submitted by Dresser-Waukesha. The data provided indicate that a strong relationship exists between percentage reductions of THC and percentage reductions of formaldehyde (t he surrogate for HAP emissions in the NESHAP) on rich burn engines using non-selective catalytic reduction (NSCR). Data analyzed by the EPA indicate that if the NSCR is reducing THC by at least 30 per cent from 4SRB engines, formaldehyde emissions are guaranteed to be reduced by at least 76 percent, which is the percentage reduction required for the relevant engines. Indeed, the percentage reduction of formaldehyde is invariably well above the 76 percent level, and is usually above 90 percent. Therefore, the EPA agrees with the petitioner that for SI 4SRB engines using NSCR and meeting the NESHAP by showing a percentage reduction of HAP, it would be appropriate to allow sources to demonstrate compliance with the NESHAP by showing a THC re duction of at least 30 percent. Including an optional THC compliance demonstration option would reduce the burden of compliance significantly while continuing to achieve the same level of HAP emission reduction because the emission standards would remain the same. Cons equently, the EPA is proposing amendments to allow owners and operators of certain stationary 4SRB engines (i.e., the ones currently subject to a formaldehyde percent reduction requirement) to show compliance with an optional THC compliance demonstration option. The specific am endments the EPA is proposing are presented below.4-4 4.2.1.2. Proposed Amendments The EPA is proposing to add an alternative method of demonstrating compliance with the NESHAP for stationary 4SRB non-emergency engines greater than 500 HP that are located at major sources of HAP emissions and for existing stationary 4SRB non-emergency engines greater than 500 HP that are located at area so urces of HAP emissions that choose to meet the formaldehyde percent reduction requirement of 76 percent or more. Based on the arguments and evidence presente d in the petition discussed above, the EPA is proposing to add a compliance demonstration option for stationary 4SRB engines meeting a 76 percent or more formaldehyde reduction. The compliance demonstration option would be an alternative to the existing meth od of demonstrating compliance with the formaldehyde percent reduction standard, which is to test engines for formaldehyde. The alternative for owners and operators of 4SRB engines meeting a 76 percent or more formaldehyde reduction would be to test their engines for THC showing that the engine is achieving at least a 30 percent reduction of THC emissions. Under the proposed amendments, existing and new stationary 4SRB engines greater than 500 HP and located at major sources would stil l be required to reduce formaldehyde emissions by 76 percent or more or limit th e concentration of formaldehyde in the stationary RICE exhaust to 350 parts per billion by volume, dry basis or less at 15 percent oxygen (O 2 ). However, owners and operators choosing to meet the formaldehyde concentration limit would not have the THC demonstration compliance option, because EPA co uld not verify a clear relationship between concentrations of THC and concentrations of formaldehyde in exhaust from these SI 4SRB engines. The EPA is proposing that existing stationary 4SRB non-emergency engines greater than 500 HP located at area sources located in populated areas be subject to an equipment standard and required to install a catalyst. These engines would be subject to testing to demonstrate initially and on an ongoing basis that the catalyst is reducing CO by 75 percent or more, or alternatively that THC emissions are being reduced by 30 percent or more. Owners and operators of existing stationary 4SRB engines less than or equal to 500 HP who are required to limit the concentration of formaldehyde in the stationary RICE exhaust to 10.3 parts per million by volume, dry basis (ppmvd) or less at 15 percent O 2 do not have the option to demonstrate compliance using THC and must continue to demonstrate compliance by testing for formaldehyde following the methods and procedures specified in the rule.4-5 Owners and operators opting to use the THC compliance demonstration method must demonstrate compliance by showing that the aver age reduction of THC is equal to or greater than 30 percent. Owners and operators of 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions and demonstrating compliance by using the THC compliance demonstration option must conduct performance testing using Method 25A of 40 CFR part 60, appendix A – Determination of Total Gaseous Organic Concentration Using a Flame Ionization Analyzer. Measurements of THC at the inlet and the outlet of the NSCR must be on a dry basis and corrected to 15 percent O2 or equivalent carbon dioxide content. To correct to 15 percent O2, dry basis, owners and operators must measure oxygen using Method 3, 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522-00 (2005) and measure moisture using Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03. Because owners and operators are complying with a percent reduction requirement, the method used must be suitable for the entire range of emissions since pre and post-catalyst emissions must be measured. Method 25A is capable of measuring emissions down to 5 ppmv and is, therefore, an appropriate method for measuring THC emissions for compliance demonstration purposes. The EPA is allowing sources the option to meet a minimum THC percent reduction of 30 percent by using Method 25A of 40 CFR part 60, appendix A to demonstrate compliance with the formaldehyde percent reduction in 40 CFR part 63, subpart ZZZZ. 4.2.2. Proposed Amendment - Emergency Demand Response/Peak Shaving The EPA is proposing to revise the current provisions for stationary engines used for emergency demand response operation. The provisions the EPA is proposing to amend are in §§63.6640(f) and 63.6675 of 40 CFR part 63, subpart ZZZZ. Currently, §63.6640(f)(1)(iii) allows a maximum of 15 hours per year to be spent towards demand response operation under certain qualifying conditions. Also, §63.6640(f)(1 )(ii) currently includes an allowance of 100 hours per year for purposes of maintenance checks and readiness testing. The EPA is proposing that owners and operators of stationary emergenc y RICE be permitted to operate their engines as part of an emergency demand response program within the 100 hours per year that is permitted for maintenance and testing in §63.6640(f)(1)(ii). Owners and operators of stationary emergency engines can operate for emergency demand response during periods in which the regional transmission authority or equivalent balancing au thority and transmission operator has declared an EEA Level 2 as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency and during periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency.4-6 The hours spent for emergency demand response operation are added to the hours spent for maintenance and testing purposes and counted towards the 100 hours per year. If the total time spent for demand response operation and maintenance and testing exceeds 100 hours per year the engine will not be considered an emergency engine under this subpart and will need to meet all requirements for non-emergency engines. The EPA is recognizing that these engines may be called to operate not only by the regional transmission operator or equivalent to maintain the reliability of the bulk power system, but also by the local transmission and distribution system operators to support the local power systems. For stationary emergency engines above 500 HP that were installed prior to June 12, 2006, there is currently no emergency demand response allowance and there is no time limit on the use of emergency engines for routine testing and maintenance in §63.6640(f)(2)(ii). Those engines were not the focus of the 2010 RICE NESHAP amendments; therefore, the EPA did not make any changes to the requirements for those engines as part of the 2010 amendments. For consistency, the EPA is now also proposing that owners and operators of stationary emergency engines installed prior to June 12, 2006, be permitted to operate their engines as part of a demand response program as well for a total of 100 hours per year, including time spent for maintenance and testing. The EPA is also proposing to amend the NSPS for stationary CI and SI engines in 40 CFR part 60, subparts IIII and JJJJ, respectively, to provide the same allowance for stationary emergency engines for emergency demand response operation as for engines subject to the RICE NESHAP. The NSPS regulations currently do not include such an allowance for emergency demand response operation. For the reasons discussed as to why the EPA finds it appropriate to allow stationary emergency engines to participate in emergency demand response programs and remain being considered emergency units, and for consistency across engine regulations, the EPA is proposing to add an emergency demand response allowance under the NSPS regulations. Consequently, the EPA is proposing to revise the existing language in §§60.4211(f) and 60.4219 of 40 CFR part 60, subpart IIII, and §§60.4243(d) and 60.4248 of 40 CFR part 60, subpart JJJJ, to specify that emergency engines may participat e in demand response programs for up to 100 hours per year, including hours spent towards maintenance and testing of the emergency engines. In addition to the changes the EPA is pr oposing related to emergency demand response operation, the EPA is also including a further provision for owners and operators of existing stationary emergency RICE located at area sources for the reasons discussed. Paragraph §63.6640(f) currently allows owne rs and operators of emergency stationary RICE to operate their engine for 50 hours per year in non-emergency situations. As currently written, the 50 hours4-7 per year for non-emergency situations cannot be used for peak shaving or to generate income for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity; except that owners and operators of certain emergency engines may operate the engine for a maximum of 15 hours per year as part of an emergency demand response program. As discussed, the 15 hours per year allowance for emergency engines to participate in emergency demand response programs is being increased to 100 hours per year, but will also include hours spent towards mainta ining and conduc ting readiness testing of the emergency engines. However, additionally, the EPA is also proposing that stationary emergency engines located at area sources be permitted to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any non-emergency operation, including operation as part of a financial agreement with another entity. The peak shaving allowance would expire in 2017. The EPA is specifying that the power can only be used at the facility or towards the local system, and the engine can only be operated for peak shaving as part of a program with the local distribution system operator. The EPA is also clarifying that an engine that exceeds the calendar year limitations on non-emergency operation, including emergency demand response or peak shaving, will be considered a non- emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. To estimate emissions from emergency engines the EPA has previously estimated that these types of engines would on average operate for 50 hours per year. The average hours of operation for emergency engines is not expected to change based on the proposed amendments and 50 hours per year is still believed to be representative of emergency engine operation. Therefore, the emissions previously calculated remain appropriate. In terms of any revenue generated from participation in demand response and peak shaving programs, the EPA expects owners and operators will benefit financially, however, the EPA does not know to what extent. The EPA expects there will be savings and/or income generated through participation in emergency demand response programs and peak shaving operation, but the EPA has not accounted for any potential revenue in estimating the costs and benefits of the proposed amendments. It is uncertain how frequently stationary emergency engines would operate if they are called upon. Other factors, such as the annual revenue from demand response programs (which varies), are also uncertain making it problematic to estimate the economic benefit of such programs. As such, the EPA has not estimated any costs associated with the emergency engine amendments.4-8 4.2.3 Proposed Amendment - Non-Emergency Stationary SI RICE Greater than 500 HP Located at Area Sources 4.2.3.1. Background The EPA is also proposing to amend the requ irements that apply to existing stationary non-emergency 4 stroke SI RICE greater than 500 HP located at area sources of HAP emissions, which are generally natural gas fired engines. Currently, the RICE NESHAP requires owners and operators of such engines to 1) either meet a CO concentration limit of 47 parts ppmvd at 15 percent O2 or reduce emissions of CO by 93 percent or more, if the engines are 4SLB; and 2) to meet a formaldehyde concentration limit of 2.7 ppmvd at 15 percent O2 or reduce formaldehyde emissions by 76 percent or more, if the engines are 4SRB. In both cases, the EPA expects that the standards would be met using aftertreatment; oxidation catalysts for 4SLB engines and NSCR for 4SRB engines. In addition to these em ission requirements, owners and operators of existing stationary 4-stroke engines greater than 500 HP at area sources are also subject to monitoring, testing, recordkeeping and reporting requirements. After the final requirements for existing statio nary SI engines greater than 500 HP at area sources were published on August 20, 2010 ( 75 FR 51570), the EPA received petitions from Exterran (EPA-HQ-OAR-2008-0708-0581), the American Petroleum Institute (EPA-HQ-OAR2008-0708-0582), the Interstate Natural Gas Association of America (EPA-HQ-OAR-2008- 0708-0584), and the Gas Processors Association (EPA-HQ-OAR-2008-0708-0587) requesting that the EPA reconsider the requirements of the final rule. The petitioners expressed many similar concerns. As relevant to this rulemaking, petitioners stated that the EPA did not take into account the difference in population density and subsequently did not consider the difference in health impacts in remote versus more heavily populated locations. Inpeti tioner’s opinion, there should be less concern about engines that are located farther away from people; the petitioners believed that the EPA has substan tial latitude in requiring less st ringent standards for owners and operators of stationary engines in remote areas.

While the EPA does not share all of the view s of the petitioners regarding the difference between engines based on their location, the EPA does believe that it is reasonable to create a subcategory of existing stationary SI 4SLB a nd 4SRB engines above 500 HP located in areas remote from human activity. Engines located in remote areas that are not close to significant human activity may be difficult to access, may not have electricity or communications, and may be unmanned most of the time. The costs of the emission controls, testing, and continuous monitoring requirements may be unreasonable when compared to the HAP emission reductions Formatted: Highlight4-9 that would be achieved, considering that the engines are in sparsely populated areas. The EPA believes that establishing a subcategory for SI en gines at area sources of HAP located in sparsely populated areas accomplishes the agency’s goals and is adequate in protecting public health. The EPA is proposing to subcategorize sparsely populated engines using the existing DOT pipeline classification system. This system classifies locations based on their distance to pipelines covered by the Pipeline and Hazardous Materials Safety Administration safety regulations. The DOT system defines a class location unit as an onshore area that extends 220 yards or 200 meters on either side of the centerline of any continuous 1-mile (1.6 kilometers) length of pipeline. The DOT approach further classifies pipeline locations into Class 1 through Class 4 locations based on the number of buildings intended for human occupancy. A Class 1 location is defined as an offshore area or any class location unit that has 10 or fewer buildings intended for human occupancy. Stakeholders from the oil and gas industry have indicated to the EPA that the DOT system is well-established an d there would be substantial overlap between engines affected by the rule and covered by the DOT pipeline classification system. Incorporating this approach would also create harmonization between the EPA and DOT and would reduce the implementation and enforcement bu rden for states. Implementation for affected sources would also be less burdensome because the system is already in place and used by industry and covers the majority of these engines. Stakeholders have indicated they are required to review the class location status of pipeline segments annually. The EPA believes this approach is reasonable for defining the subcategory of remo te engines for those engines that are associated with DOT-regulated pipelines. For those engines not associated with pipelines, the EPA is using similar criteria. An engine would be considered to be in sparsely populated areas if within 0.25 mile radius of the engine there are 5 or fewer buildings intended for human occupancy. The EPA is proposing management practices as generally available control technologies for existing stationary SI 4SLB and 4SRB area source non-emergency engines located in sparsely populated areas. Given the remote location of the engines from human activity, the EPA believes that it is appropriate not to include re quirements that would necessitate aftertreatment and extensive testing and monitoring. The EPA has previously estimated that the costs of oxidation catalyst for existing 4SLB and 4SRB engines above 500 HP at area sources are $310 and $150 million, for capital and annual costs, respectively. The capital and annual costs of the RICE NESHAP for existing 4SLB and 4SRB engines above 500 HP at area sources would be $30 million and $12 million, respectively, if thes e proposed amendments are incorporated into the rule. Creating a subcategory of these engines for the ones located in sparsely populated areas4-10 and not mandating emission contro ls would significantly reduce the cost of the rule for such engines. For existing stationary SI 4SLB and 4SRB area source non-emergency engines that are located in populated areas, the EPA is proposing an equipment standard that requires the installation and operation of a catalyst that will have to be tested initially and annually to ensure that the catalyst is working properly and reducing emissions as required. In addition, these units will be required to have devices to shut down the engine if the catalyst is exposed to dangerous temperatures or have continuous monitoring equipment installed to record catalyst inlet temperatures. The EPA is proposing shorter test duration and less rigorous methods than currently required while still ensuring that HAP re ductions remain at expected levels for these engines located in populated areas. The specific amendments the EPA is proposing are discussed below. 4.2.3.2. What are the Proposed Amendments? Owners and operators of engines in sparsely populated areas would have to conduct a review of the surrounding area every 12 months to determine if the nearby population has changed. Stakeholders have indicated that they visit these facilities annually at a minimum. If the engine no longer meets the criteria for a sparsely populated area the owner and operator must within 1 year comply with the emission standa rds specified below for populated areas. Owners and operators of existing stationary 4SLB and 4S RB greater than 500 HP at area sources that are in sparsely populated areas as described above would be required to perform the following: •Change oil and filter every 1,440 hours of operation or annually, whichever comes first; •Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and •Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. Sources have the option to use an oil analysis program as described in §63.6625(i) of the rule in order to extend the specified oil change requirement. The oil analysis must be performed at the same frequency specified for changing the oil in Table 2d of the rule. The analysis program must at a minimum analyze the following three parameters: Total Acid Number, viscosity, and percent water content. The condemning limits for these parameters are as follows: Total Acid Number increases by more than 3.0 milligrams of potassium hydroxide per gram Comment [A3]: Wouldn’t the cost reduction for these engines be even higher since EPA just argued that the compliance costs for engines in rural areas are higher than average?4-11 from Total Acid Number of the oil when new; vi scosity of the oil has changed by more than 20 percent from the viscosity of the oil when new; or percent water content (by volume) is greater than 0.5. If all of these condemning limits are not exceeded, the engine owner or operator is not required to change the oil. If any of the limits are exceeded, the engine owner or operator must change the oil within 2 days of receiving the results of the analysis; if the engine is not in operation when the results of the analysis are received, the engine owner or operator must change the oil within 2 days or before commencing operation, whichever is later. The owner or operator must keep records of the parameters that are analyzed as part of the program, the results of the analysis, and the oil changes for the engine. The analysis program must be part of the maintenance plan for the engine. Owners and operators of existing stationary 4SLB and 4SRB area source engines above 500 HP in sparsely populated areas would also have to operate and maintain the stationary RICE and aftertreatment control device (if any) acco rding to the manufacturer's emission-related written instructions or develop their own mainte nance plan which must provide to the extent practicable for the maintenance and operation of the engine in a manner consistent with good air pollution control practice for minimizing emissions. For engines in populated areas, i.e., existing stationary 4SLB and 4SRB non-emergency engines greater than 500 HP at area sources th at are located on DOT Class 2 through Class 4 pipeline segments or, for engines not associated wi th pipelines, that do not meet the 0.25 mile radius with 5 or less buildings criteria, the EPA is proposing to adopt an equipment standard requiring the installation of a catalyst to reduce HAP emissions. Owners and operators of existing area source 4SLB non-emergency engines greater than 500 HP in populated areas would be required to install an oxidation catalyst. Ow ners and operators of existing area source 4SRB non-emergency engines greater than 500 HP in populated areas would be required to install NSCR. Owners and operators must conduct an initia l test to demonstrate that the engine achieves at least a 93 percent reduction in CO emissions or a CO concentration level of 47 ppmvd at 15 percent O2, if the engine is a 4SLB engine. Similarly, owners and operators must conduct an initial performance test to dem onstrate that the engine achieves at least a 75 percent CO reduction or a 30 percent THC reduction, if the engine is a 4SRB engine. The initial test must consist of three test runs. Each test run must be of at least 15 minute duration, except that each test run conducted using the proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the met hod and include at least 2 minutes of test data phase measurement. To measure CO, emission sources must use the CO methods already4-12 specified in subpart ZZZZ, or the proposed appendix A to 40 CFR part 63, subpart ZZZZ. The THC testing must be conducted using EPA Method 25A. The owner or operator of both engine types must also use a high temperature shutdown device that detects if the catalyst inlet temperatur e is too high, or, alternatively, the owner or operator can monitor the catalyst inlet temperatur e continuously and maintain the temperature within the range specified in the rule. For 4S LB engines the catalyst inlet temperature must remain at or above 450°F and at or below 1,350°F. For 4SRB engines the temperature range must be greater than or equal to 750°F and less than or equal to 1,250°F at the catalyst inlet. Owners and operators must in addition to the initial performance test conduct annual checks of the catalyst to ensure proper catalyst activity. The annual check of the catalyst must at a minimum consist of one 15-minute run using the methods discussed above, except that each test run conducted using the proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the met hod and include at least 2 minutes of test data phase measurement. Owners and operators of 4SLB engines must demonstrate during the catalyst activity test that the catalyst achieves at least a 93 percent reduction in CO emissions or that the engine exhaust CO emissions are no more than 47 ppmvd at 15 percent O2. Owners and operators of 4SRB engines must demonstrate that their catalyst is reducing CO emissions by 75 percent or more, or alternatively, that THC emissions are being reduced by at least 30 percent during the catalyst activity check. If the emissions from the engine do not exceed the levels required for the initial test or annual checks of the catalyst, then the catalyst is considered to be working properly. If the emissions exceed the specified pollutant levels in the rule, the exceedance(s) is/are not considered a violation, but the owner or operator would be required to shut down the engine and take appropriate corrective action (e.g., repairs, clean or replace the catalyst, as appropriate). A follow-up test must be conducted within 7 da ys of the engine being started up again to demonstrate that the emission levels are being met. If the retest shows that the emissions continue to exceed the specified levels, the statio nary RICE must again be shut down as soon as safely possible, and the engine may not operate, except for purposes of start-up and testing, until the owner/operator demonstrates through testin g that the emissions do not exceed the levels specified.4-13 4.2.3.3 Compliance Date The EPA has received some questions regarding whether the compliance dates for engines impacted by the 2010 amendments and th is proposed reconsideration will be extended. Affected sources that may be impacted by this action have expressed concern about having sufficient time to comply with the rule by the compliance date, which is May 3, 2013, for existing stationary CI RICE and October 19, 2013, for existing stationary SI RICE. Sources impacted by this reconsideration are particularly concerned with compliance in the event that the EPA does not finalize changes that are substantially similar to the changes being proposed in this action. The EPA does not intend to extend the May 3, 2013, and October 19, 2013, compliance dates, because there are many engines that must meet those compliance dates that are not impacted by this reconsideration. However, we note that sources that are affected by the reconsideration and that may need additional ti me to install controls to comply with the applicable requirements can request up to an additional year to install controls, as specified in 40 CFR 63.6(i).

4.3 What Are the Pollutants Regulated by the Rule? The proposed reconsideration rule regulates em issions of HAP. Available emissions data show that several HAP, which are formed during the combustion process or which are contained within the fuel burned, are emitted from stationary engines. The HAP which have been measured in emission tests conducted on SI stationary RICE include: formaldehyde, acetaldehyde, acrolein, methanol, benzene, toluene, 1,3-butadiene, 2,2,4-trimethylpentane, hexane, xylene, naphthalene, PAH, methylene chloride, and ethylbenzene. EPA described the health effects of these HAP and other HAP emitted from the operation of stationary RICE in the preamble to 40 CFR part 63, subpart ZZZZ, published on June 15, 2004 (69 FR 33474). These HAP emissions are known to cause, or contribute significantly to air pollution, which may reasonably be anticipated to endanger public health or welfare. For the standards included in this action, EPA believes that previous determinations regarding the appropriateness of using formaldehyde and carbon monoxide (CO) both in concentration (parts per million (ppm)) levels as surrogates for HAP for stationary RICE are still valid. Consequently, EPA is promulgating CO or formaldehyde standards in order to regulate HAP emissions.4-14 In addition to reducing HAP, the emission cont rol technologies that will be installed on stationary RICE to reduce HAP will also redu ce CO and VOC, and for rich burn engines will also reduce NOx. 4.4 Cost Impacts 4.4.1 Introduction EPA has determined that oxidation catalysts for two-stroke lean burn (2SLB) and fourstroke lean burn (4SLB) engines, and non-sel ective catalytic reduction (NSCR) for four-stroke rich burn (4SRB) engines are applicable contro ls for HAP reduction from existing stationary SI RICE. To determine the capital and annual costs for these control technologies, equipment cost information was obtained from industry groups 2 and vendors and manufacturers of SI engine control technology. In some cases, the industry groups provided a breakdown of the capital and annual cost components for each of the retrofit options. Using this cost data, annualized cost and capital cost equations for oxidation catalysts and NSCR were developed. 4.4.2 Control Cost Methodology The following sections describe the methodology used to derive the total capital and total annual costs for each of the control technology options. These methodologies were used to calculate total capital and total annual costs when only purchased equipment costs were available (e.g., vendor equipment costs). The methodologies were not used for cost data provided by industry groups because they included a breakdo wn of the actual total capital and total annual costs. A summary of the methodologies, equations, and assumptions used to estimate the total capital and total annual costs for some of the cost data are described in the following sections. 4.4.2.1 Total Capital Costs The total capital cost includes the direct and indirect costs of purchasing and installing the control equipment. The direct cost includ es the cost of purchasing the equipment and instrumentation, cost of shipping, and the cost of installing the control equipment. The indirect cost includes the costs for engineering, contractor fees, testing costs, and also includes costs for contingencies, such as additional modifications, or delays in startup. The total capital cost equation can be summarized as follows: Total Capital Cost (TCC) = Direct Costs (DC) + Indirect Costs (IC)

2 Reciprocating Internal Combustion Engine National Emission Standards for Hazardous Air Pollutants (RICE NESHAP) Proposed Revisions – Emission Control Costs Analysis Background for “Above the Floor” EmissionControls for Natural Gas-Fired RICE, Innovative Environmental Solutions Inc., October 2009. (EPA-HQ-OAR2008-0708-0279).4-15 The direct costs include the costs of purchasing and installing the contro l equipment and can be summarized using the following equation; DC = Purchased Equipment Cost (PEC) + Direct Installation Costs (DIC). A summary of the cost assumptions for PEC includes the following:

 Control Device and Auxiliary Equipment (EC);

 Instrumentation (10% of EC);

 Sales Tax (3% of EC);

 Freight (5% of EC);

and can be summarized as:

PEC = 118% EC. A summary of the cost assumptions for DIC includes the following:

 Foundations and Supports (8% of PEC);

 Handling and Erection (14% of PEC);

 Electrical (4% of PEC);

 Piping (2% of PEC);

 Insulation for Ductwork (1% of PEC);

 Painting (1% of PEC);

and can be summarized as:

DIC = 30% PEC = 0.3 PEC. Therefore, the direct costs can be simplified using the following equation:

DC = PEC + 0.3 PEC = 1.3 PEC. The indirect costs include the costs of engineering and contractor fees and contingencies and can be summarized using the following equation: IC = Indirect Installation Costs (ICC) + Contingencies (C).4-16 A summary of the cost assumptions for ICC includes the following:

 Engineering (10% of PEC);

 Construction and Field Expenses (5% of PEC);

 Contractor Fees (10% of PEC);

 Startup (2% of PEC);

 Performance Test (1% of PEC);

and can be summarized as:

IIC = 28% PEC = 0.28 PEC. A summary of the cost assumptions for C includes the following:

 Equipment Redesign and Modifications;

 Cost Escalations;

 Delays in Startup;

and is assumed to be:

C = 3% PEC = 0.03 PEC. Therefore, the IC can be summarized using the following equation: IC = 0.28 PEC + 0.03 PEC = 0.31 PEC, and the simplified TCC equation can be expressed as: TCC = 1.3 PEC + 0.31 PEC = 1.61 PEC = 1.61 (1.18 EC) = 1.9 EC 4.4.2.2 Total Annual Costs The total annual cost includes the direct and indirect annual costs of operating and maintaining the control equipment. The direct annual cost includes the cost of the utilities, operating labor, and control device cleaning and maintenance. The indirect annual cost includes the overhead costs such as spare parts for the control equipment, administrative charges, and the capital recovery of the control technology. The total annual cost equation can be summarized as follows:4-17 Total Annual Cost (TAC) = Direct Annual Costs (DAC) + Indirect Annual Costs (IAC). The DAC includes the following parameters:

 Utilities;

 Operating Labor;

 Maintenance;

 Annual Compliance Test;

 Catalyst Cleaning;

 Catalyst Replacement;

 Catalyst Disposal. The IAC includes the following parameters:

 Overhead;

 Fuel Penalty;

 Property Tax;

 Insurance;

 Administrative Charges;

 Capital Recovery = {I(1+I) n /((1+I) n -1)*TCC} where I is the in terest rate, and n is the equipment life. To calculate DAC, the costs were broken up into three separate costs: operation and maintenance materials cost, operation and maintenance labor cost, and the cost for annual performance testing or downtime or allowance for catalyst washing. Actual annual cost data from the industry groups were used to estimate the DAC for each of the control technologies. The IAC was broken up into three separate costs: administrative, fuel penalty, and capital recovery. Again, cost data from the industry groups was used to estimate these costs for each of the control technologies. No fuel penalty wa s estimated for the oxidation catalyst control technologies, because this control technology does not increase the fuel usage of the SI engine.4-18 4.4.3 Control Cost Equations Control cost equations were developed for 2SLB oxidation catalyst, 4SLB oxidation catalyst, and a NSCR for 4SRB engines using the to tal capital cost and total annual cost data for each control technology. Control cost equations for 2SLB and 4SLB oxidation catalysts were developed separately because the 2SLB oxidation catalyst requires a premium catalyst to reduce the HAP compounds because of the low exhaust temperature of 2SLB engines. 4.4.3.1 2SLB Oxidation Catalyst The 2SLB oxidation catalyst is an effective control technology that reduces HAP emissions from a 2SLB SI engine by oxidizing organic compounds using a catalyst. The oxidation catalyst unit contains a honeycomb-like structure or substrate with a large surface area that is coated with a premium active catalyst layer such as platinum or palladium. The oxidation catalyst works by oxidizing carbon monoxide (CO) and gaseous hydrocarbons (HAP) in the exhaust gas to carbon dioxide (CO 2 ) and water. The reduction of CO and HAP varies depending on the type of catalyst used and the exhaust temperature of the pollutant stream. The cost of retrofitting an oxidation catalyst to an existing 2SLB engine was estimated using cost data obtained from vendors and industry groups covering engines ranging from 58 horsepower (HP) to 4,670 HP. An equipment life of 10 years and an interest rate of 7 percent were used to estimate the capital recovery of the control technology and the fuel penalty was assumed to be negligible. The cost equations are presented in 2009 dollars. The total annualized cost equation for retrofitting an oxidation catalyst on a 2SLB engine was estimated to be: 2SLB Oxidation Catalyst Total Annual Cost = $11.4 x HP + $13,928

where HP = engine size in HP. The linear equation has a correlation coefficient of 0.8046, which shows the data fits the equation closely. Therefore, this equation was used to estimate annualized cost for an oxidation catalyst on a 2SLB engine. The total capital cost equation for retrofitting an oxidation catalyst on a 2SLB engine was estimated to be:4-19 2SLB Oxidation Catalyst Total Capital Cost = $47.1 x HP + $41,603

where HP = engine size in HP. 4.4.3.2 4SLB Oxidation Catalyst The 4SLB oxidation catalyst is an effective control technology that reduces HAP emissions from a 4SLB SI engine by oxidizing organic compounds using a catalyst. The oxidation catalyst unit contains a honeycomb-like structure or substrate with a large surface area that is coated with a premium active catalyst layer such as platinum or palladium. The oxidation catalyst works by oxidizing CO and gaseous hydrocarbons (HAP) in the exhaust gas to CO 2 and water. The reductions of CO and HAP vary depending on the type of catalyst used and the exhaust temperature of the pollutant stream. The cost of retrofitting an oxidation catalyst to an existing 4SLB engine was estimated using cost data obtained from vendors and industry groups covering engines ranging from 400 HP to 8,000 HP. Again, an equipment life of 10 years and an interest rate of 7 percent were used to estimate the capital recovery of the control technology and the fuel penalty was assumed to be negligible. The cost equations are presented in 2009 dollars. The total annualized cost equation for retrofitting an oxidation catalyst on a 4SLB engine was estimated to be: 4SLB Oxidation Catalyst Total Annual Cost = $1.81 x HP + $3,442

where HP = engine size in HP. The linear equation has a correlation coefficient of 0.9779, which shows the data fits the equation very closely. Therefore, this equation was used to estimate annualized cost for an oxidation catalyst on a 4SLB engine. The total capital cost equation for retrofitting an oxidation catalyst on a 4SLB SI engine was estimated to be: 4SLB Oxidation Catalyst Total Capital Cost = $12.8 x HP + $3,0694-20 where HP = engine size in HP. A summary of the cost calculations, regression analyses, and graphical representations of the annual and capital cost data are presented in Appendix A of the cost memo that is the basis for the cost data presented in this RIA. 3 4.4.3.3 Non-Selective Catalytic Reduction The NSCR or three-way catalyst is used to control HAP emissions from 4SRB engines. In addition to HAP reductions, NSCR also reduces the emissions of nitrogen oxides (NOx), CO, and other hydrocarbons (HC). The reduction of HAP and CO takes place through an oxidation reaction that converts HAP to CO 2 and water and converts CO to CO 2 . The conversion of NOx takes place through a reduction of the NOx to nitrogen gas and oxygen. The cost of retrofitting an NSCR on an existing 4SRB engine was estimated based on cost data received from vendors and industry groups. A linear regression analysis was done on the data set and the linear equation for annualized cost was; NSCR Annual Cost = $4.77 x HP + $5,679

where HP = engine size in HP. The linear equation has a correlation coefficient of 0.7987, which shows an acceptable representation of the cost data. Therefore, this equation was used to estimate annualized cost for retrofitting the NSCR control technology on 4SRB engines. The capital cost equation for retrofitting an air- to-fuel ratio (AFR) controller and NSCR on a 4SRB engine was estimated to be: NSCR Capital Cost = $24.9 x HP + $13,118

where HP = engine size in HP.

3 Memorandum from Bradley Nelson, EC/R to Melanie King, EPA. OAQPS/SPPD/ESG. Impacts Associated with NESHAP for Existing Stationary SI RICE. June 29, 2010.4-21 4.4.4 Summary Table 4-1 presents a summary of the annual and capital control costs as a function of engine size for the control technologies applicable to existing stationary SI engines, as discussed in this memorandum. Table 4-1. Summary of Annual and Capital Costs Equations for Existing Stationary SI Engines

HAP Control Device Annual Cost ($2009) Capital Cost ($2009) 2SLB Oxidation Catalyst $11.4 x HP + $13,928 $47.1 x HP + $41,603 4SLB Oxidation Catalyst $1.81 x HP + $3,442 $12.8 x HP + $3,069 NSCR $4.77 x HP + $5,679 $24.9 x HP + $13,118

A summary of the annual and capital costs associated with the rule and obtained using the methodology described above are presented in Tables 4-2 to 4-5 below. 4 These costs are used as input to the economic impact as well as the small entity analysis.

4 Memorandum from Bradley Nelson, EC/R to Melanie King, EPA. OAQPS/SPPD/ESG. Impacts Associated with NESHAP for Existing Stationary SI RICE. June 29, 2010.Table 4-2. Summary of Major Source and Area Source Costs for the SI RICE NESHAPaSize Range (HP)CapitalControl CostAnnualControl CostInitial TestRecordkeepingReportingMonitoring—Capital CostMonitoring—AnnualCostTotal AnnualCostsTotal CapitalCostsMajor Sources25–50 $0 $0 $0$4,060,795 $0 $0 $0$4,060,795 $050–100 $0 $0 $0$1,087,540 $0 $0 $0$1,087,540 $0100–175 $48,502,361 $37,071,061 $15,971,384 $1,721,899 $5,725,314 $0 $0 $60,489,657 $48,502,361175–300 $13,225,919 $8,382,568 $3,442,648 $371,157 $1,234,097 $0 $0 $13,430,470 $13,225,919300–500 $10,934,795 $5,562,872 $2,123,326 $228,919 $761,155 $0 $0 $8,676,262 $10,934,795500–600 $0 $0 $0 $0 $0 $0 $0 $0 $0600–750 $0 $0 $0 $0 $0 $0 $0 $0 $0>750 $0 $0 $0 $0 $0 $0 $0 $0 $0Total $72,663,076 $51,016,500 $21,537,358 $7,470,310 $7,720,566 $0 $0 $87,744,734 $72,663,076Area Sources25–50 $0 $0 $0$6,668,944 $0 $0 $0$6,668,944 $050–100 $0 $0 $0$2,868,511 $0 $0 $0$2,868,511 $0100–175 $0 $0 $0$3,529,711 $0 $0 $0$3,529,711 $0175–300 $0 $0 $0$1,264,799 $0 $0 $0$1,264,799 $0300–500 $0 $0 $0$908,913 $0 $0 $0$908,913 $0500–600 $7,547,433 $2,662,805 $248,366 $454,493 $1,26,426 0 0 $3,492,090 $7,547,433600–750 $1,522,236 $505,221 $44,323 $77,882 $22,562 0 0 $649,988 $1,522,236>750 $21,075,418 $6,214,397 $472,244 $829,795 $240,387 0 0 $7,756,823 $21,075,418Total $30,145,088 $9,382,423 $764,933$16,603,048 $389,375 0 0 $27,139,780 $30,145,088Grand TotalTotal $102.808,163 $60,398,923 $22,302,292 $24,073,358 $8,106,972 0 0 $114,884,514 $102,808.163aCosts are presented in 2009 dollars.

### 4-23Table 4-3. Summary of Major Source and AreaSource NAICS Costs for the SI RICE NESHAPaMajor Source Area Source Total (Major + Area)NAICSCapital Cost Annual Cost Capital Cost Annual Cost Capital Cost Annual Cost2211 Electric Power Generation $52,905,258 $63,062,494 $11,698,144 $12,138,277 $64,603,403 $75,200,77248621 Natural Gas Transmission $1,484,494 $1,462,530 $13,718,381 $6,142,839 $15,202,876 $7,605,369211111 Crude Petroleum & NGProduction $4,561,236 $6,138,383$71,439 $951,462$4,632,675 $7,089,844211112 Natural Gas Liquid Producers $4,561,236 $6,138,383 $71,439 $951,462 $4,632,675 $7,089,84492811 National Security $5,878,362 $7,006,944 $1, 299,794 $1,348,697 $7,178,1566 $8,355,641335312 Hydro Power Units $0 $25,248 $0 $37,872 $0 $63,120335312 Irrigation Sets $3,025,050 $3,230,856 $3,285,990 $4,999,041 $6,310,940 $8,229,896333992 Welders $247,440 $679,896 $0 $570,130 $247,440 $1,250,027Total $72,663,076 $87,744,734 $30,145,088 $27,139,780$102,808,163$114,884,514aCosts are presented in 2009 dollars.

### 4-24Table 4-4. Summary of Major Source and Area Source NAICS Costs for the SI RICE NESHAP, by SizeaMajor SourceArea SourceTotal (Major + Area)NAICSCapital Cost Annual Cost Capital Cost Annual Cost Capital Cost Annual CostElectric Power Generation (2211)25–50 hp$0 $2,758,459$0 $4,137,688$0 $6,896,14750–100 hp$0 $606,144$0 $909,215$0 $1,515,359100–175 hp$33,868,173 $42,238,648$0 $1,803,548 $33,868,173 $44,042,196175–300 hp$10,603,849 $10,767,847$0 $446,361 $10,603,849 $11,214,209300–500 hp$8,433,236 $6,691,397$0 $264,820 $8,433,236 $6,956,217500–600 hp$0$0 $2,543,944 $1,177,047 $2,543,944 $1,177,047600–750 hp$0$0 $515,514 $220,122 $515,514 $220,122>750 hp$0$0 $8,638,687 $3,179,475 $8,638,687 $3,179,475Total Electric Power Generation 2211$52,905,258 $63,062,494 $11,698,144 $12,138,277 $64,603,403 $75,200,772Natural Gas Transmission (48621)25–50 hp$0 $102$0 $1,934$0 $2,03650–100 hp$0 $4,872$0 $92,571$0 $97,443100–175 hp$301,721 $376,291$0 $203,518 $301,721 $579,809175–300 hp$643,157 $653,104$0 $342,928 $643,157 $996,032300–500 hp$539,617 $428,162$0 $214,637 $539,617 $642,799500–600 hp$0$0 $1,925,560 $890,929 $1,925,560 $890,929600–750 hp$0$0 $949,443 $405,408 $949,443 $405,408>750 hp$0$0 $10,843,377 $3,990,913 $10,843,377 $3,990,913Total Natural Gas Transmission (48621)$1,484,494 $1,462,530 $13,781,381 $6,142,839 $15,202,876 $7,605,369Crude Petroleum & NG Production (211111)25–50 hp$0 $388,115$0 $582,173$0 $970,28850–100 hp$0 $66,698$0 $100,047$0 $166,744100–175 hp$4,549,775 $5,674,246$0 $242,285 $4,549,775 $5,916,531(continued)

### 4-25Table 4-4. Summary of Major Source and Area Source NAICS Costs for the SI RICE NESHAP, by Sizea(continued)Major SourceArea SourceTotal (Major + Area)NAICSCapital Cost Annual Cost Capital Cost Annual Cost Capital Cost Annual Cost175–300 hp$1,037 $1,053$0$44 $1,037 $1,096300–500 hp$10,424 $8,271$0 $327 $10,424 $8,598500–600 hp$0$0 $3,102 $1,435 $3.102 $1,435600–750 hp$0$0$0$0$0$0>750 hp$0$0 $68,337 $25,151 $68,337 $25,151Total Crude Petroleum & NG Production(211111) $4,561,236$6,138,383$71,439$951,462$4,632,675$7,089,844Natural Gas Liquid Producers (211112)25–50 hp$0 $388,115$0 $582,173$0 $970,28850–100 hp$0 $66,698$0 $100,047$0 $166,744100–175 hp$4,549,775 $5,674,246$0 $242,285 $4,549,775 $5,916,531175–300 hp$1,037 $1,053$0$44 $1,037 $1,096300–500 hp$10,424 $8,271$0 $327 $10,424 $8,598500–600 hp$0$0 $3,102 $1,435 $3,102 $1,435600–750 hp$0$0$0$0$0$0>750 hp$0$0 $68,337 $25,151 $68,337 $25,151Total Natural Gas Liquid Producers (211112) $4,561,236 $6,138,383 $71,439 $951,462 $4,632,675 $7,089,844National Security (92811)25–50 hp$0 $306,495$0 $459,743$0 $766,23950–100 hp$0 $67,349$0 $101,024$0 $168,373100–175 hp$3,763,130 $4,693,183$0 $200,394 $3,763,130 $4,893,577175–300 hp$1,178,205 $1,196,427$0 $49,596 $1,178,205 $1,246,023300–500 hp$937,026 $743,489$0 $29,424 $937,026 $772,913500–600 hp$0$0 $282,660 $130,783 $282,660 $130,783(continued)

### 4-26Table 4-4. Summary of Major Source and Area Source NAICS Costs for the SI RICE NESHAP, by Sizea(continued)Major SourceArea SourceTotal (Major + Area)NAICSCapital Cost Annual Cost Capital Cost Annual Cost Capital Cost Annual Cost600–750 hp$0$0 $57,279 $24,458 $57,279 $24,458>750 hp$0$0 $959,854 $353,275 $959,854 $353,275Total National Security (92811)$5,878,362 $7,006,944 $1,299,794, $1,348,697 $7,178,156 $8,355,641Hydro Power Units (335312)25–50 hp$0 $22,688$0 $34,032$0 $56,72150–100 hp$0 $2,560$0 $3,840$0 $6,399100–175 hp$0$0$0$0$0$0175–300 hp$0$0$0$0$0$0300–500 hp$0$0$0$0$0$0500–600 hp$0$0$0$0$0$0600–750 hp$0$0$0$0$0$0>750 hp$0$0$0$0$0$0Total Hydro Power Units (335312)$0 $25,248$0 $37,872$0 $63,120Irrigation Sets (335312)25–50 hp$0 $32,913$0 $625,338$0 $658,25150–100 hp$0 $65,825$0 $1,250,677$0 $1,316,502100–175 hp$1,222,348 $1,524,449$0 $824,505 $1,222,348 $2,348,954175–300 hp$798,634 $810,986$0 $425,827 $798,634 $1,236,813300–500 hp$1,004,068 $796,683$0 $399,376 $1,004,068 $1,196,060500–600 hp$0$0 $2,789,064 $1,290,460 $2,789,064 $1,290,460600–750 hp$0$0$0$0$0$0>750 hp$0$0 $496,827 $182,857 $496,827 $182,857Total Irrigation Sets (335312)$3,025,050 $3,230,856 $3,285,890 $4,999,041 $6,310,940 $8,229,896(continued)

### 4-27Table 4-4. Summary of Major Source and Area Source NAICS Costs for the SI RICE NESHAP, by Sizea(continued)Major SourceArea SourceTotal (Major + Area)NAICSCapital Cost Annual Cost Capital Cost Annual Cost Capital Cost Annual CostWelders (333992)25–50 hp$0 $163,908$0 $245,862$0 $409,77150–100 hp$0 $207,394$0 $311,091$0 $518,485100–175 hp$247,440 $308,594$0 $13,177 $247,440 $321,771175–300 hp$0$0$0$0$0$0300–500 hp$0$0$0$0$0$0500–600 hp$0$0$0$0$0$0600–750 hp$0$0$0$0$0$0>750 hp$0$0$0$0$0$0Total Welders (333992)$247,440 $679,896$0 $570,130 $247,440 $1,250,027Total$72,663,076 $87,744,734 $30,145,088 $27,139,780 $102,808,163 $114,884,514aCosts are presented in 2009 dollars.

### 4-28Table 4-5. Summary of Major Source and Area Source NAICSCosts for the SI RICE NESHAP, by Number of EnginesaNumber of Engines Total (Major + Area)NAICS MajorAreaTotalCapitalCostAnnualCostElectric Power Generation (2211)25–50 hp37,933 56,900 94,833 $0 $6,896,14750–100 hp8,336 12,503 20,839 $0 $1,515,359100–175 hp16,534 24,802 41,336 $33,868,173 $44,042,196175–300 hp4,092 6,138 10,230 $10,603,849 $11,214,209300–500hp2,428 3,642 6,070 $8,433,236 $6,956,217500–600hp0 2,107 2,107 $2,543,944 $1,177,047600–750hp0 363 363 $515,944 $220,122>750hp0 4,677 4,677 $8,638,687 $3,179,475Total Electric Power Generation (2211)69,323 111,132 180,455 $64,603,403 $75,200,772Natural Gas Transmission (48621)25–50hp1 27 28 $0 $2,03650–100hp67 1,273 1,340 $0 $97,443100–175hp147 2,799 2,946 $301,721 $579,809175–300hp248 4,716 4,964 $643,157 $996,032300–500hp155 2,952 3,107 $539,617 $642,799500–600hp0 1,595 1,595 $1,925,560 $890,929600–750hp0 668 668 $949,443 $405,408>750hp0 5,871 5,871 $10,843,377 $3,990,913Total Natural Gas Transmission (48621)619 19,899 20,519 $15,202,876 $7,605,369Crude Petroleum & NG Production (211111)25–50 hp5,3378,006 13,343$0 $970,28850–100hp917 1,376 2,293 $0 $166,744100–175hp2,221 3,332 5,553 $4,549,775 $5,916,531(continued)

### 4-29Table 4-5. Summary of Major Source and Area Source NAICSCosts for the SI RICE NESHAP, by Number of Enginesa(continued)Number of Engines Total (Major + Area)NAICS MajorAreaTotalCapitalCostAnnualCost175–300hp0 1 1 $1,037 $1,096300–500hp3 5 8 $10,424 $8,598500–600hp0 3 3 $3,102 $1,435600–750hp0 0 0 $0 $0>750 hp03737 $68,337 $25,151Total Crude Petroleum & NG Production (211111)8,479 12,758 21,237 $4,632,675 $7,089,844Natural Gas LiquidProducers (211112)25–50 hp5,3378,006 13,343$0 $970,28850–100hp917 1,376 2,293 $0 $166,744100–175hp2,221 3,332 5,553 $4,549,775 $5,916,531175–300hp0 1 1 $1,037 $1,096300–500hp3 5 8 $10,424 $8,598500–600hp0 3 3 $3,102 $1,435600–750hp0 0 0 $0 $0>750 hp03737 $68,337 $25,151Total Natural Gas Liquid Producers (211112)8,479 12,758 21,237 $4,632,675 $7,089,844National Security (92811)25–50 hp4,2156,322 10,537$0 $766,23950–100hp926 1,389 2,315 $0 $168,373100–175hp1,837 2,756 4,593 $3,763,130 $4,893,577175–300 hp455 682 1,137 $1,178,205 $1,246,023300–500hp270 404 674 $937,026 $772,913500–600hp0 234 234 $282,660 $130,783(continued)

### 4-30Table 4-5. Summary of Major Source and Area Source NAICSCosts for the SI RICE NESHAP, by Number of Enginesa(continued)Number of Engines Total (Major + Area)NAICS MajorAreaTotalCapitalCostAnnualCost600–750 hp04040 $57,279 $24,458>750hp0 520 520 $959.854 $353,275Total Natural Gas Liquid Producers (211112)7,702 12,347 20,050 $7,178,156 $8,355,641Hydro Power Units (335312)25–50hp312 468 780 $0 $56,72150–100hp35 53 88 $0 $6,399100–175hp0 0 0 $0 $0175–300hp0 0 0 $0 $0300–500hp0 0 0 $0 $0500–600hp0 0 0 $0 $0600–750hp0 0 0 $0 $0>750hp0 0 0 $0 $0Total Hydro Power Units (335312)347521868$0 $63,120Irrigation Sets (335312)25–50hp453 8,599 9,052 $0 $658,25150–100 hp905 17,199 18,104 $0 $1,316,502100–175 hp597 11,338 11,935 $1,222,348 $2,348,954175–300hp308 5,856 6,164 $798,634 $1,236,813300–500hp289 5,492 5,781 $1,004,068 $1,196,060500–600hp0 2,310 2,310 $2,789,064 $1,290,460600–750hp0 0 0 $0 $0>750hp0 269 269 $496,827 $182857Total Irrigation Sets (335312)2,552 51,063 53,615 $6,310,940 $8,229,896(continued)

### 4-31Table 4-5. Summary of Major Source and Area Source NAICSCosts for the SI RICE NESHAP, by Number of Enginesa(continued)Number of Engines Total (Major + Area)NAICS MajorAreaTotalCapitalCostAnnualCostWelders (333992)25–50hp2,254 3,381 5,635 $0 $409,77150–100hp2,852 4,278 7,130 $0 $518,485100–175hp121 181 302 $247,440 $321,771175–300hp0 0 0 $0 $0300–500hp0 0 0 $0 $0500–600hp0 0 0 $0 $0600–750hp0 0 0 $0 $0>750hp0 0 0 $0 $0Total Welders (333992)5,2277,840 13,067 $247,440 $1,250,027Total102,729 228,319 331,047 $382,802,298 $253,374,9391Costs are presented in 2009 dollars.4.4.5 Caveats and Uncertainties in the Cost Estimates * Current knowledge about NOx control techniques and costs is applied in this study. Advances such as alternative catalyst formulations may occur between now and when sources comply with this rulemaking that may lower costs. Scale economies can also lower per unit production costs as the market for these NOx control techniques expands. * The alternative control techniques and corresponding emission reductions and costs may not apply to every unit within the source category. Many factors influence the performance and cost of any control technique. Because control technology references typically evaluate average retrofit situations, costs may be underestimated for the fraction of the source population with difficult to retrofit conditions. Difficult to retrofit conditions may be less of an issue for RICEs than for other point sources, however. * NOx control efficiency and cost estimate s associated with source category-control strategy combinations are represented as point estimates. In practice, control effectiveness and costs will vary by engine.4-33 4.5 Baseline Emissions and Emission Reductions The baseline emissions, emissions factors and emissions reductions associated with the proposed reconsideration rule are provided in the tables below. Emissions are in tons per year. Table 4-6. Summary of Major Source and Area Source Baseline Emissions for the SI RICE NESHAP in 2013

Baseline Emissions (TPY) Size Range (HP) HAP CO NOx VOC Major Sources

25–50 hp 1,107 28,557 41,751 5,696 50–100 hp 593 15,296 22,363 3,051 100–175 hp 1,721 44,399 64,913 8,855 175–300 hp 641 16,530 24,168 3,297 300–500 hp 666 17,171 25,105 3,425 500–600 hp 0 0 0 0 600–750 hp 0 0 0 0 >750 hp 0 0 0 0 Total 4,728 121,953 178,301 24,323 Area Sources

25–50 hp 1,818 46,898 68,566 9,354 50–100 hp 1,564 40,344 58,985 8,047 100–175 hp 3,529 91,013 133,065 18,153 175–300 hp 2,184 56,331 82,359 11,235 300–500 hp 2,643 68,178 99,679 13,598 500–600 hp 1,830 47,273 69,094 9,415 600–750 hp 383 9,876 14,438 1,969 >750 hp 6,041 155,890 227,890 31,076 Total 19,993 515,803 754,077 102,846 Major + Area Total 24,722 637,756 932, 377 127,169

Table 4-7. Emissions Factors

Engine HAP (lb/hp-hr) CO (lb/hp-hr) NOx (lb/hp-hr) VOC (lb/hp-hr) Formaldehyde (lb/hp-hr) 2SLB 5.96  10 -4 1.06  10 -2 4.18  10 -2 3.07  10 -3 4.29  10 -4 4SLB 5.41  10 -4 3.92  10 -3 1.15  10 -2 2.78  10 -3 3.96  10 -4 4SRB 2.43  10 -4 1.93  10 -2 1.47  10 -2 1.25  10 -3 1.75  10 -4 Comment [A4]: Please define baseline.4-34 Table 4-8. Summary of Major Source and Area Source Emissions Reductions for the SI RICE NESHAP in 2013

Emission Reductions (TPY) Size Range (HP) HAP CO NOx VOC Major Sources

25–50 hp 0 0 0 0 50–100 hp 0 0 0 0 100–175 hp 744 7,124 0 3,826 175–300 hp 277 2,653 0 1,424 300–500 hp 288 2,755 0 1,480 500–600 hp N/A N/A N/A 0 600–750 hp N/A N/A N/A 0 >750 hp N/A N/A N/A 0 Total 1,308 12,532 0 6,730 Area Sources

25–50 hp 0 0 0 0 50–100 hp 0 0 0 0 100–175 hp 0 0 0 0 175–300 hp 0 0 0 0 300–500 hp 0 0 0 0 500–600 hp 101 2,070 2,,063 517 600–750 hp 22 453 452 113 >750 hp 347 7,156 7,133 1,787 Total 470 9,679 9,648 2,418 Major + Area Total 1,778 22,211 9,648 9,1475-1 Section 5 ECONOMIC IMPACT ANALYSIS, ENERGY IMPACTS, AND SOCIAL COSTS The EIA provides decision makers with social cost estimates and enhances understanding of how the costs may be distributed across stakeholders (EPA, 2010). Although several economic frameworks can be used to estimate social costs for regulations of this size and sector scope, OAQPS has typically used partial equilibrium market models. However, the current data do not provide sufficient details to develop a mark et model; the data that are available have little or no sector/firm detail and are reported at the na tional level. In addition, some sectors have unique market characteristics that make developi ng partial equilibrium models difficult. Given these constraints, we used the direct compliance costs as a measure of total social costs. In addition, we also provide a qualitative analysis of the proposed reconsidered rule’s impact on stakeholder decisions, a qualitative discussion on if unfunded mandates occur as a result of this proposed reconsidered rule, and the potential dist ribution of social costs between consumers and producers. 5.1 Compliance Costs of the Proposed Reconsidered Rule EPA’s engineering cost analysis estimates the total annualized costs of the proposed reconsidered rule are $115 million (in 2010 dollars) (EC/R, 2012). The majority of the costs are incurred by the electric power sector (65%). The remaining industries each account for less than 8% of the total annualized cost . The industrial classification for each engine is taken from the Power Systems Research (PSR) database, which is the major source of data for the engines affected by this rule. The PSR database used as a basis for the analyses in this RIA contains information on both mobile and stationary engines, among other data, and does so not only for the U.S. but worldwide. PSR has collected such data for more than 30 years. The Office of Transportation and Air Quality (OTAQ) uses this database frequently in the development of their mobile source rules. The annualized compliance costs per engine vary by the engine size. For 500 hp engines or less, the annualized per-engine costs are below $371 per engine. Per-engine annualized compliance costs for higher horsepower (hp) engines range up to $2,800. The proposed reconsidered rule will affect approximately 331,000 existing stationary SI engines. As shown in Figure 5-1, most of the affected engines fall within the 25 to 50 hp category (45%). The next highest categories are 100 to 175 hp (22%) and 50 to 100 hp (16%).5-2 Figure 5-1. Distribution of Engine Population by Horsepower Group

To assess the size of the compliance relative to the value of the goods and services for industries using affected engines, we collected Census data for selected industries. At the industry level, the annualized costs represent a very small fraction of revenue (less than 1%), for all affected industries. Results for affected industries can be found in Table 5-1. These industry level cost-to-sales ratios can be interpreted as an average impact on potentially affected firms in these industries. Based on the cost-to-sales ratios, we can conclude that the annualized cost of this rule should be no higher than 1% of the sales on average for a firm in each of these industries, excluding natural gas transmission and natural gas liquid producers, which face slightly higher costs to sales ratios. 45%

16% 22%

7% 5% 2% 0% 3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

25-50 hp 50-100 hp 100-175 hp 175-300 hp 300-500 hp 500-600 hp 600-750 hp >750 hp5-3 5.2 Social Cost Estimate As shown in Table 5-1, the compliance costs are only a small fraction of the affected product value; this suggests that shift of the supply curve may also be small and result in small changes in market prices and consumption. EPA believes the national annualized compliance cost estimates provide a reasonable approximation of the social cost of this proposed reconsidered rule. EPA believes this approxim ation is better for industries whose markets are well characterized as perfectly competitive. This approximation is less well understood for industries where the characterization of markets is not always perfectly competitive such as electric power generation whose legal incidence of this rule is approximately 65 percent of the annualized compliance cost. However, given th e data limitation noted earlier, EPA believes the accounting for compliance cost is a reasonable approximation to inform policy discussion in this rulemaking. To shed more light on this issue, EPA ran hypothetical analyses and the results are in Tables 5-2 and 5-3 later in this RIA.

5.3 How Might People and Firms Respond? A Partial Equilibrium Analysis Markets are composed of people as consumers and producers trying to do the best they can given their economic circumstances. One way eco nomists illustrate behavioral responses to pollution control costs is by using market supply and demand diagrams. The market supply curve describes how much of a good or service firms are willing and able to sell to people at a Table 5-1. Selected Industry-Level Annualized Compliance Costs as a Fraction of Total Industry Revenue: 2009

Total Annualized Costs Sales, Shipments, Receipt, or Revenue ($Billion) Industry (NAICS) Industry Name ($ million) a ($2007) ($2009) Cost-toSales Ratio 2211 Electric Power Generation $128.4 $440.4 $453.7 0.004% 48621 Natural Gas Transmission $68.9 $16.4 $16.9 0.41% 211111 Crude Petroleum & NG Production $7.4 $214.2 $220.5 0.001% 211112 Natural Gas Liquid Producers $7.4 $42.4 $43.6 0.005% 92811 National Security $14.3 #N/A #N/A #N/A 333992 Welders $1.3 $5.2 $5.5 0.025% 111 and 112 Agriculture using irrigation systems a $25.7 $27.9 $28.8 0.09% Field Code Changed5-4 a Irrigation engine costs assumed to be passed on to agricultural sectors that use irrigation systems. N/A: receipts are Not Available for National Security Sources: U.S. Census Bureau; generated by RTI Internationa l; using American FactFinder; “Sector 00: All sectors: Geographic Area Series: Economy-Wide Key Statistics : 2007” <http://factfinder.census.gov>; (July 7th , 2010). U.S. Department of Agriculture (USDA), Nationa l Agricultural Statistics Service (NASS). 2009. “2008 Farm and Ranch Irrigation Survey.” Washington, DC: USDA-NASS. Costs from Existing SI RICE NESHAP Impacts received from EPA 1/26/12 particular price; we often draw this curve as upward sloping because some production resources are fixed. As a result, the cost of producing an additional unit typically rises as more units are made. The market demand curve describes how much of a good or service consumers are willing and able to buy at some price. Holding other factors constant, the quantity demand is assumed to fall when prices rise. In a perfectly competitive market, equilibrium price (P 0 ) and quantity (Q 0 ) is determined by the intersection of the supply and demand curves (see Figure 5-4). 5.3.1 Changes in Market Prices and Quantities To qualitatively assess how the regulation may influence the equilibrium price and quantity in the affected markets, we assumed the market supply function shifts up by the additional cost of producing the good or service; the unit cost increase is typically calculated by dividing the annual compliance cost estimate by the baseline quantity (Q 0 ) (see Figure 5-4). As shown, this model makes two predictions: the pri ce of the affected goods and services are likely to rise and the consumption/production levels are likely to fall.5-5 consumer surplus = –[fghd + dhc] producer surplus = [fghd – aehb] – bdc total surplus = consumer surplus + producer surplus = –[aehb + dhc + bdc] Figure 5-2. Market Demand and Supply Model: With and Without Regulation

The size of these changes depends on two factors: the size of the unit cost increase (supply shift) and differences in how each side of the market (supply and demand) responds to changes in price. Economists measure responses using the concept of price elasticity, which represents the percentage change in quantity divided by the percentage change in price. This dependence has been expressed in the following formula: 5 

##   Demand) of Elasticity Price -Supply of Elasticity Price Supply of Elasticity Price

 cost uniter- Share of p

As a general rule, a higher share of the per-unit cost increases will be passed on to consumers in markets where

 goods and services are necessities and people do not have good substitutes that they can switch to easily (demand is inelastic) and

5 For examples of similar mathematical models in the public finance literature, see Nicholson (1998), pages 444–447, or Fullerton and Metcalf (2002).5-6  suppliers have excess capacity and can easily adjust production levels at minimal costs, or the time period of analysis is long enough that suppliers can change their fixed resources; supply is more elastic over longer periods. Short-run demand elasticities for energy goods (electricity and natural gas), agricultural products, and construction are often inelastic. Sp ecific estimates of short-run demand elasticities for these products can be obtained from existing literature. For the short-run demand of energy products, the National Energy Modeling System (NEMS) buildings module uses values between 0.1 and 0.3; a 1% increase in price leads to a 0.1 to 0.3% decrease in energy demand (Wade, 2003). For the short-run demand of agriculture and construction, the EPA has estimated elasticities to be 0.2 for agriculture and approxim ately 1 for construction (U.S. EPA, 2004). As a result, a 1% increase in the prices of agriculture products would lead to a 0.2% decrease in demand for those products, while a 1% increase in construction prices would lead to approximately a 1% decrease in demand for construction. Given these demand elasticity scenarios (shaded in gray), approximately a 1% increase unit costs would result in a price increase of 0.1 to 1% (Table 5-2). As a result, 10 to 100% of the unit cost increase could be passed on to consumers in the form of higher goods/services prices. This price increase would correspond to a 0.1 to 0.8% decline in consumption in these markets (Table 5-3). Table 5-2. Hypothetical Price Increases for a 1% Increase in Unit Costs

Market Demand Elasticity Market Supply Elasticity 0.1 0.3 0.5 0.7 1 1.5 3

− 0.1 0.5% 0.8% 0.8% 0.9% 0.9% 0.9% 1.0%

− 0.3 0.3% 0.5% 0.6% 0.7% 0.8% 0.8% 0.9%

− 0.5 0.2% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9%

− 0.7 0.1% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8%

− 1.0 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.8%

− 1.5 0.1% 0.2% 0.3% 0.3% 0.4% 0.5% 0.7%

− 3.0 0.0% 0.1% 0.1% 0.2% 0.3% 0.3% 0.5%

53.2 Regulated Markets: The Electric Power Generation, Transmission, and Distribution Sector Given that the electric power sector bears majority of the estimated compliance costs and the industry is also among the last major regulate d energy industries in the United States (EIA, 2010), the competitive model is not nece ssarily applicable for this industry.5-7 Table 5-3. Hypothetical Consumption Decreases for a 1% Increase in Unit Costs

Market Demand Elasticity Market Supply Elasticity 0.1 0.3 0.5 0.7 1 1.5 3

− 0.1

− 0.1%

− 0.1% − 0.1% − 0.1% − 0.1% − 0.1% − 0.1%

− 0.3

− 0.1% − 0.2% − 0.2% − 0.2% − 0.2% − 0.3% − 0.3%

− 0.5

− 0.1% − 0.2% − 0.3% − 0.3% − 0.3% − 0.4% − 0.4%

− 0.7

− 0.1%

− 0.2% − 0.3% − 0.4% − 0.4% − 0.5% − 0.6%

− 1.0

− 0.1% − 0.2% − 0.3% − 0.4% − 0.5% − 0.6% − 0.8%

− 1.5

− 0.1% − 0.3% − 0.4% − 0.5% − 0.6% − 0.8% − 1.0%

− 3.0

− 0.1%

− 0.3% − 0.4% − 0.6% − 0.8% − 1.0% − 1.5%

Although the electricity industry continues to go through a process of restructuring, whereby the industry is moving toward a more competitiv e framework (see Figure 5-3 for the status of restructuring by state), 6 in many states, electricity prices continue to be fully regulated by Public Service Commissions. As a result, the rules an d processes outlined by these agencies would ultimately determine how these additional regulatory costs would be recovered by affected entities. 5.3.3 Partial Equilibrium Measures of Social Cost: Changes Consumer and Producer Surplus In partial equilibrium analysis, the social costs are estimated by measuring the changes in consumer and producer surplus, and these values can be determined using the market supply and demand model (Figure 5-2). The change in consumer surplus is measured as follows:



CS = – [  Q 1 ×  p ] + [0.5 ×  Q ×  p ]. (5.1) Higher market prices and lower quantities lead to consumer welfare losses. Similarly, the change in producer surplus is measured as follows:



PS = [  Q 1 ×  p ] – [  Q 1 × t] – [0.5 ×  Q × (  p – t )]. (5.2) Higher unit costs and lower production level reduce producer surplus because the net price change (  p – t) is negative. However, these losses are mitigated because market prices tend to rise.

6 http://tonto.eia.doe.gov/energy_in_brief/print_pages/electricity.pdf.5-8 Figure 5-3. Electricity Restructuring by State Source. U.S. Energy Information Administration. 2010b.

<http://www.eia.doe.gov/cneaf/electricity/page/restruct uring/restructure_elect.html>. Last updated September 2010.

5.4 Energy Impacts Executive Order 13211 (66 FR 28355, May 22, 2001) provides that agencies will prepare and submit to the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, a Statement of Energy Effects for certain actions identified as “significant energy actions.” Section 4(b) of Executive Order 13211 defines “significant energy actions” as any action by an agency (normally published in the Federal Register ) that promulgates or is expected to lead to the prom ulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1) (i) that is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy;5-9 or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. This rule is not a significant energy action as designated by the Administrator of the Office of Information and Regulatory Affairs because it is not likely to have a significant adverse impact on the supply, distribution, or use of en ergy. EPA has prepared an analysis of energy impacts that explains this conclusion as follows below. With respect to energy supply and prices, the analysis in Table 5-4 suggests at the industry level, the annualized costs represent a ve ry small fraction of revenue (all industries are impacted under 1%). As a result, we can conclude supply and price impacts should be small. To enhance understanding regarding the regulation’s influence on energy consumption, we examined publicly available data describing energy consumption for the electric power sector that will be affected by this rule. The Annual Energy Outlook 2011 (EIA, 2011) provides energy consumption data. As shown in Table 5-4, this in dustry account for less than 0.3% of the U.S. total liquid fuels and less than 8.0% of natural gas. As a result, any energy consumption changes attributable to the regulatory program should not significantly influence the supply, distribution, or use of energy. Table 5-4. U.S. Electric Power a Sector Energy Consumption (Quadrillion BTUs): 2013

Quantity Share of Total Energy Use Distillate fuel oil 0.09 0.1% Residual fuel oil 0.22 0.2% Liquid fuels subtotal 0.31 0.3% Natural gas 7.63 7.9% Steam coal 17.37 18.0% Nuclear power 8.50 8.8% Renewable energy b 4.63 4.8% Electricity Imports 0.12 0.1%

Total Electric Power Energy Consumption c 38.77 40.1% Delivered Energy Use 70.56 73.2% Total Energy Use 96.66 100.0%

a Includes consumption of energy by electricity-only and co mbined heat and power plants whose primary business is

to sell electricity, or electricity and heat, to the pu blic. Includes small power producers and exempt wholesale generators. b Includes conventional hydroelectric, geothermal, wood and wood waste, biogenic municipal solid waste, other

biomass, petroleum coke, wind, photovoltaic and solar thermal sources. Excludes net electricity imports.5-10 c Includes non-biogenic municipal waste not included above. Source: U.S. Energy Information Administration. 2011a . Supplemental Tables to the Annual Energy Outlook 2011.

Table 2. Available at: <http://www.eia.doe.gov/oiaf/aeo/aeoref_tab.html>. 5.5 Unfunded Mandates The UMRA requires that we estimate, where accurate estimation is reasonably feasible, future compliance costs imposed by the rule and any disproportionate budgetary effects. Our estimates of the future compliance costs of the proposed rule are discussed previously in Section 4 of this RIA. We do not believe that there will be any disproportionate budgetary effects of the proposed rule on any particular areas of the country, State or local governments, types of communities (e.g., urban, rural), or particular industry segments. 5.5.1 Future and Disproportionate Costs The UMRA requires that we estimate, where accurate estimation is reasonably feasible, future compliance costs imposed by the rule and any disproportionate budgetary effects. Our estimates of the future compliance costs of the proposed rule are discussed previously in Chapter 4 of this RIA. We do not believe that there will be any disproportionate budgetary effects of the proposed rule on any particular areas of the country, State or local governments, types of communities (e.g., urban, rural), or particular industry segments. 5.5.2 Effects on the National Economy The UMRA requires that we estimate the effect of the proposed rule on the national economy. To the extent feasible, we must estimate the effect on productivity, economic growth, full employment, creation of productive jobs, and international competitiveness of the U.S. goods and services if we determine that accurate estimates are reasonably feasible and that such effect is relevant and material. The nationwide economic impact of the proposed rule is presented earlier in this RIA chapter. This analysis provides estimates of the effect of the proposed rule on most of the categories mentioned above, and these estimates are presented earlier in this RIA chapter. In addition, we have determined that the proposed rule contains no regulatory requirements that might significan tly or uniquely affect small governments. Therefore, today’s rule is not subject to the requirements of section 203 of the UMRA. 5.6 Environmental Justice

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by5-11 identifying and addressing, as appropriate, disproportionately high and adverse human health orenvironmental effects of their programs, policies, and activities on minority populations and lowincome populations in the United States. EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. This rule is a nationwide standard that reduces air toxics emissions from existing statio nary SI engines, thus decreasing the amount of such emissions to which all affected populations are exposed.

5.7 Employment Impact Analysis In addition to addressing the costs and benefits of the proposed reconsideration rule, EPA has analyzed the impacts of this rulemaking on employment, which are presented in this section. While a standalone analysis of employment impacts is not included in a standard cost-benefit analysis, such an analysis is of particular concern in the current economic climate of sustained high unemployment. Executive Order 13563, states, “Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation” (emphasis added). Therefore, and consistent with recent efforts to characterize the employment effects of economically significant rules, the Agency has provided this analysis to inform the discussion of labor demand and employment impacts. This analysis includes estimates of certain short-term and on-going labor requirements (increase in labor demand) associated with reporting and recordkeeping, and the installation, operating and maintenance of control devices. EPA estimates that about 200 jobs will be created or supported in the short-term and about 400 jobs will be created or supported annually on a permanent basis. EPA also provides a qua litative discussion of other potential employment effects, including both increases and decreases. Because of the uncertainties involved, these sets of estimates should not be added in an attempt to characterize the overall employment effect. We have not quantified the rule’s effects on a ll labor in other sectors not regulated by the proposed rule, or the effects induced by changes in workers’ incomes. What follows is an overview of the various ways that environmental regulation can affect employment, followed by a discussion of the estimated impacts of this rule. EPA continues to explore the relevant Comment [A5]: This statement does not appear to be true since the rule relaxes standards for RICE in sparsely populated areas.5-12 theoretical and empirical literature and to seek public comments in order to ensure that such estimates are as accurate, useful and informative as possible. From an economic perspective, labor is an input into producing goods and services; if regulation requires that more labor be used to produce a given amount of output, that additional labor is reflected in an increase in the cost of production. 7 When an increase in employment occurs as a result of a regulation, it is a cost to firms. Moreover, when the economy is at full employment, we would not expect an environmental regulation to have an impact on overall employment because labor is being shifted from one sector to another. On the other hand, in periods of high unemployment, an increase in labor demand due to regulation may result in a short-term net increase in overall employment due to the potential hiring of previously unemployed workers by the regulated sector to he lp meet new requirements (e.g., to install new equipment) or by the environmental protection sector to produce new abatement capital. When significant numbers of workers are unemployed, th e opportunity costs associated with displacing jobs in other sectors are likely to be smaller. To provide a partial picture of the employment consequences of this rule, EPA takes two approaches. First, EPA uses information such as monitoring, recordkeeping, and reporting estimates derived from its cost analysis documentation to generate estimates of employment impacts. Second, the analysis considers the results of Morgenstern, Pizer, and Shih (2002) in estimating the effects of the regulation on the regulated industry. This approach has been used by EPA previously in recent Regulatory Impact Analyses. EPA is interested in public comments on the me rits of including information derived in this fashion for assessing the employment consequences of regulations.

5.7.1 Employment Impacts from Pollution Control Requirements Regulations set in motion new orders for pollution control equipment and services. New categories of employment have been created in the process of implementing regulations. When a new regulation is promulgated, one typical respon se of industry is to order pollution control equipment and services in order to comply with the regulation when it becomes effective, while closure of plants that choose not to comply occurs after the compliance date. With such a response by industry as a basis, this section pr esents estimates for short term employment needed associated with the monitoring, recordkeeping, and reporting requirements for this proposed rule. Environmental regulation may increase revenue and employment in the environmental

7 It should be noted that if more labor must be used to produce a given amount of output, then this implies a decrease in labor productivity. A decrease in labor productivity wi ll cause a short-run aggregat e supply curve to shift to the left, and businesses will produce le ss, all other things being equal. Deleted: And, in general, if a regulation imposes high costs and does not increase the demand for labor, it may lead to a decrease in employment. Comment [A6]: Realize that this language has been used in other rules, but it does not seem to be correct. It contradicts the highlighted statement above. Moreover, in equilibrium, a decrease in the demand for labor would lead to a decrease in real wages, not an increase in involuntary unemployment. The reduced wages may lead to reduced voluntary employment as people opt for more leisure, but this effect is not what is generally understood to be unemployment. Also, reduced real wages may operate in the other direction, with increased labor participation as people try to maintain a standard of living.

Deleted: ¶5-13 technology industry. While these increases represent gains for that industry, they are costs to the regulated industries required to install the equipmen t. As with any pool of labor, the gross size of the labor pool does not reflect the net impact on overall employment after adjusting for shifts in other sectors. Regulated firms hire workers to design and build pollution controls. Once the equipment is installed, regulated firms hire workers to op erate and maintain the pollution control equipment – much like they hire workers to produce more output. Of course, these firms may also reassign existing employees to do these activities. Environmental regulations also support employment in many basic industries. In addition to the in crease in employment in the pollution control industry (to fill increased orders for pollution co ntrol equipment placed by the regulated sector), environmental regulations also support employment in industries that provide intermediate goods to the pollution control industry. For example, an investment in capital expenditures to reduce air pollution involves the purchase of abatement equipment. The equipment manufacturers, in turn, order steel, tanks, vessels, blowers, pumps, and chemicals to manufacture and install the equipment. A study by Bezdek, Wendling, and DiPernab (2008) found that “investments in environmental protection create jobs and displace jobs, but the net effect on employment is positive.” 8 The majority of the jobs associated with added pollution controls (e.g., boilermakers, general construction workers, etc.) will provid e domestic employment opportunities, but some goods and services demanded and/or provided to the pollution control industry (e.g., steel, cement, etc.) are internationally traded goods. Once the equipment is installed, regulated firm s hire workers to operate and maintain the pollution control equipment – much like they hire workers to produce more output. Morgenstern et al. (2002) examined how regulated industries respond to regulation. The authors found that, on average for the industries they studied, employment increases in regulated firms. Of course, these firms may also reassign existing employees to perform these activities. The focus of this part of the analysis is on labor requirements related to the compliance actions of the affected entities within the aff ected sector. We do not estimate any potential changes in labor outside of the affected sector. It is important to highlight that unlike the typical case where to reduce a bad output (i.e., emissions) a firm often has to reduce production of the good output, many of the emission controls requ ired by the proposed rule will simultaneously increase production of the good output and reduce production of bad outputs. That is, these

8 Environmental protection, the economy, and jobs: National and regional analyses , Roger H. Bezdek, Robert M. Wendling and Paula DiPerna, Journal of Environmental Management Volume 86, Issue 1 , January 2008, Pages 63-79. Comment [A7]: This study is very limited in scope. Suggest including language “A study of the XYZ sector in ABC State in 19XX by Bezdek..” Otherwise it suggests that the results are more representative than they are.5-14 controls jointly produce environmental improvements and increase output in the regulated sector. New labor associated with implementing these controls to comply with the new regulations can also be viewed as additional labor increasing output while reducing undesirable emissions. The employment analysis uses a bottom-up engineering-based methodology to estimate employment impacts. The engineering cost analysis summarized in Section 4 of this RIA includes estimates of the labor requirements associated with implementing the proposed regulations. Each of these labor changes may either be required as part of an initial effort to comply with the new regulation or required as a continuous or annual effort to maintain compliance. We estimate up-front and continual, annual labor requirements by estimating hours of labor required and converting this number to full-time equivalents (FTEs) by dividing by 2,080 (40 hours per week multiplied by 52 weeks) . We note that this type of FTE estimate cannot be used to make assumptions about the specific number of people involved or whether new jobs are created for new employees. The results of this employment estimate are presented in Table 5-5 for the proposed NESHAP. The tables breaks down the installation, operation, and maintenance estimates by type of pollution control evaluated in the RIA and pr esent both the estimated hours required and the conversion of this estimate to FTE. For the proposed NESHAP, reporting and recordkeeping requirements were estimated requirements were estimated for the entire rule rather than by anticipated control requirements; the reporting and recordkeeping estimates are consistent with estimates EPA submitted as part of its Information Collection Request (ICR) that is in the Supporting Statement for the proposed reconsideration rule. The up-front labor requirement is estimated at 182 FTEs for the proposed NESHAP. These up-front FTE labor requirements can be viewed as short-term labor requirements required for affected entities to comply with the new regu lation. Ongoing requirements are estimated at about 357 FTEs for the proposed NESHAP. These ongoing FTE labor requirements can be viewed as sustained labor requirements required for affected entities to continuously comply with the new regulation. All of this data is found in the cost memorandum for this proposed reconsidered rule, and can be found in the docket for the rulemaking. It is important to recognize that these seemingly precise estimates are not to be assumed to be exact measures of the employment impacts of this rulemaking. They represent a rough approximation of the small positive impacts that this rule may have on employment. Comment [A8]: Please elaborate on how this is so.5-15 Table 5-5. Labor-based Employment Estimates for Reporting and Recordkeeping and Installing, Operating, and Maintaining Cont rol Equipment Requirements for Proposed Reconsideration SI RICE NESHAP

Source Emission Control Measure Projected No. of Affected

Units Per-Unit One-Time

Labor Estimate (Hours) Total OneTime Labor

Estimate (Hours) Per-Unit Annual Labor Estimate (Hours) Total Annual Labor Estimate (Hours) One-Time Full-Time Equivalent AnnualFullTime Equival

ent Major Sources

SI RICE <100 HP N/A 70,798 N/A N/A 1 70,798 N/A 34

-O&M/Recordkeeping 2SLB RICE 100-500 HP

N/A 7,398 N/A N/A N/A

92,480 N/A 34

-O&M/Recordkeeping 1 -Testing 8 -Reporting 3.5 Emergency 4SRB SI RICE 100-500 HP N/A 1,597 N/A N/A 1 1,597 N/A 0.77 Non-Emergency 4SRB SI RICE 100-500 HP N/A 12,740 N/A N/A N/A 146,515 N/A 70 -Testing 8 -Reporting 3.5 4SLB SI RICE 100-500 HP Oxidation Catalyst 14,257 21 300,255 15 163,956 144 34 -Testing 8 -Reporting 3.5

Area Sources

All SI RICE N/A 228,318 N/A N/A 1 228,318 N/A 110

-O&M/Recordkeeping Non-Emergency 4SLB SI RICE >500 HP in Populated Areas Oxidation Catalyst 768 37 28,117 15 15,734 14 7.56 -Testing 2 -Reporting 3.5 Non-Emergency 4SRB SI RICE >500 HP in Populated Areas NSCR 578 86 49,918 33 22,236 24 10.69 -Testing 2 -Reporting 3.5 Total 144 378,290 113 741,633 182 357

Note : Full-time equivalents (FTE) are estimated by first mult iplying the projected number of affected units by the per unit labor requirements and then dividing by 2,080 (40 hours multiplied by 52 weeks). Totals may not sum due to independent rounding. HP = horsepower N/A = Not Applicable. O&M = Operating and Maintenance5-16 5.7.2 Employment Impacts within the Regulated Industry

In recent RIAs we have applied estimates from a study by Morgenstern, Pizer and Shih (2002) 1 to derive the employment effects of new regulations within the regulated industry. (See, for example, the Regulatory Impact Analyses for the recent final MATS and final CSAPR regulations). Determining th e direction of employment effects in the regulated industry is also challenging due to competing effects. Complying with the new or more stringent regulation requires additio nal inputs, including labor, and may alter the relative proportions of labor and capital us ed by regulated firms in their production processes. Morgenstern, et al. (2002) demonstrate that environmental regulations can be understood as requiring regulated firms to add a new output (environmental quality) to their product mixes. Although legally compe lled to satisfy this new demand, regulated firms have to finance this additional productio n with the proceeds of sales of their other (market) products. Satisfying this new demand requires additional inputs, including labor, and may alter the relative proportions of labor and capital used by regulated firms in their production processes.

More specifically, Morgenstern, Pizer, and Shih (2002) decompose the effect of regulation on net employment in the regulated sector into the following three subcomponents:

 The Demand Effect : higher production costs from complying with the regulation will raise market prices, reducing consumption (and production), thereby reducing demand for labor within the regulated industry. The “extent of this effect depends on the cost increase passed on to consumers as well as the demand elasticity of industry output.” (p. 416)

 The Cost Effect : Assuming that the capital/labor ratio in the production process is held fixed, as “production costs rise, more inputs, including labor, are used to produce the same amount of output,” (p. 416). For example, to reduce pollutant emissions while holding output levels constant, regula ted firms may require additional labor.

1 Morgenstern, R. D., W. A. Pizer, and J. S. Shih. 2002. Jobs versus the Environment: An Industry-Level Perspective. ‖ Journal of Environmental Economics and Management 43(3):412-436.5-17  The Factor-Shift Effect : Regulated firms’ production technologies may be more or less labor intensive after complying with the regulation (i.e., more/less labor is required relative to capital per dollar of output). “Environmental activities may be more labor intensive than conventional production,” meaning that “the amount of labor per dollar of output will rise.” Howe ver, activities may, instead, be less labor intensive because “cleaner operations could involve automation and less employment, for example.” (p. 416) The demand effect is expected to have an unambiguously negative effect on employment, the cost effect to have an unambiguously pos itive effect on employment, and the factor-shift effect to have an ambiguous effect on employment. Without more information with respect to the magnitudes of these three competing effect s, it is not possible to predict the net environmental employment effect in the regulated sector. Using plant-level Census information between the years 1979 and 1991, Morgenstern et al. estimate the effects of pollution abatement expenditures on net employment in four highly polluting/regulated sectors (pulp and paper, plastics, steel, and petroleum refining). They conclude that increased abatement expenditures generally have not caused a significant change in net employment in those sectors. More specifically, their results show that, on average across the industries studied, each additional $1 million (in 1987$) spent on po llution abatement results in a (statistically insignificant) net increase of 1.55 (+/- 2.24) jobs. As a result, the authors conclude that increases in pollution abatement expenditure s can have positive effects on employment and do not necessarily cause economically significant employment changes. The conclusion is similar to Berman and Bui (2001), who found that increased air quality regulation in Los Angeles did not cause large employment changes. Ideally, the EPA would first apply the methodology of Morgenstern et al. to current pollution expenditure and market data for the regula ted firms to identify the relationship between abatement costs and employment, then use this relationship to extrapolate the effect of new projected abatement costs on these firms. Unfort unately, current firm-level abatement cost and market characteristics are not available. In addition, there are important differences in the markets and regulatory settings analyzed in their study and the setting presented here that lead us to conclude that it is inappropriate to utili ze their quantitative estimates to estimate the employment impacts from this reconsideration proposal. The differences between the underlying regulations motivating the abatement expenditures studied in Morgenstern et al. are potentially too many to allow for the direct transfer of thei r quantitative estimates for use in analysis of the proposed rule. There are also important differences between the industries affected by this5-18 proposed rule and the four manufacturing industries studied by Morgenstern et al. For these reasons, we conclude there are too many uncertainties as to the comparability of the Morgenstern et al. study to apply their estimates to quantif y the employment impacts within the regulated sector for this proposed regulation.6-1 Section 6 SMALL ENTITY SCREENING ANALYSIS The Regulatory Flexibility Act as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small governmental juri sdictions, and small not-for-profit enterprises. After considering the economic impact of the proposed rule on small entities, the screening analysis indicates that this proposed rule will not have a significant economic impact on a substantial number of small entities (or “SISNOSE”). Under the analyses EPA considered, sales and revenue tests for establishments owned by model small entities are less than 1% except electric power generation (NAICS 2211 with recei pts less than $100,000 per year) and crop and animal production (NAICS 111 and 112 with receipts less than $25,000 per year). These findings are similar to those for the final SI RI CE rule promulgated in August 2010, though the impacts are lower due to the reduction in the cost estimates for these industries. 6.1 Small Entity Data Set The industry sectors covered by the proposed rule were identified during the development of the cost analysis (EC/R, 2012). The Statistics of United States Business (SUSB) provides national information on the distribution of econo mic variables by industry and enterprise size (U.S. Census, 2012a, b). 1 The Census Bureau and the Office of Advocacy of the SBA supported and developed these files for use in a broad range of economic analyses. 2 Statistics include the total number of establishments and receipts for al l entities in an industry; however, many of these entities may not necessarily be covered by the proposed rule. SUSB also provides statistics by enterprise employment and receipt size.

The Census Bureau’s definitions used in the SUSB are as follows:

 Establishmen t: An establishment is a single physical location where business is conducted or where services or industrial operations are performed.

1 The SUSB data do not provide establishment information fo r the national security NAICS code (92811) or irrigated farms. Since most national security installations are owne d by the federal government (e.g., military bases), EPA assumes these entities would not be considered small. For irrigated farms, we relied on receipt data provided in the 2008 Farm and Irrigati on Survey (USDA, 2009). 2 See http://www.census.gov/csd/susb/ and http://www.sba. gov/advo/research/data.html for additional details.6-2  Receipts : Receipts (net of taxes) are defined as the revenue for goods produced, distributed, or services provided, including revenue earned from premiums, commissions and fees, rents, interest, divi dends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes.

 Enterprise : An enterprise is a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multiestablishment company forms one enterprise—the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments. Because the SBA’s business size definitions (SBA, 2010) apply to an establishment’s “ultimate parent company,” we assumed in this anal ysis that the “enterprise” definition above is consistent with the concept of ultimate parent company that is typically used for SBREFA screening analyses and the terms are used interchangeably. 6.2 Small Entity Economic Impact Measures The analysis generated a set of establishment sales tests (represented as cost-to-receipt ratios) 3 for NAICS codes associated with sectors listed in Table 6-1. Although the appropriate SBA size definition should be applied at the pare nt company (enterprise) level, we can only compute and compare ratios for a model establishment owned by an enterprise within an SUSB size range (employment or receipts). Using the SUSB size range helps us account for receipt differences between establishments owned by large and small enterprises and also allows us to consider the variation in small business de finitions across affected industries. Using establishment receipts is also a conservative approach, because an establishment’s parent company (the “enterprise”) may have other economic resources that could be used to cover the costs of the final rule. 6.2.1 Model Establishment Receipts and Annual Compliance Costs The sales test compares a representative establishment’s total annual engine costs to the average establishment receipts for enterprises in several size categories. 4 For industries with SBA

3 The following metrics for other small entity economic impa ct measures (if applicable) would potentially include

• small governments (if applicable): “revenue” test; a nnualized compliance cost as a percentage of annual government revenues and

• small nonprofits (if applicable): “expenditure” test; a nnualized compliance cost as a percentage of annual operating expenses, 4 For the 1 to 20 employee category, we excluded SUSB data for enterprises with zero employees. These enterprises did not operate the entire year.6-3 employment size standards, we calculated average establishment receipts for each enterprise employment range (Table 6-2). 5 For industries with SBA receipt size standards, we calculated Table 6-1. SI NESHAP for Existing Statio nary Reciprocating Internal Combustion Engines (RICE): Affected Sectors and SBA Small Business Size Standards

Industry Description Corresponding NAICS SBA Size Standard for Businesses (November 5nd, 2010) Type of Small Entity Electric Power Generation 2211 a Business and government Natural Gas Transmission 48621 $7.0 mi llion in annual receipts Business Crude Petroleum & NG Production 211111 500 employees Business Natural Gas Liquid Producers 211112 500 employees Business National Security 9 2811 NA Government Hydro Power Units See NAICS 2211 1,000 employees Business and government Irrigation Sets Affects NAICS 111 and 112 Generally $750,000 or less in annual receipts Business

Welders Affects industries that use heavy equipment such as construction,

mining, farming Varies by 6-digit NAICS code; Business Example industry: NAICS 238 = $14 million in annual receipts

a NAICS codes 221111, 221112, 221113, 221119, 221121, 221122: A firm is small if, including its affiliates, it is

primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours. Source: U.S. Small Business Administration (SBA). 2010. “Table of Sma ll Business Size Standards Matched to North American Industry Classification System Codes.” Effective November 5nd, 2010. Downloaded 2/16/12.

average establishment receipts for each enterprise receipt range (Table 6-3). We included the utility sector in the second group , although the SBA size standard fo r this industry is defined in terms of physical units (megawatt hours) versus receipts. Crop and animal production (NAICS 111 and 112) also have an SBA receipt size stan dard that defines a small business as receiving $750,000 or less in receipts per year. However, SUSB data were not available for these industries. Therefore, we conducted the sales te st using the following range of establishment receipts: farms with annual receipts of $25,000 or less, farms with annual receipts of $100,000 or less, farms with annual receipts of $500,000 or less, and farms with annual receipts of $750,000 or less.

5 2007 Economic Census data are at http://www.census.gov/econ/census07/.

### 6-4Table 6-2. Average Receipts for Affected Industry by Enterprise: 2009 ($2009 Million/Establishment)SBA SizeStandardfor Businesses(effectiveNovember 5,2010)Owned By Enterprises with Employee Range:NAICS NAICS DescriptionAllEnterprises1–20Employees20–99Employees100–499Employees500+Employees211111 Crude petroleum &natural gas extraction500 employees $30.22 $2.15 $33.02 $151,76 1,570211112 Natural gas liquidextraction500 employees $172.81 $0.30 NA $11.88 NA335312 Motor & generator mfg 1,000 employees $18.58 $1.37 $6.14 $15.96 $29.47333992 Welding & solderingequipment mfg500 employees $18.51 $1.56 $6.60 $33.25 NASource: U.S. Census Bureau. 2012a. “Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail Employment Sizes: 2009.”<http://www.census.gov/csd/susb/ Downloaded 2/22/12.NA = Not available.

### 6-5Table 6-3. Average Receipts for Affected Industry byEnterprise Receipt Range:2007 ($2008 /establishment)SBA Size Standardfor Businesses(effective November5, 2010)Owned By Enterprises with Receipt Range:NAICS NAICS DescriptionAllEnterprises0–99KReceipts100–499.9KReceipts500–999.9KReceipts1,000–4,999.9KReceipts5,000,000–9,999,999KReceipts<10,000KReceipts10,000–49,999KReceipts50,000–99,999KReceipts100,000K+Receipts2211 Electric PowerGenerationa$261.0 $31.2 $272.5 $724.9 $2,399.5 $7,330.5 $2,617.7 $24,786.9$67,706.8$1,394,051.0622110 Hospitals$34.5 million in annualreceipts$202,058.7 NA $23.82 NA $3,255.0 $7,291.0 $4,692.1$23,481.9$67,545,6$508,705.8237310Highway , street, andbride construction$33.5 million inAnnual Receipts$7.74$0.06$0.32$0.84$2.74$8.11$2.00$22.62$56.48$56.81237110Water and sewer lineand related structures,construction$33.5 million inAnnual Receipts$3.89$0.06$0.32$0.85$2.73$8.17$1.84$20.62$45.05$47.27237130Powerandcommunicationline and relatedstructures construction$33.5 million inAnnual Receipts$3.39$0.06$0.31$0.83$2.52$7.75$1.32$16.84$34.50$23.86237990zOther heavy andcivil engineeringconstruction$33.5 million inAnnual Receipts$2.66$0.06$0.30$0.83$2.48$7.76$0.99$18.72$40.53$42.3592811 National Security NA NA NA NA NA NA NA NA NA NA NANotes: Note: Industries in green were included for consistency with the analysis done for finalrule. National Security is included in this table but does not havesize standards.aNAICS codes 221111, 221112, 221113, 221119, 221121, 221122: A firm in these industries is defined as small by SBA if, including its affiliates, it isprimarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did notexceed 4 million megawatt hours.NA = Not available. SUSB did not report thisdata for disclosure or other reasons.Source: U.S. Census Bureau. 2009a. “Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail Employment Sizes: 2009.”<http://www.census.gov/csd/susb/6-6 Annual entity compliance costs vary depending on the size of the SI engines used at the affected establishment. Absent facility-specific information, we computed per-entity compliance costs based for three different cases based on representative establishments—Cases 1, 2, and 3 (see Table 6-4). Each representative establishment differs based on the size and number of SI engines being used. Compliance costs are calculated by summing the total annualized compliance costs for the relevant engine categor ies, dividing the sum by the total existing population of those engines, and multiplying the average engine cost by the number of engines assumed to be at the establishment. Since NAICS 2211 and 48621 are fundamentally different than other industries considered in this analysis due to the number of engines affected and amount of cost incurred resulting from this proposed rule, we used different assumptions about what constitutes the representative establishmen t and report these assumptions separately.

 Case 1: The representative establishment for all industries uses three 750+ hp engines with an average compliance cost of $680 to $730 per engine, resulting in a total annualized compliance cost of approximately $2,040 to $2,200 for this representative establishment.

 Case 2: The representative establishment in NACIS 2211 and 48621 uses two 25 to 750+ hp engines with an average compliance cost of $412 per engine, resulting in a total annualized compliance cost of $824 for this representative establishment. For all other industries, the representative establishm ent uses two 25 to 300 hp engines with an average compliance cost of $246 per engine, resulting in a total compliance cost of $492 for this representative establishment.

 Case 3: The representative establishment for all industries uses two 50 to 100 hp engines with an average compliance cost of $73 per engine, resulting in a total compliance cost of $145 for this representative establishment. EPA believes that small entities are most likely to face costs similar to Case 2 (columns shaded in gray in Table 6-4) because most of the engines to be affected by this proposed rule in NAICS 335312, 333992, 211111, and 211112 are under 300 hp capacity, and most small entities in these industries will own engines of this size or smaller. This is corroborated by Figure 6-1 and 6-2 which shows the distribution of engine population and compliance costs by engine size for all industries. However, it is difficult to make a similar claim for NAICS 2211 and 48621 based on the existing distribution of engines in these industries. 6

6 This claim also cannot be made for NAICS 92811: Natio nal Security. However, since most national security installations are owned by the federal government (e.g., military bases), EPA assumes these entities would not be considered small.6-7 For the sales test, we divided the represen tative establishment compliance costs reported in Table 6-4 by the representative establishment receipts reported in Tables 6-2 and 6-3. This is known as the cost-to-receipt (i.e., sales) ratio, or the “sales test.” The “sales test” is the impact Table 6-4. Representative Establishment Costs Used for Small Entity Analysis ($2009)

Case 1 Case 2 Case 3

NAICS 2211, 48621

(+750 hp

only) All Other NAICS (+750 hp

only) NAICS 2211,48621

(25-750+

hp) All Other NAICS (25–300

hp) NAICS 2211, 48621 (25–100 hp only) All Other NAICS (25–100 hp only) Total Annualized Costs ($) $7,710,388 $586,434 $82,806,141 $28,057,798 $8,510,985 $6,174,805 Engine Population 10,548 863 200,974 114,517 117,040 84,913 Average Engine Cost ($/engine) $731 $680 $412 $246 $73 $73 Assumed Engines Per Establishment 3 3 2 2 2 2 Total Annualized Costs per Establishment $2,193 $2,040 $824 $492 $145 $1456-8 Figure 6-1. Distribution of Engine Po pulation by Size for All Industries 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Electric Power Generation

(2211) Natural Gas Transmission

(48621) Crude Petroleum & NG Production

(211111) Natural Gas Liquid Producers

(211112) National Security (92811) Hydro Power Units (335312) Irrigation Sets (335312) Welders (333992) >750 hp 600

‐ 750 hp 500

‐ 600 hp 300

‐ 500 hp 175

‐ 300 hp 100

‐ 175 hp 50

‐ 100 hp 25

‐ 50 hp6-9 Figure 6-2. Distribution of Compliance Co sts by Engine Size for All Industries

methodology EPA employs in analyzing small entity impacts as opposed to a “profits test,” in which annualized compliance costs are calculated as a share of profits. This is because revenues or sales data are commonly available data for entities normally impacted by EPA regulations and profits data normally made available are often not the true profit earned by firms because of accounting and tax considerations. Revenues as typically published are usually correct figures and are more reliably reported when compared to profit data. The use of a “sales test” for estimating small business impacts for a rulemaking such as this one is consistent with guidance offe red by EPA on compliance with SBREFA 7 and is consistent with guidance published by the U.S. SBA’s Office of Advocacy that suggests that cost as a percentage of total revenues is a metric for evaluating cost increases on small entities in relation to increases on large entities. 8

7 The SBREFA compliance guidance to EPA ru lewriters regarding the types of small business analysis that should be considered can be found at http://www.epa.gov/sbre fa/documents/rfafinalguidance06.pdf, pp. 24-25. 8 U.S. SBA, Office of Advocacy. A Guide for Governme nt Agencies, How to Comply with the Regulatory Flexibility Act, Implementing the President’s Small Business Agenda and Executive Order 13272, May 2003. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Electric Power Generation

(2211) Natural Gas Transmission

(48621) Crude Petroleum & NG Production

(211111) Natural Gas Liquid Producers

(211112) National Security (92811) Hydro Power Units (335312) Irrigation Sets (335312) Welders (333992) >750 hp 600

‐ 750 hp 500

‐ 600 hp 300

‐ 500 hp 175

‐ 300 hp 100

‐ 175 hp 50

‐ 100 hp 25

‐ 50 hp6-10 If the cost-to-receipt ratio is less than 1%, then we consider the proposed rule to not have a significant impact on the establishment comp any in question. We summarize the industries with cost-to-receipt ratios exceeding 1% below: Primary Analysis:

 Case 2 : NAICS 2211 with receipts less than $100,000 per year and NAICS 111 and 112 with receipts less than $25,000 per year

 Case 3 : No industries Sensitivity Analysis (unlikely):

 Case 1 : NAICS 2211 with receipts less than $100,000 per year In the Case 2 primary analysis, only establishments in NAICS 2211 with receipts less than $100,000 per year (less than 5 percent of the total), and establishments in NAICS 111 and 112 with receipts less than $25,000 per year (around 30 percent of the total) have cost-to-receipt ratios above 1%. However, establishments earning this level of receipts are likely to be using smaller engines than those assumed in Case 2, such as 25 to 300 hp engines. The results of our Case 3 analysis demonstrate that these establishm ents are not significantly impacted when taking this engine size into account. After considering the economic impacts of this proposed rule on small entities, we certify that this action will not have a significant economic impact on a substantial number of small entities. This certification is based on the economi c impact of this proposal action to all affected small entities across all industries affected. The percentage of small entities impacted by this proposal having annualized costs greater than 1 percent of sales is less than 2 percent according to this analysis. We thus conclude that there is no significant economic impact on a substantial number of small entities (SISNO SE) for this proposed rule. Although the proposed rule would not have a significant economic impact on a substantial number of small entities, EPA nonetheless tried to reduce the impact of the rule on small entities. When developing the revised standa rds, EPA took special steps to ensure that the burdens imposed on small entities were minimal. EPA conducted several meetings with industry trade associations to discuss regulatory options and the corresponding burden on industry, such as recordkeeping and reporting. In addition, as mentioned earlier in this preamble, EPA proposes to reduce regulatory requirements for a variety of area sources affected under this RICE rule with amendments to the final RICE rules promulgated in 2010. We continue to be interested in the6-11 potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

6.3 Small Government Entities The rule also covers sectors that include entities owned by small and large governments. However, given the uncertainty and data li mitations associated with identifying and appropriately classifying these entities, we co mputed a “revenue” test for a model small government, where the annualized compliance cost is a percentage of annual government revenues (U.S. Census, 2005a, b). The use of a “revenue test” for estimating impacts to small governments for a rulemaking such as this one is consistent with guidance offered by EPA on compliance with SBREFA, 9 and is consistent with guidance published by the US SBA’s Office of Advocacy. 10 For example, from the 2007 Census (in 2008 dollars), the average revenue for small governments (counties and municipalities) with populations fewer than 10,000 is $4 million per entity, and the average revenue for local governments with populations fewer than 50,000 is $9 million per entity (U.S. Census Bureau, 2009a; U.S. Census Bureau, 2009b). For the smallest group of local governments (<10,000 people), the cost-to-revenue ratio would be 0.2%or less under each case. For the larger group of governments (<50,000 people), the cost-torevenue ratio is 0.1% or less under all cases.

9 The SBREFA compliance guidance to EPA rule writers rega rding the types of small business analysis that should be considered can be found at http://www.epa.gov/sbrefa/docum ents/rfafinalguidance06.pdf , pp. 24-25. 10 U.S. SBA, Office of Advocacy. A Guide for Governme nt Agencies, How to Comply with the Regulatory Flexibility Act, Implementing the President’s Small Business Agenda and Executive Order 13272, May 2003.7-1 Section 7 HUMAN HEALTH BENEFITS OF EMISSIONS REDUCTIONS

Synopsis

Implementation of emissions controls required by the proposed SI RICE NESHAP reconsideration is expected to reduce emissions of hazardous air pollutants (HAP) and have ancillary co-benefits that would lower ambient concentrations of NO 2 , PM 2.5 and ozone. In this section, we quantify the monetized co-benefits for th is rule associated with reducing exposure to ambient fine particulate matter (PM 2.5 ) by reducing emissions of precursors. We estimate the total monetized co-benefits to be $62 million to $150 million at a 3% discount rate and $55 million to $140 million at a 7% discount rate in 2013. All estimates are in 2010$. These estimates reflect the monetized human health benefits of reducing cases of morbidity and premature mortality among populations exposed to PM 2.5 reduced by this rule. These estimates reflect EPA’s most current interpretation of the scientific literature. Higher or lower estimates of benefits are possible using other assumptions; examples of this are provided in Figure 7-2. Data, resource, and methodological limitations prevented EPA from monetizing the benefits from several important benefit categories, including benefits from reducing exposure to HAP, carbon monoxide, NO 2 and ozone, as well as ecosystem effects and visibility impairment. In addition to reducing emissions of PM precursors such as NOx, this rule would reduce 1,800 tons of HAP and 22,000 tons of carbon monoxide each year. 7.1 Calculation of PM 2.5 -Related Human Health Co-Benefits

This proposed reconsideration NESHAP would reduce emissions of NO X , and VOCs. Because these emissions are precursors to PM 2.5, reducing these emissions would also reduce PM 2.5 formation, human exposure and the incidence of PM 2.5 -related health effects. Due to analytical limitations, it was not possible to provide a comprehensive estimate of PM 2.5 -related benefits or provide estimates of the health bene fits associated with exposure to HAP, CO, NO 2 or ozone. Instead, we used the “benefit-per-ton” approach to estimate these benefits. The methodology employed in this analysis is simila r to the work described in Fann, Fulcher, and Hubbell (2009), but represents an improvement that EPA believes would provide more reliable estimates of PM 2.5 -related health benefits for emissions reductions in specific sectors. The key assumptions are described in detail below. These PM 2.5 benefit-per-ton estimates provide the total monetized human health benefits (the sum of premature mortality and premature morbidity) Comment [A9]: Don’t these changes increase emissions relative to 2010 rule?7-2 of reducing one ton of PM 2.5 from a specified source. EPA has used the benefit per-ton technique in several previous RIAs, including the recent SO 2 NAAQS RIA (U.S. EPA, 2010).

The Integrated Science Assessment (ISA) for Particulate Matter (U.S. EPA, 2009b) identified the human health effects associated with ambient PM 2.5, which include premature morality and a variety of morbidity effects associated with acute and chronic exposures. Table 7- 1 shows the quantified and unquantified benefits captured in those benefit-per-ton estimates, but this table does not include entries for the unquantif ied health effects associated with exposure to ozone and NO 2 nor welfare effects such as ecosystem e ffects and visibility impairment that are described in section 7.2. It is important to emphasize that the list of unquantified benefit categories is not exhaustive, nor is quantification of each effect complete.7-3 Table 7-1: Human Health Effects of PM 2.5

Category Specific Effect Effect Has Been Quantified Effect Has Been Monetized More Information

(refers to CSAPR RIA) Improved Human Health Reduced incidence of premature mortality from exposure to PM 2.5 Adult premature mortality based on cohort study estimates and expert elicitation estimates (age >25 or age >30)   Section 5.4 Infant mortality (age <1)   Section 5.4

Reduced incidence of morbidity from exposure to PM 2.5 Non-fatal heart attacks (age > 18)   Section 5.4 Hospital admissions—respiratory (all ages)   Section 5.4 Hospital admissions—cardiovascular (age >20)   Section 5.4 Emergency room visits for asthma (all ages)   Section 5.4 Acute bronchitis (age 8-12)   Section 5.4 Lower respiratory symptoms (age 7-14)   Section 5.4 Upper respiratory symptoms (asthmatics age 9-11)   Section 5.4 Asthma exacerbation (asthmatics age 6- 18)   Section 5.4 Lost work days (age 18-65)   Section 5.4 Minor restricted-activity days (age 18-65)   Section 5.4 Chronic Bronchitis (age >26)   Section 5.4 Emergency room visits for cardiovascular effects (all ages) -- -- Section 5.4 Strokes and cerebrovasc ular disease (age 50-79) -- -- Section 5.4 Other cardiovascular effects (e.g., other ages) -- -- PM ISA 2 Other respiratory effects (e.g., pulmonaryfunction, non-asthma ER visits, nonbronchitis chronic diseases, other ages and populations) -- -- PM ISA 2

Reproductive and developmental effects (e.g., low birth weight, pre-term births, etc) -- -- PM ISA 2,3 Cancer, mutagenicity, and genotoxicity effects -- -- PM ISA 2,3

1 We assess these benefits qualitatively due to time and resource limitations for this analysis. 2 We assess these benefits qualitatively because we do not have sufficient confidence in available data or methods. 3 We assess these benefits qualitatively because current ev idence is only suggestive of causality or there are other significant concerns over the strength of the association.

Consistent with the Portland Cement NESHAP (U.S. EPA, 2009a), the benefits estimates utilize the concentration-response functions as reported in the epidemiology literature, as well as the 12 functions obtained in EPA’s expert elicitation study as a sensitivity analysis.7-4  One estimate is based on the concentration-response (C-R) function developed from the extended analysis of American Cancer Society (ACS) cohort, as reported in Pope et al. (2002), a study that EPA has previously used to generate its primary benefits estimate. When calculating the estimate , EPA applied the effect coefficient as reported in the study without an adjustment for assumed concentration threshold of 10 μg/m 3 as was done in recent (2006-2009) Office of Air and Radiation RIAs.

 One estimate is based on the C-R function developed from the extended analysis of the Harvard Six Cities cohort, as reported by Laden et al (2006). This study, published after the completion of the Staff Paper for the 2006 PM 2.5 NAAQS, has been used as an alternative estimate in the PM 2.5 NAAQS RIA and PM 2.5 benefits estimates in RIAs completed since the PM 2.5 NAAQS. When calculating the estimate, EPA applied the effect coefficient as reported in the study without an adjustment for assumed concentration threshold of 10 μg/m 3 as was done in recent (2006-2009) RIAs.

 Twelve estimates are based on the C-R functions from EPA’s expert elicitation study (Roman et al., 2008) on the PM 2.5 -mortality relationship and interpreted for benefits analysis in EPA’s final RIA for the PM 2.5 NAAQS. For that study, twelve experts (labeled A through L) provided independent estimates of the PM 2.5 -mortality concentration-response function. EPA pr actice has been to develop independent estimates of PM 2.5 -mortality estimates corresponding to the concentration-response function provided by each of the twelve experts, to better characterize the degree of variability in the expert responses.

The effect coefficients are drawn from epidemiology studies examining two large population cohorts: the American Cancer Society cohort (Pope et al., 2002) and the Harvard Six Cities cohort (Laden et al., 2006). 1 These are logical choices for anchor points in our presentation because, while both studies are well designed and peer reviewed, there are strengths and weaknesses inherent in each, which we believe argues for using both studies to generate benefits estimates. Previously, EPA had calculated benefits based on these two empirical studies, but derived the range of benefits, including the minimum and maximum results, from an expert elicitation of the rela tionship between exposure to PM 2.5 and premature mortality (Roman

1 These two studies specify multi-pollutant models that control for SO 2 , among other co-pollutants.7-5 et al., 2008). 2 Within this assessment, we include the benefits estimates derived from the concentration-response function provided by each of the twelve experts to better characterize the uncertainty in the concentration-response function for mortality and the degree of variability in the expert responses. Because the experts used these cohort studies to inform their concentration-response functions, benefits estima tes using these functions generally fall between results using these epidemiology studies (see Figure 7-2). In general, the expert elicitation results support the conclusion that the benefits of PM 2.5 control are very likely to be substantial.

Readers interested in reviewing the general methodology for creating the benefit-per-ton estimates used in this analysis should consu lt the draft Technical Support Document (TSD) on estimating the benefits per ton of reducing PM 2.5 and its precursors from in the “Other Non-EGU Point” sector(U.S. EPA, 2012). 3 The primary difference between the estimates used in this analysis and the estimates reported in Fann, Fulcher, and Hubbell (2009) is the air quality modeling data utilized. In this analysis, we apply these national benefit-per-ton estimates calculated for this category for NOx and multip ly them by the corresponding emission reductions.

These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. NOx is the primary PM 2.5 precursors affected by this rule. Even though we assume that all fine particles have equivalent health effects, the benefit-per-ton estimates vary between precursors depending on the location and magnitude of their impact on PM 2.5 levels, which drive population exposure. The sector-specific modeling does not provide estimates of the PM 2.5 -related benefits associated with reducing VOC emissions, but these unquantified benefits are generally small compared to other PM 2.5 precursors (U.S. EPA, 2012). The benefit-per-ton coefficients in this analysis were derived using modified versions of the health impact functions used in the PM NAAQS Regulatory Impact Analysis (U.S. EPA, 2006). Specifically, this analysis uses the method first applied in the Portland Cement NESHAP RIA (U.S. EPA, 2009a), which applied the functions directly from the epidemiology studies

2 Please see the Section 5.2 of the Portland Cement RIA in Appendix 5A for more information regarding the change in the presentation of benefits estimates. 3 Stationary engines are included in the other non-EGU point source category. If the affected stationary engines are more rural than the average of the non-EGU sources modeled, then it is possible that the benefits may be somewhat less than we have estimated here. The TSD provides the geographic distribution of the air quality changes associated with this sector. It is important to emphasize that this modeling represents the best available information on the air quality impact on a per ton basis for these sources.7-6 without an adjustment for an assumed threshold. Removing the threshold assumption is a key difference between the method used in this analysis of PM benefits and the methods used in RIAs prior to Portland Cement proposal, and we now calculate incremental benefits down to the lowest modeled PM 2.5 air quality levels. 4

Based on our review of the current body of scientific literature, EPA now estimates PMrelated mortality without applying an assumed concentration threshold. EPA’s Integrated Science Assessment for Particulate Matter (U.S. EPA, 2009b), which was reviewed by EPA’s Clean Air Scientific Advisory Committee (U.S . EPA-SAB, 2009a; U.S. EPA-SAB, 2009b), concluded that the scientific literature consiste ntly finds that a no-threshold log-linear model most adequately portrays the PM-mortality concentration-response relationship while recognizing potential uncertainty about the exact shape of the concentration-response function. Consistent with this finding, we have conformed the previous threshold sensitivity analysis to the current state of the PM science by incorporating a “Lowest Measured Level” (LML) assessment, which is a method EPA has employed in several recent RIAs including the Cross-State Air Pollution Rule (U.S. EPA, 2011b). This information allows readers to determine the portion of population exposed to annual mean PM 2.5 levels at or above the LML of each study; in general, our confidence in the estimated PM mortality decreases as we consider air quality levels further below the LML in major coho rt studies that estimate PM-related mortality. While an LML assessment provides some insight in to the level of uncertainty in the estimatedPM mortality benefits, EPA does not view the LML as a threshold and continues to quantify PMrelated mortality impacts using a full range of mode led air quality concentrations. It is important to emphasize that we have high confidence in PM 2.5 -related effects down to the lowest LML of the major cohort studies, which is 5.8 μg/m 3 . Just because we have greater confidence in the benefits above the LML, this does not mean that we have no confidence that benefits occur below the LML. For a summary of the scientific review statements regarding the lack of a threshold in the PM 2.5 -mortality relationship, see the T echnical Support Document (TSD) entitled Summary of Expert Opinions on the Existe nce of a Threshold in the ConcentrationResponse Function for PM 2.5 -related Mortality (U.S. EPA, 2010b). For this analysis, policy-specific air quality data is not available due to time or resource limitations. For these rules, we are unable to estimate the percentage of premature mortality associated with this specific rule ’s emission reductions at each PM 2.5 level. However, we believe that it is still important to characterize the distri bution of exposure to baseline air quality levels.

4 Additional updates since the Cement RIA include a revised VSL and updated baseline incidence rates.7-7 As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the source apportionmen t modeling used to calculate the benefit-per-ton estimates for this sector. It is im portant to note that baseline exposure is only one parameter in the health impact function, alon g with baseline incidence rates population, and change in air quality. In other words, the percentage of the population exposed to air pollution below the LML is not the same as the percentage of the population experiencing health impacts as a result of a specific emission reduction policy. The most important aspect, which we are unable to quantify for rules without rule-specific air quality modeling, is the shift in exposure associated with this specific rule. Therefore, caution is warranted when interpreting the LML assessment for this rule. The results of this analysis are provided in Section 7.3. As is the nature of RIAs, the assumptions and methods used to estimate air quality benefits evolve over time to reflect the Agency’s most current interpretation of the scientific and economic literature. For a period of time (2004-2008), the Office of Air and Radiation (OAR) valued mortality risk reductions using a value of statistical life (VSL) estimate derived from a limited analysis of some of the available studi es. OAR arrived at a VSL using a range of $1 million to $10 million (2000$) consistent with tw o meta-analyses of the wage-risk literature. The $1 million value represented the lower end of the interquartile range from the Mrozek and Taylor (2002) meta-analysis of 33 studies. The $10 million value represented the upper end of the interquartile range from the Viscusi and Aldy (2003) meta-analysis of 43 studies. The mean estimate of $5.5 million (2000$) 5 was also consistent with the mean VSL of $5.4 million estimated in the Kochi et al. (2006) meta-analy sis. However, the Agency neither changed its official guidance on the use of VSL in rulemakings nor subjected the interim estimate to a scientific peer-review process through the Scie nce Advisory Board (SAB) or other peer-review group. During this time, the Agency continued work to update its guidance on valuing mortality risk reductions, including commissioning a repo rt from meta-analytic experts to evaluate methodological questions raised by EPA and the SAB on combining estimates from the various data sources. In addition, the Agency consulted several times with the Science Advisory Board Environmental Economics Advisory Committee (SAB-EEAC) on the issue. With input from the meta-analytic experts, the SAB-EEAC advised the Agency to update its guidance using specific, appropriate meta-analytic techniques to combine estimates from unique data sources and

5 After adjusting the VSL for a different currency year (2010$) and to account for income growth to 2015 of the $5.5

million value, the VSL is $8.0 million.7-8 different studies, including those using differe nt methodologies (i.e., wage-risk and stated preference) (U.S. EPA-SAB, 2007).

Until updated guidance is available, the Agency determined that a single, peer-reviewed estimate applied consistently best reflects the SAB-EEAC advice it has received. Therefore, the Agency has decided to apply the VSL that was vetted and endorsed by the SAB in the Guidelines for Preparing Economic Analyses (U.S. EPA, 2000) 6 while the Agency continues its efforts to update its guidance on this issue. This approach calculates a mean value across VSL estimates derived from 26 labor market and contingent valuation studies published between 1974 and 1991. The mean VSL across thes e studies is $6.3 million (2000$). 7 The Agency is committed to using scientifically sound, appropriately reviewed evidence in valuing mortality risk reductions and has made significant progress in responding to the SAB-EEAC’s specific recommendations.

In implementing these rules, emission controls may lead to reductions in ambient PM 2.5 below the National Ambient Air Quality Standards (NAAQS) for PM in some areas and assist other areas with attaining the PM NAAQS. Be cause the PM NAAQS RIAs also calculate PM benefits, there are important differences worth noting in the design and analytical objectives of each RIA. The NAAQS RIAs illustrate the potential costs and benefits of attaining a new air quality standard nationwide based on an array of emission control strategies for different sources. In short, NAAQS RIAs hypothesize, but do not pr edict, the control strategies that States may choose to enact when implementing a NAAQS. Th e setting of a NAAQS does not directly result in costs or benefits, and as such, the NAAQS RIAs are merely illustrative and are not intended to be added to the costs and benefits of other regulations that result in specific costs of control and emission reductions. However, some costs and benefits estimated in this RIA account for the same air quality improvements as estimated in the illustrative PM 2.5 NAAQS RIA. By contrast, the emission reductions for implementation rules are from a specific class of well-characterized sources . In general, EPA is more confident in the magnitude and location of the emission reductions for implementation rule s rather than illustrative NAAQS analyses. Emission reductions achieved under these and other promulgated rules will ultimately be reflected in the baseline of future NAAQS analyses, which would reduce the incremental costs

6 In revised Economic Guidelines (U.S. EPA, 2010c), EPA retained the VSL endorsed by the SAB with the understanding that further updates to the mortality risk va luation guidance would be forthcoming in the near future. Therefore, this report does not re present final agency policy. 7 This value is $4.8 in 1990$. In this analysis, we adjust the VSL to account for a different currency year ($2010) and to account for income growth to 2015. After applyi ng these adjustments to the $6.3 million value, the VSL is $9.2 million.7-9 and benefits associated with attaining the NAAQS. EPA remains forwar d looking towards the next iteration of the 5-year review cycle for the NAAQS, and as a result does not issue updated RIAs for existing NAAQS that retroactively update the baseline for NAAQS implementation. For more information on the relationship between the NAAQS and rules such as analyzed here, please see Section 1.2.4 of the SO 2 NAAQS RIA (U.S. EPA, 2010a).7-10 Figure 7.1 illustrates the relative breakdown of the monetized PM 2.5 health benefits.

Figure 7-1: Breakdown of Monetized PM 2.5 Health Benefits using Mortality Function from Pope et al. (2002)* *This pie chart breakdown is illustrative, using the results based on Pope et al. (2002) as an example. Using the Laden et al. (2006) function for premature mortality, the percentage of total monetized benefits due to adult mortality would be 97%. This chart shows the breakdown us ing a 3% discount rate, and the results would be similar if a 7% discount rate was used. Table 7-2 provides a general summary of the monetized PM-related health benefits by precursor, including the emission reductions and benefit-per-ton estimates at discount rates of 3% and 7%. 8 Table 7-3 provides a summary of the reductions in health incidences as a result of the pollution reductions. In Table 7-4, we provide the benefits using our anchor points of Pope et al. and Laden et al. as well as the results from the expert elicitation on PM mortality. Figure 7-2 provides a visual representation of the range of PM 2.5 -related benefits estimates using

8 To comply with Circular A-4, EPA provides monetized be nefits using discount rates of 3% and 7% (OMB, 2003). These benefits are estimated for a specific analysis year (i.e., 2013), and most of the PM benefits occur within that year with two exceptions: acute myocardial infarc tions (AMIs) and premature mortality. For AMIs, we assume 5 years of follow-up medical costs and lost wage s. For premature mortality, we assume that there is a “cessation” lag between PM exposures and the total rea lization of changes in health effects. Although the structure of the lag is uncertain, EPA follows the advice of the SAB-HES to assume a segmented lag structure characterized by 30% of mortality reductions in the first year, 50% over years 2 to 5, and 20% over the years 6 to 20 after the reduction in PM 2.5 (U.S. EPA-SAB, 2004). Changes in the lag assumptions do not change the total number of estimated deaths but rather the timing of those deaths. Therefore, discounting only affects the AMI costs after the analysis year and the va luation of premature mortalities that o ccur after the analys is year. As such, the monetized benefits using a 7% discount rate are onl y approximately 10% less than the monetized benefits using a 3% discount rate.

Adult Mortality ‐ Pope et al. 93% Chronic Bronchitis 4% AMI 2% Acute Respiratory Symptoms 0.5%

Infant Mortality 0.4%

Work Loss Days 0.2%

Hospital Admissions, Cardio 0.2% Hospital Admissions, Resp 0.04% Asthma Exacerbation 0.01% Acute Bronchitis 0.01% Upper Resp Symp 0.00% Lower Resp Symp 0.00% ER Visits, Resp 0.00% Other 1%7-11 concentration-response functions supplied by experts. Figure 7-3 shows a breakdown of monetized benefits by engine size.

The benefit-per-ton estimates shown in this RIA are different than the benefit-per-ton estimates cited in the 2010 final SI RICE RIA fo r two reasons. First, these estimates are basedon updated air quality modeling, which results in slightly higher benefits per ton for other nonEGU point sources than the previous modeling. Second, these estimates have been inflated to 2010$. Third, the new air quality modeling did not provide estimates associated with reducing VOCs.

Table 7-2: General Summary of Monetized PM 2.5 -Related Health Co-Benefits Estimates for the Proposed SI RICE NESHAP Reconsideration (millions of 2010$) *

Pollutant Emissions Reductions

(tons) Benefit per ton (Pope, 3%) Benefit per ton (Laden,

3%) Benefit per ton (Pope, 7%) Benefit per ton (Laden,

7%) Total Monetized Benefits (millions of 2010$ at 3%) Total Monetized Benefits (millions of 2010$ at 7%)

PM 2.5 Precursors NO X 9,648 $6,400 $16,000 $5,700 $14,000 $62 to $150 $55 to $140 Total $62 to $150 $55 to $140

* All estimates are for the analysis year (2013), and are rounded to two significant figures so numbers may not sum across columns. It is important to note that the monetized benefits do not include reduced health effects from direct exposure to NO 2 , ozone exposure, ecosystem effects, or visibility im pairment. All fine partic les are assumed to have equivalent health effects, but the benefit per ton estimate s vary because each ton of precu rsor reduced has a different propensity to form PM 2.5 . The monetized benefits incorporate the conversion from precursor emissions to ambient fine particles. Confidence intervals are unavailable for this analysis because of the benefit-per-ton methodology.7-12 Table 7-3: Summary of Reductions in Health Incidences from PM 2.5- Related Co-Benefits for Proposed SI RICE NESHAP Reconsideration*

Avoided Premature Mortality

Pope et al. 7 Laden et al. 18 Avoided Morbidity

Chronic Bronchitis 5 Emergency Department Visits, Respiratory 5 Hospital Admissions, Respiratory 1 Hospital Admissions, Cardiovascular 3 Acute Bronchitis 11 Lower Respiratory 140 Upper Respiratory 110 Minor Restricted Activity Days 5,600 Work Loss Days 950 Asthma Exacerbation 230 Acute Myocardial Infarction 8 * All estimates are for the analysis year (2013) and are rounded to whole numbers with two significant figures. All fine particles are assumed to have equivalent health effects because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type . Confidence intervals are unavailable for this analysis because of the benefit-per-ton methodology.7-13 Table 7-4: All PM 2.5 Co-Benefits Estimates for the Proposed SI RICE NESHAP Reconsideration at discount rates of 3% and 7% in 2013 (in millions of 2010$)*

3% 7% Benefit-per-ton Coefficients Derived from Epidemiology Literature

Pope et al. $62 $55 Laden et al. $150 $140 Benefit-per-ton Coefficients Derived from Expert Elicitation

Expert A $160 $150 Expert B $120 $110 Expert C $120 $110 Expert D $87 $78 Expert E $200 $180 Expert F $110 $100 Expert G $74 $66 Expert H $93 $83 Expert I $120 $110 Expert J $100 $89 Expert K $24 $21 Expert L $82 $73

* All estimates are rounded to two significant figures. The be nefits estimates from the Expert Elicitation are provided as a reasonable characterization of the uncertainty in th e mortality estimates associated with the concentrationresponse function. Confidence intervals are unavailable fo r this analysis because of the benefit-per-ton methodology7-14 Figure 7-2: Total Monetized PM 2.5 Co-Benefits of Proposed SI RICE NESHAP Reconsideration in 2013 *This graph shows the estimated benefits at discount rates of 3% and 7% using effect coefficients derived from the Pope et al. study and the Laden et al study, as well as 12 effect coefficients derived fr om EPA’s expert elicitation on PM mortality. The results shown are not the direct results fro m the studies or expert elicitation; rather, the estimates are based in part on the concentration-response function provided in those studies. $0 $50 $100 $150 $200 $250

Pope et al. Laden et al.Millions(2010$)

PM 2.5 mortality benefits estimates derived from 2 epidemiology functions and 12 expert functions 3% DR 7% DR7-15 Figure 7-3: Breakdown of Total Monetized PM 2.5 Co-Benefits of Proposed SI RICE NESHAP Reconsideration by Engine Size

7.2 Unquantified Benefits The monetized benefits estimated in this RIA only reflect a subset of benefits attributable to the health effect reductions associated with ambient fine particles. Data, time, and resource limitations prevented EPA from quantifying the impacts to, or monetizing the benefits from several important benefit categories, including benefits from reducing exposure to HAP, CO, NO 2 , and ozone exposure, as well as ecosystem effects, and visibility impairment. This does not imply that there are no benefits associated with these emission reductions. These benefits are described qualitatively in this section. 7.2.1 HAP Benefits Even though emissions of air toxics from all sources in the U.S. declined by approximately 42% since 1990, the 2005 National-Scale Air Toxi cs Assessment (NATA) predicts that most Americans are exposed to ambient concentrations of air toxics at levels that have the potential to cause adverse health effects (U.S. EPA, 2011c). 9 The levels of air toxics to which people are exposed vary depending on where people live and work and the kinds of activities in which they engage. In order to identify and prioritize air toxics, emission source types and locations that are

9 The 2005 NATA is available on the Internet at http://www.epa.gov/ttn/atw/nata2005/. Area 500

‐ 600 HP 21%

Area 600

‐ 750 HP 5%

Area >750 HP 74%7-16 of greatest potential concern, U.S. EPA conducts the NATA. 10 The most recent NATA was conducted for calendar year 2005 and was released in March 2011. NATA includes four steps: 1) Compiling a national emissions inventory of air toxics emissions from outdoor sources 2) Estimating ambient and exposure concentrations of air toxics across the United States 3) Estimating population exposures across the United States 4) Characterizing potential public health risk due to inhalation of air toxics including both cancer and noncancer effects Based on the 2005 NATA, EPA estimates that about 5% of census tracts nationwide have increased cancer risks greater than 100 in a million. The average national cancer risk is about 50 in a million. Nationwide, the ke y pollutants that contribute most to the overall cancer risks are formaldehyde and benzene. 11 Secondary formation (e.g., formaldehyde forming from other emitted pollutants) was the largest contributor to cancer risks, while stationary, mobile and background sources contribute almost equal portions of the remaining cancer risk. Noncancer health effects can result from chronic, 12 subchronic, 13 or acute 14 inhalation exposures to air toxics, and include neurological , cardiovascular, liver, kidney, and respiratory effects as well as effects on the immune and reproductive systems. According to the 2005 NATA, about three-fourths of the U.S. population was exposed to an average chronic concentration of air toxics that has the potential for adverse noncancer respiratory health effects. Results from the 2005 NATA indicate that acrolein is the primary driver for noncancer respiratory risk.

10 The NATA modeling framework has a number of limitations that prevent its use as the sole basis for setting regulatory standards. These limitations and uncertaintie s are discussed on the 2005 NATA website. Even so, this modeling framework is very useful in identifying air toxic pollutants and sources of greatest concern, setting regulatory priorities, and informing the decision making process. U.S. EPA.(2011). 2005 National-Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata2005/ 11 Details about the overall confidence of certainty ranki ng of the individual pieces of NATA assessments including both quantitative (e.g., model-to-moni tor ratios) and qualitative (e.g., quality of data, review of emission inventories) judgments can be found at ht tp://www.epa.gov/ttn/atw/nata/roy/page16.html. 12 Chronic exposure is defined in the glossary of the Integrated Risk Information (IRIS) database (http://www.epa.gov/iris) as repeated exposure by th e oral, dermal, or inhalation route for more than approximately 10% of the life span in humans (more than approximately 90 days to 2 years in typically used laboratory animal species). 13 Defined in the IRIS database as repeated exposure by the oral, dermal, or inhalation route for more than 30 days, up to approximately 10% of the life span in humans (more than 30 days up to approximately 90 days in typically used laboratory animal species). 14 Defined in the IRIS database as exposure by the or al, dermal, or inhalation route for 24 hours or less.7-17 Figure 7-4 and Figure depict the estimated census tract-level carcinogenic risk and noncancer respiratory hazard from the assessment. It is important to note that large reductions in HAP emissions may not necessarily translate into significant reductions in health risk because toxicity varies by pollutant, and exposures may or may not exceed levels of concern. For example, acetaldehyde mass emissions are more than double acrolein emissions on a national basis, according to EPA’s 2005 National Emissions Inventory (NEI). However, the Integrated Risk Information System (IRIS) reference concentr ation (RfC) for acrolein is considerably lower than that for acetaldehyde, suggesting that acrolein could be potentially more toxic than acetaldehyde. Thus, it is important to account for the toxicity and exposure, as well as the mass of the targeted emissions.

Figure 7-4 Estimated Chronic Census Tract Carcinogenic Risk from HAP exposure from outdoor sources (2005 NATA) Deleted: Figure Deleted: Figure 7-57-18 Figure 7-5 Estimated Chronic Census Tract Noncancer (Respiratory) Risk from HAP exposure from outdoor sources (2005 NATA) Due to methodology and time limitations under the court-ordered schedule, we were unable to estimate the benefits associated with the hazardous air pollutants that would be reduced as a result of these rules. In a few previous analyses of the benefits of reductions in HAP, EPA has quantified the benefits of potential reductions in the incidences of cancer and non-cancer risk (e.g., U.S. EPA, 1995). In those analyses, EPA relied on unit risk factors (URF) developed through risk assessment procedures. 15 These URFs are designed to be conservative, and as such, are more likely to represent the high end of the di stribution of risk rather than a best or most likely estimate of risk. As the purpose of a benefit analysis is to describe the benefits most likely to occur from a reduction in pollution, use of high-end, conservative risk estimates would overestimate the benefits of the regulation. While we used high-end risk estimates in past analyses, advice from the EPA’s Science Advisory Board (SAB) recommended that we avoid

15 The unit risk factor is a quantitative estimate of the car cinogenic potency of a pollutant, often expressed as the probability of contracting cancer from a 70-year lifetime continuous expo sure to a concentration of one μg/m 3 of a pollutant.7-19 using high-end estimates in benefit analyses (U.S. EPA-SAB, 2002). Since this time, EPA has continued to develop better methods for anal yzing the benefits of reductions in HAP. As part of the second prospective analysis of the benefits and costs of the Clean Air Act (U.S. EPA, 2011a), EPA conducted a case study analysis of the health effects associated with reducing exposure to benzene in Houston from implementation of the Clean Air Act (IEc, 2009). While reviewing the draft report, EPA’s Advisory Council on Clean Air Compliance Analysis concluded that “the challenges for assessing pr ogress in health improvement as a result of reductions in emissions of hazardous air pollutants (HAPs) are daunting...due to a lack of exposure-response functions, uncertainties in emissions inventories and background levels, the difficulty of extrapolating risk estimates to low doses and the challenges of tracking health progress for diseases, such as cancer, that have long latency periods” (U.S. EPA-SAB, 2008). In 2009, EPA convened a workshop to address the inherent complexities, limitations, and uncertainties in current methods to quantify the benefits of re ducing HAP. Recommendations from this workshop included identifying research priorities, focusing on susceptible and vulnerable populations, and improving dose-respons e relationships (Gwinn et al., 2011). In summary, monetization of the benefits of reductions in cancer incidences requires several important inputs, including central estimate s of cancer risks, estimates of exposure to carcinogenic HAP, and estimates of the value of an avoided case of cancer (fatal and non-fatal). Due to methodology and time limitations under the court-ordered schedule, we did not attempt to monetize the health benefits of reductions in HAP in this analysis. Instead, we provide a qualitative analysis of the health effects associat ed with the HAP anticipated to be reduced by these rules.EPA remains committed to improving methods for estimating HAP benefits by continuing to explore additional concepts of benefits, including changes in the distribution of risk. Although numerous HAPs may be emitted from SI RICE, a few HAPs account for over 90% of the total mass of HAPs emissions emitted. These HAPs are formaldehyde (72%), acetaldehyde (8%), acrolein (7%), methanol (3%), and benzene (3%). Although we do not have estimates of emission reductions for each HAP, this rule is anticipated to reduce 1,800 tons of HAPs each year. Below we describe the health effects associated with the top 5 HAPs by mass emitted from SI RICE.7-20 Formaldehyde Since 1987, EPA has classified formaldehyde as a probable human carcinogen based on evidence in humans and in rats, mice, hamsters, and monkeys. 16 Substantial additional research since that time informs current scientific unders tanding of the health effects associated with exposure to formaldehyde. These include recently published research conducted by the National Cancer Institute (NCI) which found an incr eased risk of nasopharyngeal cancer and lymphohematopoietic malignancies such as leukemia among workers exposed to formaldehyde. 17,18 In an analysis of the lymphohematopoietic cancer mortality from an extended follow-up of these workers, NCI confirmed an association between lymphohematopoietic cancer risk and peak formaldehyde exposures. 19 A recent NIOSH study of garment workers also found increased risk of death due to leukemia among workers exposed to formaldehyde. 20 Extended follow-up of a cohort of British chemical wo rkers did not find evidence of an increase in nasopharyngeal or lymphohematopoietic cancers, but a continuing statistically significant excess in lung cancers was reported. 21 In the past 15 years there has been substantial research on the inhalation dosimetry for formaldehyde in rodents and primates by the Ch emical Industry Institute of Toxicology (CIIT, now renamed the Hamner Institutes for Health Sciences), with a focus on use of rodent data for refinement of the quantitative cancer dose-response assessment. 22 , 23 , 24 CIIT’s risk assessment of

16 U.S. EPA. 1987. Assessment of Health Risks to Garm ent Workers and Certain Home Residents from Exposure to Formaldehyde, Office of Pesticides and Toxic Substances, April 1987. Docket EPA-HQ-OAR-2010-0162. 17 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2003. Mortality from lymphohematopoetic malignancies among workers in formaldehyde industries. Journal of the National Cancer Institute 95: 1615- 1623. Docket EPA-HQ-OAR-2010-0162. 18 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2004. Mortality from solid cancers amongworkers in formaldehyde industries. American Journal of Epidemiology 159: 1117-1130. Docket EPA-HQOAR-2010-0162. 19 Beane Freeman, L. E.; Blair, A.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Hoover, R. N.; Hauptmann, M. 2009. Mortality from lymphohematopoietic malignancies among workers in formaldehyde industries: The National Cancer Institute cohort. J. National Cancer Inst. 101: 751-761. Docket EPA-HQ-OAR-2010-0162. 20 Pinkerton, L. E. 2004. Mortality among a cohort of garment workers exposed to formaldehyde: an update. Occup. Environ. Med. 61: 193-200. Docket EPA-HQ-OAR-2010-0162. 21 Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Exte nded follow-up of a cohort of British chemical workers exposed to formaldehyde. J National Cancer Inst. 95:1608-1615. Docket EPA-HQ-OAR-2010-0162. 22 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Kalisak, J Preston, and FJ Miller. 2003. Biologically motivated computational modeling of formaldehyde carci nogenicity in the F344 rat. Tox Sci 75: 432-447. Docket EPA-HQ-OAR-2010-0162. 23 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Ka lisak, J Preston, and FJ Miller. 2004. Human respiratory tract cancer risks of inhaled formaldehyde: Dose-respo nse predictions derived from biologically-motivated computational modeling of a combined rodent and huma n dataset. Tox Sci 82: 279-296. Docket EPA-HQ-OAR2010-0162.7-21 formaldehyde incorporated mechanistic and dosimetric information on formaldehyde. These data were modeled using a biologically-motivated two-stage clonal growth model for cancer and also a point of departure based on a Benchmark Dose approach. However, it should be noted that recent research published by EPA indicates that when two-stage modeling assumptions are varied, resulting dose-response estimates can vary by several orders of magnitude. 25 , 26 , 27 , 28 These findings are not supportive of interpreting the CIIT model results as providing a conservative (health protective) estimate of human risk. 29 EPA research also examined the contribution of the two-stage modeling for formaldehyde towards characterizing the relative weights of key events in the mode-of-action of a carcinogen. For example, the model-based inference in the published CIIT study that formaldehyde’s direct mutagenic action is not relevant to the compound’s tumorigenicity was found not to hold un der variations of modeling assumptions. 30 Based on the developments of the last decade, in 2004, the working group of the IARC concluded that formaldehyde is carcinogenic to humans (Group 1), on the basis of sufficient evidence in humans and sufficient evidence in experimental animals - a higher classification than previous IARC evaluations. After reviewing the currently available epidemiological evidence, the IARC (2006) characterized the human evidence for formaldehyde carcinogenicity as “sufficient,” based upon the data on nasopharyngeal cancers; the epidemiologic evidence on leukemia was characterized as “strong.” 31 Formaldehyde exposure also causes a range of noncancer health effects, including irritation of the eyes (burning and watering of th e eyes), nose and throat. Effects from repeated

24 Chemical Industry Institute of Toxi cology (CIIT).1999. Formaldehyde: H azard characterization and dose-response assessment for carcinogenicity by the r oute of inhalation. CIIT, Septembe r 28, 1999. Research Triangle Park, NC. Docket EPA-HQ-OAR-2010-0162. 25 U.S. EPA. Analysis of the Sensitivity and Uncertainty in 2-Stage Clonal Growth Models for Formaldehyde with Relevance to Other Biologically-Based Dose Response (BBDR) Models. U.S. Environmental Protection Agency, Washington, D.C., EPA/600/R-08/103, 2008. Docket EPA-HQ-OAR-2010-0162. 26 Subramaniam, R; Chen, C; Crump, K; .et .al. (2008) Uncertainties in biologically-based modeling of formaldehyde-induced cancer risk: id entification of key issues. Risk An al 28(4):907-923. Docket EPA-HQOAR-2010-0162. 27 Subramaniam RP; Crump KS; Van Landingham C; et. al. (2007) Uncertainties in the CIIT model for formaldehyde-induced carcinogenicity in the rat: A limi ted sensitivity analysis–I. Risk Anal, 27: 1237–1254. Docket EPA-HQ-OAR-2010-0162. 28 Crump, K; Chen, C; Fox, J; .et .al. (2008) Sensitivity analysis of biologically motivated model for formaldehydeinduced respiratory cancer in humans. Ann Occup Hyg 52:481-495. Docket EPA-HQ-OAR-2010-0162. 29 Crump, K; Chen, C; Fox, J; .et .al. (2008) Sensitivity analysis of biologically moti vated model for formaldehydeinduced respiratory cancer in humans. Ann Occup Hyg 52:481-495. Docket EPA-HQ-OAR-2010-0162. 30 Subramaniam RP; Crump KS; Van Landingham C; et. al. (2007) Uncertainties in the CIIT model for formaldehyde-induced carcinogenicity in the rat: A limi ted sensitivity analysis–I. Risk Anal, 27: 1237–1254. Docket EPA-HQ-OAR-2010-0162. 31 International Agency for Research on Cancer (2006) Formaldehyde, 2-Butoxyethanol and 1-tert-Butoxypropan-2- ol. Monographs Volume 88. World Health Organization, Lyon, France. Docket EPA-HQ-OAR-2010-0162.7-22 exposure in humans include respiratory tract irri tation, chronic bronchitis and nasal epithelial lesions such as metaplasia and loss of cilia. An imal studies suggest that formaldehyde may also cause airway inflammation – including eosinophil infiltration into the airways. There are several studies that suggest that formaldehyde may increase the risk of asthma – particularly in the young. 32 , 33 The above-mentioned rodent and human studies, as well as mechanistic information and their analyses, were evaluated in EPA’s recent Draft Toxicological Review of Formaldehyde – Inhalation Assessment through the Integrated Risk Information System (IRIS) program. This draft IRIS assessment was released in June 20 10 for public review and comment and external peer review by the National Research Council (NRC). The NRC released their review report in April 2011 ( http://www.nap.edu/catalog.php?record_id=13142 ). The EPA is currently revising the draft assessment in response to this review. Acetaldehyde Acetaldehyde is classified in EPA’s IRIS database as a probable human carcinogen, based on nasal tumors in rats, and is considered toxic by the inhalation, oral, and intravenous routes. 34 Acetaldehyde is reasonably anticipated to be a human carcinogen by the U.S. Department of Health and Human Services (DHHS) in the 11 th Report on Carcinogens and is classified as possibly carcinogenic to humans (Group 2B) by the IARC. 35,36 The primary noncancer effects of exposure to acetaldehyde vapors include irritation of the eyes, skin, and respiratory tract. 37

32 Agency for Toxic Substances and Disease Registry (A TSDR). 1999. Toxicological profile for Formaldehyde. Atlanta, GA: U.S. Department of Health a nd Human Services, Public Health Service. http://www.atsdr.cdc.gov/toxprofiles/tp111.html . Docket EPA-HQ-OAR-2010-0162. 33 WHO (2002) Concise International Chemical Assessment Do cument 40: Formaldehyde. Published under the joint sponsorship of the United Nations Environment Programme, the International Labour Organization, and the World Health Organization, and produced within the framework of the Inter-Organization Programme for the Sound Management of Chemicals. Geneva. Docket EPA-HQ-OAR-2010-0162. 34 U.S. Environmental Protection Agency (U.S. EPA). 1991. Integrated Risk Information System File of Acetaldehyde. Research and Development, National Ce nter for Environmental Assessment, Washington, DC. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm. 35 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: http://ntp .niehs.nih.gov/go/16183. 36 International Agency for Research on Cancer (IARC). 1999. Re-evaluation of some organic chemicals, hydrazine, and hydrogen peroxide. IARC Monographs on the Eval uation of Carcinogenic Risk of Chemical to Humans, Vol 71. Lyon, France. 37 U.S. Environmental Protection Agency (U.S. EPA). 1991. Integrated Risk Information System File of Acetaldehyde. Research and Development, National Ce nter for Environmental Assessment, Washington, DC. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm.7-23 Acrolein

EPA determined in 2003 that the human carci nogenic potential of acrolein could not be determined because the available data were inadequate. No information was available on the carcinogenic effects of acrolein in humans and the animal data provided inadequate evidence of carcinogenicity. 38 The IARC determined in 1995 that acrolein was not classifiable as to its carcinogenicity in humans. 39 Acrolein is extremely acrid and irritating to humans when inhaled, with acute exposure resulting in upper respiratory tract irritation, mucus hypersecretion and congestion. The intense irritancy of this carbonyl has been demonstrated during controlled tests in human subjects, who suffer intolerable eye and nasal mucosal sensory reactions within minutes of exposure. 40 These data and additional studies regarding acute effects of human exposure to acrolein are summarized in EPA’s 2003 IRIS Human Health Assessment for acrolein. 41 Evidence available from studies in humans indicate that levels as low as 0.09 ppm (0.21 mg/m 3 ) for five minutes may elicit subjective complaints of eye irritation with increasing concentrations leading to more extensive eye, nose and respiratory symptoms. 42 Lesions to the lungs and upper respiratory tract of rats, rabbits, and hamsters have been observed after subchronic exposure to acrolein. 43 Acute exposure effects in animal studies report bronchial hyper-responsiveness. 44 In a recent study, the acute respiratory irritant effects of exposure to 1.1 ppm acrolein were more pronounced in mice with allergic airway disease by comparison to non-diseased mice which also showed decreases in

38 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. Research and Development, National Center for Environm ental Assessment, Washington, DC. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 39 International Agency for Research on Cancer (IARC). 1995. Monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 63, Dry cleaning, some chlo rinated solvents and other industrial chemicals, World Health Organization, Lyon, France. 40 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. EPA/635/R-03/003. p. 10. Research and Development, National Center for Environmental Assessment, Washington, DC. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 41 U.S. Environmental Protection Agency (U.S. EPA). 2003. In tegrated Risk Information System File of Acrolein. 2003. Research and Development, National Center for Environmental Assessment, Washington, DC. EPA/635/R-03/003. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 42 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. Research and Development, National Center for E nvironmental Assessment, Washington, DC. EPA/635/R03/003. p. 11. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 43 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein.Research and Development, National Center for Environmental Assessment, Washington, DC. EPA/635/R03/003. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 44 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. Research and Development, National Center for E nvironmental Assessment, Washington, DC. EPA/635/R03/003. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf.7-24 respiratory rate. 45 Based on these animal data and demonstration of similar effects in humans (i.e., reduction in respiratory rate), individuals with compromised respiratory function (e.g., emphysema, asthma) are expected to be at increased risk of developing adverse responses to strong respiratory irritants such as acrolein.

Benzene The EPA’s IRIS database lists benzene as a known human carcinogen (causing leukemia) by all routes of exposure, and concludes that exposure is associated with additional health effects, including genetic changes in both humans and animals and increased proliferation of bone marrow cells in mice. 46,47,48 EPA states in its IRIS database that da ta indicate a causal relationship between benzene exposure and acute lymphocytic leukemia and suggest a relationship between benzene exposure and chronic non-lymphocytic leukemia and chronic lymphocytic leukemia. The IARC has determined that benzene is a human carcinogen and the DHHS has characterized benzene as a known human carcinogen. 49,50 A number of adverse noncancer health effects including blood disorders, such as preleukemia and aplastic anemia, have also been associated with long-term exposure to benzene. 51,52

45 Morris JB, Symanowicz PT, Olsen JE, et al. 2003. Immediate sensory nerve-mediated respiratory responses to irritants in healthy and allergic airway-diseased mice. J Appl Physiol 94(4):1563-1571. 46 U.S. Environmental Protection Agency (U.S. EPA). 2000. Integrated Risk Information System File for Benzene. Research and Development, National Center for Environm ental Assessment, Washington, DC. This material is available electronically at: http://www.epa.gov/iris/subst/0276.htm. 47 International Agency for Research on Cancer, IARC monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 29, Some industrial chemic als and dyestuffs, International Agency for Research on Cancer, World Health Organization, Lyon, France, p. 345-389, 1982. 48 Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry, V.A. (1992) Synergistic action of the benzene metabolite hydroquinone on myelopoietic stimulating activity of granul ocyte/macrophage colony-stimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691-3695. 49 International Agency for Research on Cancer (IARC). 1987. Monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 29, Supplement 7, Some industrial chemicals and dyestuffs, World Health Organization, Lyon, France. 50 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: http://ntp .niehs.nih.gov/go/16183. 51 Aksoy, M. (1989). Hematotoxicity and carcinogenici ty of benzene. Environ. Health Perspect. 82: 193-197. 52 Goldstein, B.D. (1988). Benzene toxicity. Occupati onal medicine. State of the Art Reviews. 3: 541-554.7-25 Methanol Exposure of humans to methanol by inhalatio n or ingestion may result in central nervous system depression and degenerative changes in the brain and visual systems. After inhaled or ingested, methanol is converted to formate, a high ly toxic metabolite that within the course of a few hours can cause narcosis, metabolic acidosis, headaches, severe abdominal and leg pain and visual degeneration that can lead to blindness. 53 Methanol has been demonstrated to cause developmental toxicity in rats and mice, and reproductive and developmental toxicity in monkeys. A number of studies have reported adverse effects in the offspring of rats and mice exposed to methanol by inhalation including reduced weight of brain pituitary gland, thymus, thyroid, reduced overall fetal body weight and increased incidence of extra ribs and cleft palate. 54,55,56 Methanol inhalation stud ies using rhesus monkeys have reported a decrease in the length of pregnancy, and limited evidence of impaired learning ability in offspring. 57,58,59,60 EPA has not classified methanol with respect to its carcinogenicity.

Other Air Toxics In addition to the compounds described above, other toxic compounds might be affected by these rules. Information regarding the health effects of those compounds can be found in EPA’s IRIS database. 61

53 Rowe, VK and McCollister, SB. 1981. Alcohols. In: Patty's Industrial Hygiene and Toxicology, 3rd ed. Vol. 2C, GD Clayton, FE Clayton, Eds. John Wiley & Sons, New York, pp. 4528-4541. 54 New Energy Development Organization (NEDO). 1987. Toxicological research of methanol as a fuel for power station: summary report on tests with monkeys, rats and mice. Tokyo, Japan. 55 Nelson, BK; Brightwell, WS; MacKenzie, DR; Khan, A; Burg, JR; Weigel, WW; Goad, PT. 1985. Teratological assessment of methanol and ethanol at high inha lation levels in rats. Toxicol Sci, 5: 727-736. 56 Rogers, JM; Barbee, BD; Rehnberg, BF. 1993. Critical pe riods of sensitivity for the developmental toxicity of inhaled methanol. Teratology, 47: 395. 57 Burbacher, T; Grant, K; Shen, D; Damian, D; Ellis, S; Liberato, N. 1999. Reproducti ve and offspring developmental effects following maternal inhalation e xposure to methanol in nonhuman primates Part II: developmental effects in infants exposed prenatally to methanol. Health Effects Institute. Cambridge, MA. 58 Burbacher, T; Shen, D; Grant, K; Sheppard, L; Damian, D; Ellis, S; Liberato, N. 1999. Reproductive and offspring developmental effects following maternal inhalation e xposure to methanol in nonhuman primates Part I: methanol disposition and reproductive toxicity in a dult females. Health Effects Institute. Cambridge, MA. 59 Burbacher, TM; Grant, KS; Shen, DD; Sheppard, L; Damian, D; Ellis, S; Liberato, N. 2004. Chronic maternal methanol inhalation in nonhuman primates (Macaca fasc icularis): reproductive performance and birth outcome. Neurotoxicol Teratol, 26: 639-650. 60 Burbacher, TM; Shen, DD; Lalovic, B; Gr ant, KS; Sheppard, L; Damian, D; Ellis, S; Liberato, N. 2004. Chronic maternal methanol inhalation in nonhuman primates (Macaca fascicularis): exposure and toxicokinetics prior to and during pregnancy. Neurotoxicol Teratol, 26: 201-221. 61 U.S. EPA Integrated Risk Information System (I RIS) database is available at: www.epa.gov/iris Field Code Changed7-26 7.2.2 Additional NO 2 Co-Benefits In addition to being a precursor to PM 2.5 , NO x emissions are also associated with a variety of respiratory health effects. Unfortunately, we were unable to estimate the health benefits associated with reduced NO 2 or ozone exposure in this analysis because we do not have air quality modeling data available. Therefore, this analysis only quantifies and monetizes the PM 2.5 benefits associated with the reductions in NO 2 emissions. Following an extensive evaluation of health evidence from epidemiologic and laboratory studies, the Integrated Science Assessment (ISA) for Nitrogen Dioxide concluded that there is a likely causal relationship between respiratory health effects and short-term exposure to NO 2 (U.S. EPA, 2008c). Persons with preexisting respiratory disease, children, and older adults may be more susceptible to the effects of NO 2 exposure. Based on our review of this information, we identified four short-term morbidity endpoints that the NO 2 ISA identified as a “likely causal relationship”: asthma exacerbation, respiratory-related emergency department visits, and respiratory-related hospitalizations. The differing evidence and associated strength of the evidence for these different effects is described in detail in the NO 2 ISA. The NO 2 ISA also concluded that the relationship between short-term NO 2 exposure and premature mortality was “suggestive but not sufficient to infer a causal relationship” because it is difficult to attribute the mortality risk effects to NO 2 alone. Although the NO 2 ISA stated that studies consistently reported a relationship between NO 2 exposure and mortality, the effect was generally smaller than that for other pollutants such as PM. NOx emissions also contribute to a variety of adverse welfare effects, including acidic deposition, visibility impairment, nutrie nt enrichment. Deposition of nitrogen causes acidification, which can cause a loss of biodiversity of fishes, zooplankton, and macro invertebrates in aquatic ecosystems, as well as a decline in sensitive tree species, such as red spruce ( Picea rubens ) and sugar maple ( Acer saccharum ) in terrestrial ecosystems. In the northeastern United States, the surface waters affected by acidification are a source of food for some recreational and subsistence fishermen and for other consumers and support several cultural services, including aesthetic and educatio nal services and recreational fishing. Biological effects of acidification in terrestrial ecosystems are generally linked to aluminum toxicity, which can cause reduced root growth, which restricts the ability of the plant to take up water and nutrients. These direct effects can, in turn, increase the sensitivity of these plants to stresses, such as droughts, cold temperatures, insect pests, a nd disease leading to increased mortality of canopy trees. Terrestrial acidification affects several impo rtant ecological services, including declines in habitat for threatened and endangered species (cultu ral), declines in forest aesthetics (cultural),7-27 declines in forest productivity (provisioning), a nd increases in forest soil erosion and reductions in water retention (cultural and regulating). (U.S. EPA, 2008d) Deposition of nitrogen is also associated with aquatic and terrestrial nutrient enrichment. In estuarine waters, excess nutrient enrichment can lead to eutrophication. Eutrophication of estuaries can disrupt an important source of food production, particularly fish and shellfish production, and a variety of cultural ecosystem services, including water-based recreational and aesthetic services. Terrestrial nutrient enrichme nt is associated with changes in the types and number of species and biodiversity in terrestrial systems. Excessive nitrogen deposition upsets the balance between native and nonnative plants, changing the ability of an area to support biodiversity. When the composition of species changes, then fire frequency and intensity can also change, as nonnative grasses fuel more frequ ent and more intense wildfires. (U.S. EPA, 2008d) 7.2.3 Ozone Co-Benefits In the presence of sunlight, NOx and VOCs can undergo a chemical reaction in the atmosphere to form ozone. Reducing ambien t ozone concentrations is associated with significant human health benefits, including mortality and respiratory morbidity (U.S. EPA, 2008a). Epidemiological researchers have associated ozone exposure with adverse health effects in numerous toxicological, clinical and epidemiol ogical studies (U.S. EPA, 2006c). These health effects include respiratory morbidity such as fewer asthma attacks, hospital and ER visits, school loss days, as well as premature mortality. 7.2.4 Carbon Monoxide Co-Benefits Carbon monoxide in ambient air is formed primarily by the incomplete combustion of carbon-containing fuels and photochemical reactions in the atmosphere. The amount of CO emitted from these reactions, relative to carbon dioxide (CO 2 ), is sensitive to conditions in the combustion zone, such as fuel oxygen content, burn temperature, or mixing time. Upon inhalation, CO diffuses through the respiratory system to the blood, which can cause hypoxia (reduced oxygen availability). Carbon monoxide can elicit a broad range of effects in multiple tissues and organ systems that are dependent upon concentration and duration of exposure. The Integrated Science Assessment for Carbon Monoxide (U.S. EPA, 2010a) concluded that short-term exposure to CO is “likely to have a causal relationship” with cardiovascular morbidity, particularly in individuals with coronary heart disease. Epidemiologic studies associate short-term CO exposure with increased risk of emergency department visits and hospital admissions. Coronary heart disease includes those who have angina pectoris (cardiac chest pain), as well as those who have experienced a heart attack. Other7-28 subpopulations potentially at risk include individuals with diseases such as chronic obstructive pulmonary disease (COPD), anemia, or diabetes, and individuals in very early or late life stages, such as older adults or the developing young. The evidence is suggestive of a causal relationship between short-term exposure to CO and respiratory morbidity and mortality. The evidence is also suggestive of a causal relationship for birth outcomes and developmental effects following long-term exposure to CO, and for central nervous system effects li nked to short- and long-term exposure to CO. 7.2.5 Visibility Impairment Co-Benefits Reducing secondary formation of PM 2.5 would improve visibility throughout the U.S. Fine particles with significant light-extinction efficiencies include sulf ates, nitrates, organic carbon, elemental carbon, and soil (Sisler, 1996). Suspended particles and gases degrade visibility by scattering and abso rbing light. Higher visibility impa irment levels in the East are due to generally higher concentrations of fine particles, particularly sulfates, and higher average relative humidity levels. Visibility has direct significance to people’s enjoyment of daily activities and their overall sense of wellbeing. Good visibility increases the quality of life where individuals live and work, and where they engage in recreational activities. Previous analyses (U.S. EPA, 2006; U.S. EPA, 2011a; U.S. EPA, 2011b) show that visibility benefits are a significant welfare benefit category. Without air quality modeling, we are unable to estimate visibility related benefits, nor are we able to determine whether VOC emission reductions would be likely to have a significant impact on visibility in urban areas or Class I areas. 7.3 Characterization of Uncertainty in the Monetized Co-Benefits In any complex analysis, there are likely to be many sources of uncertainty. Many inputs are used to derive the final estimate of economi c benefits, including emission inventories, air quality models (with their associated paramete rs and inputs), epidemiological estimates of concentration-response (C-R) functions, estima tes of values, population estimates, income estimates, and estimates of the future state of the world (i.e., regulations, technology, and human behavior). For some parameters or inputs it may be possible to provide a statistical representation of the underlying uncertainty distribution. For other parameters or inputs, the necessary information is not available. As discussed in the PM 2.5 NAAQS RIA (Table 5.5) (U.S. EPA, 2006), there are a variety of uncertainties associated with these PM benefits. Therefore, the estimates of annual benefits should be viewed as representative of the magnitude of benefits expected, rather than the actual benefits that would occur every year. It is important to note that the monetized benefit-per-ton estimates used here reflect specific geographic patterns of emissions redu ctions and specific air quality and benefits7-29 modeling assumptions. For example, these estimates do not reflect local variability in population density, meteorology, exposure, baseline health in cidence rates, or other local factors. Use of these $/ton values to estimate benefits may lead to higher or lower benefit estimates than if benefits were calculated based on direct air quality modeling. Great care should be taken in applying these estimates to emission reductions occurring in any specific location, as these are all based on national or broad regional emission reduction programs and therefore represent average benefits-per-ton over the entire Unite d States. The benefits-per-ton for emission reductions in specific locations may be very different than the estimates presented here. For more information, see the TSD describing the calcula tion of the new benefit-per-ton estimates (U.S. EPA, 2012).

PM 2.5 mortality benefits are the largest benefit category that we monetized in this analysis. To better characterize the uncertainty associated with mortality impacts that are estimated to occur in areas with low baseline levels of PM 2.5 , we included the LML assessment. For this analysis, policy-specific air quality data is not available due to time or resource limitations, thus we are unable to estimate the pe rcentage of premature mortality associated with this specific rule’s emission reductions at each PM 2.5 level. As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the source apportionment modeling used to calculate the benefit-per-ton estimates for this sector. A very large proportion of the population is exposed at or above the lowest LML of the cohort studies (Figures 7-6 and 7-7), increasing our confidence in the PM mortality analysis. Figure 7-6 shows a bar chart of the percentage of the populati on exposed to various ai r quality levels in the pre- and post-policy policy. Figure 7-7 shows a cumulative distribution function of the same data. Both figures identify the LML for each of the major cohort studies. As the policy shifts the distribution of air quality levels, fewer people are exposed to PM 2.5 levels at or above the LML. Using the Pope et al. (2002) study, the 77% of the population is exposed to annual mean PM 2.5 levels at or above the LML of 7.5 μg/m 3 . Using the Laden et al. (2006) study, 25% of the population is exposed above the LML of 10 μg/m 3

. As we model avoided premature deaths among populations exposed to levels of PM 2.5 , we have lower confidence in levels below the LML for each study. It is important to emphasize that we have high confidence in PM 2.5 -related effects down to the lowest LML of the major cohort studies. Just because we have greater confidence in the benefits above the LML, this does not mean that we have no confidence that benefits occur below the LML. A large fraction of the baseline exposure o ccurs below the level of the National Ambient Air Quality Standard (NAAQS) for annual PM 2.5 at 15 μg/m 3 ,which was set in 2006. It is7-30 important to emphasize that NAAQS are not set at a level of zero risk. Instead, the NAAQS reflect the level determined by the Administrator to be protectiv e of public health within an adequate margin of safety, taki ng into consideration effects on susceptible populations. While benefits occurring below the standard may be less certain than those occurring above the standard, EPA considers them to be legitimate components of the total benefits estimate.

Figure 7-6. Percentage of Adult Population by Annual Mean PM 2.5 Exposure in the Baseline7-31 Figure 7-7. Cumulative Distribution of Adult Population by Annual Mean PM 2.5 Exposure in the Baseline

Above we present the estimates of the total benefits, based on our interpretation of the best available scientific literature and methods and supported by the SAB-HES and the NAS (NRC, 2002). The benefits estimates are subject to a number of assumptions and uncertainties. For example, for key assumptions underlying the estimates for premature mortality, which typically account for more than 90% of the total benefits, we we re able to quantify include the following:

1. PM 2.5 benefits were derived through benefit per-ton estimates, which do not reflect local variability in population density, meteorology, exposure, baseline healthincidence rates, or other local factors that might lead to an over-estimate or underestimate of the actual benefits of controlling PM precursors. We do not have data on the specific location of the air quality changes associated with this rulemaking; as such, it is not feasible to estimate the pr oportion of benefits occurring in different locations, such as designated nonattainment areas. In addition, the benefit-per-ton estimates are based on emissions from existing sources. To the extent that the geographic distribution of the emissions reductions for this rule are different than the7-32 modeled emissions, the benefits may be underestimated or overestimated. In general, there is inherently more uncertainty for new sources, which may not be included in the emissions inventory, than existing sources. 2. We assume that all fine particles, rega rdless of their chemical composition, are equally potent in causing premature mortality. This is an important assumption, because PM 2.5 produced via transported precursors emitted from EGUs may differ significantly from direct PM 2.5 released from diesel engines and other industrial sources, but no clear scientific grounds exist for supporting differential effects estimates by particle type. 3. We assume that the health impact function for fine particles is linear down to the lowest air quality levels modeled in this an alysis. Thus, the estimates include health benefits from reducing fine particles in areas with varied concentrations of PM 2.5, including both regions that are in attainment with fine particle standard and those that do not meet the standard down to the lowest modeled concentrations. 4. To characterize the uncertainty in the relationship between PM 2.5 and premature mortality (which typically accounts for 85% to 95% of total monetized benefits), we include a set of twelve estimates based on results of the expert elicitation study in addition to our core estimates. Even these multiple characterizations omit the uncertainty in air quality estimates, baseline incidence rates, populations exposed and transferability of the effect estimate to diverse locations. As a result, the reported confidence intervals and range of estimates give an incomplete picture about the overall uncertainty in the PM 2.5 estimates. This information should be interpreted within the context of the larger uncertainty surrounding the entire analysis. For more information on the uncertainties associated with PM 2.5 benefits, please consult the PM 2.5 NAAQS RIA (Table 5.5).

This RIA does not include the type of deta iled uncertainty assessment found in the PM NAAQS RIA because we lack the necessary air quality input and monitoring data to run the benefits model. In addition, we have not conducted any air quality modeling for this rule. Moreover, it was not possible to develop benefit-per-ton metrics and associated estimates of uncertainty using the benefits estimates from the PM RIA because of the significant differences between the sources affected in that rule and those regulated here. However, the results of the Monte Carlo analyses of the health and welfare benefits presented in Chapter 5 of the PM RIA can provide some evidence of the uncertainty surrounding the benefits results presented in this analysis.7-33 7.4 Comparison of Co-Benefits and Costs Using a 3% discount rate, we estimate the total combined monetized co-benefits of the reconsidered SI RICE NESHAP proposal to be $62 million to $150 million in theimplementation year (2013). Using a 7% discount rate, we estimate the total monetized cobenefits of the final rule to be $55 million to $140 million. The annualized social costs of the reconsidered SI RICE NESHAP proposal are $115 million at a 7% interest rate. 62 Thus, the net benefits are $-53 million to $35 million at a 3% discount rate and $-60 million to $ 25 million at a 7% discount rate. All estimates are in 2010$ for the year 2013. Table 7-5 shows a summary of the monetized co-benefits, social costs, and net benefits for the reconsidered SI RICE NESHAP proposal, respectively. Figures 7-8 and 7-9 show the full range of net benefits estimates (i.e., annual co-benefits minus annualized costs) utilizing the 14 different PM 2.5 mortality functions at discount rates of 3% and 7%. In addition, the benefits from reducing 22,000 tons of carbon monoxide and 1,800 tons of HAPs each year from SI RICE have not been included in these estimates. Table 7-5. Summary of the Annualized Monetized Benefits, Social Costs, and Net Benefits for the Proposed SI RICE NESHAP Reconsideration in 2013 (millions of 2010$) 1

3% Discount Rate 7% Discount Rate

Total Monetized Benefits 2 $62 to $150 $55 to $140 Total Compliance Costs 3 $115 $115 Net Benefits $-53 to $35 $-60 to $25

Non-monetized Benefits Health effects from HAP exposure Health effects from CO

, NO 2 , and ozone exposure Ecosystem effects Visibility impairment 1 All estimates are for the implementation year (2013), and are rounded to two significant figures. 2 The total monetized benefits reflect the human heal th benefits associated with reducing exposure to PM 2.5 through

reductions of PM 2.5 precursors such as NOx. Human health benefits are shown as a range from Pope et al. (2002) to Laden et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mo rtality because the scientific eviden ce is not yet sufficient to allow differentiation of effects estimates by particle type. B ecause these estimates were generated using benefit-per-ton estimates, we do not break down the total monetized benefits into specific components here. See Figure 7-1 for an illustration of the breakdown, or the RIA for the final Cross-States Air Pollution Rule (EPA, 2011) for more information.

62 For more information on the annualized social costs, please refer to Section 5 of this RIA.7-34 3 The annual compliance costs serve as a pr oxy for the annual social costs of this rule given the lack of difference between the two. The engineering compliance costs are annualized using a 7 percent discount rate.7-35 Figure 7-8. Net Benefits for Proposed SI RICE NESHAP Reconsideration at 3% discount rate* *Net Benefits are quantified in terms of PM 2.5 at a 3% discount rate for 2013 and are in 2010$. This graph shows 14 benefits estimates combined with the cost estimate. All fine particles are assumed to have equivalent health effects. The monetized benefits incorporate the conversion from precursor emissions to ambient fine particles. ‐ $100

‐ $80 ‐ $60 ‐ $40 ‐ $20

$0 $20 $40 $60 $80 $100

Pope et al. Laden et al.Millions(2010$)

Cost estimate combined with total monetized benefits estimates derived from 2 epidemiology functions and 12 expert functions7-36 Figure 7-9. Net Benefits for Proposed SI RICE NESHAP Reconsideration at 7% discount rate* *Net Benefits are quantified in terms of PM 2.5 benefits at a 7% discount rate at a 3% discount rate for 2013 and are in 2010$. This graph shows 14 benefits estimates combined with the cost estimate. The monetized benefits incorporate the conversion from precursor emissions to ambient fine particles. ‐ $100

‐ $80 ‐ $60 ‐ $40 ‐ $20

$0 $20 $40 $60 $80

Pope et al. Laden et al.Millions(2010$)

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EPA 240-R-00-003. National Center for Environmental Economics, Office of Policy Economics and Innovation. Washington, DC. September. Available at <http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html/$file/cover.pdf>. U.S. Environmental Protection Agency (U.S. EPA). 2006a. Regulatory Impact Analysis, 2006 National Ambient Air Quality St andards for Particulate Matter , Chapter 5. Available at <http://www.epa.gov/ttn/ecas/regdata/RIAs/Chapter% 205--Benefits.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2006b. Technical Support Document for the Proposed PM NAAQS Rule: Response Surface Modeling . Office of Air Quality Planning and Standards, Research Triangle Park, NC. February. Available at <http://www.epa.gov/scram001/reports /pmnaaqs_tsd_rsm_all_021606.pdf>. U.S. Environmental Protection Agency (U.S. EPA). 2006c. Air Quality Criteria for Ozone and Related Photochemical Oxidants (Final). EPA/600/R-05/004aF-cF. Washington, DC: U.S. EPA. February. Available at at http://cfpub.epa.gov/ncea/CFM/recordisplay.cfm?deid=149923. U.S. Environmental Protection Agency (U.S. EPA). 2008. Regulatory Impact Analysis, 2008 National Ambient Air Quality Standard s for Ground-level Ozone, Chapter 6. Available at <http://www.epa.gov/ttn/ecas/regdata /RIAs/6-ozoneriachapter6.pdf>. U.S. Environmental Protection Agency (U.S. EPA). 2008a. Integrated Science Assessment for Oxides of Nitrogen - Health Criteria (Final Report). National Center for Environmental Assessment, Research Triangle Park, NC. July. Available at at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=194645>. U.S. Environmental Protection Agency (U.S. EPA). 2008c. Guidelines for Preparing Economic Analyses: External Review Draft. National Center for Environmental Economics, Office of Policy Economics and Innovation. Washington, DC. Available at <http://yosemite.epa.gov/ee/epa/eermfile.n sf/vwAN/EE-0516-01.pdf/$File/EE-0516- 01.pdf>. U.S. Environmental Protection Agency (U.S. EPA). 2008d. Integrated Science Assessment for Oxides of Nitrogen and Sulfur–Ecological Criteria National (Final Report). National Center for Environmental Assessment, Research Triangle Park, NC. EPA/600/R-08/139. December. Available at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=201485>. U.S. Environmental Protection Agency (U.S. EPA). 2009a. Regulatory Impact Analysis: National Emission Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry . Office of Air Quality Planning and Standards, Research Triangle Park, NC. April. Available at <http://www.epa.gov/ttn/ecas /regdata/RIAs/portlandcementria_4-20-09.pdf >.8-7 U.S. Environmental Protection Agency (U.S. EPA). 2009b. Integrated Science Assessment for Particulate Matter (Final Report). EPA-600-R-08-139F. National Center for Environmental Assessment—RTP Divi sion. December. Available at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546>. U.S. Environmental Protection Agency (U.S. EPA). 2009c. 2002 National-Scale Air Toxics Assessment. Office of Air Quality Planning and Standards. June. Available at <http://www.epa.gov/ttn/atw/nata2002/> U.S. Environmental Protection Agency (U.S. EPA). 2010a. Integrated Science Assessment for Carbon Monoxide . National Center for Environmental Assessment, Research Triangle Park, NC. EPA/600/R-09/019F. January. Available at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686>. U.S. Environmental Protection Agency (U.S. EPA). 2010b. Final Regulatory Impact Analysis (RIA) for the NO 2 National Ambient Air Quality Standards (NAAQS) . Office of Air Quality Planning and Standards, Research Triangle Park, NC. January. Available at < http://www.epa.gov/ttn/ecas/regdata/ RIAs/FinalNO2RIAfulldocument.pdf>. U.S. Environmental Protection Agency (U.S. EPA). 2010c. Summary of Expert Opinoins on the Existence of a Threshold in the Con centration-Response Function for PM 2.5 -related Mortality: Technical Support Document . Compiled by Office of Air Quality Planning and Standards, Research Triangle Park, NC. July. Available at <http://www.epa.gov/ttn/ecas/benefits.html>. U.S. Environmental Protection Agency (U.S. EPA). 2010d. Lowest Measured Level (LML) Assessment for Rules without Policy-Specific Air Quality Data Available: Technical Support Document . Office of Air Quality Planning and Standards, Research Triangle Park, NC. July. Available at <http://www.epa.gov/ttn/ecas/benefits.html>. U.S. Environmental Protection Agency (U.S. EPA). 2010e. Regulatory Impact Analysis for the Transport Rule. Office of Air Quality Planning and Standards, Research Triangle Park, NC. July. Available at <http://www.epa.gov/ttn/ecas/ria.html>. U.S. Environmental Protection Agency (U.S. EPA). 2010f. Air Quality Modeling Technical Support Document: Changes to the Renewable Fuel Standard Program , Office of Air Quality Planning and Standards, EPA 454/R-10-001. February. Available at at <http://www.epa.gov/OMS/renewa blefuels/454r10001.pdf>. U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2004. Advisory on Plans for Health Effects Analysis in the Analytical Plan for EPA’s Second Prospective Analysis – Benefits and Costs of the Clean Air Act, 1990-2020. Advisory by the Health Effects Subcommittee of the Advisory Council on Clean Air Compliance Analysis. EPA-SAB-COUNCIL-ADV-04-002. March. Available at at <http://yosemite.epa.gov/sab%5CSABPR ODUCT.NSF/08E1155AD24F871C85256E540 0433D5D/$File/council_adv_04002.pdf>.8-8 U.S. Environmental Protection Agency—Science Advisory Board (U.S. EPA-SAB). 2007. SAB Advisory on EPA’s Issues in Valuing Mortality Risk Reductio n. EPA-SAB-08-001. October. Available at <http://yosemite.epa.gov/sab/sabproduct.nsf/4128007E7876B8F0852573760058A978/$F ile/sab-08-001.pdf >. U.S. Environmental Protection Agency—Science Advisory Board (U.S. EPA-SAB). 2009a. Review of EPA’s Integrated Scien ce Assessment for Particulate Matter (First External Review Draft, December 2008). EPA-COUNCIL-09-008. May. Available at <http://yosemite.epa.gov/sab/SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86 e/73ACCA834AB44A10852575BD0064 346B/$File/EPA-CASAC-09-008- unsigned.pdf>. U.S. Environmental Protection Agency—Science Advisory Board (U.S. EPA-SAB). 2009b. Consultation on EPA’s Particulate Matter National Ambient Air Quality Standards: Scope and Methods Plan for Health Risk and Exposure Assessment . EPA-COUNCIL-09- 009. May. Available at at <http://yosemite.epa.gov/sab/SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86 e/723FE644C5D758DF852575BD00763A32/$File/EPA-CASAC-09-009-unsigned.pdf>. U.S. Small Business Administration (SBA). 2008. “Table of Small Business Size Standards Matched to North American Industry Classification System Codes.” Effective August 22, 2008. <http://www.sba.gov/idc/groups/publ ic/documents/sba_homepage/serv_sstd_ tablepdf.pdf>. Viscusi, V.K., and J.E. Aldy. 2003. “The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World.” Journal of Risk and Uncertainty 27(1):5-76. Wade, S.H. 2003. “Price Responsiveness in the AEO2003 NEMS Residential and Commercial Buildings Sector Models.” <http://www.eia.doe.gov/oiaf/analysisp aper/elasticity/pdf/buildings.pdf>.B-9***E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

**E.O. 12866 NESHAP RICE; NSPS For Stationary Internal Combustion Engines 2060-AQ58 Proposal 20120410** 

6560-50-P

**ENVIRONMENTAL PROTECTION AGENCY**

**40 CFR Part 63 [EPA-HQ-OAR-2008-0708, FRL-XXXX-Y]**  **RIN 2060-AQ58**

**National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source**  **Performance Standards for Stationary Internal Combustion Engines**

**AGENCY:** Environmental Protection Agency (EPA).

**ACTION:** Proposed rule.

**SUMMARY:** The EPA is proposing amendments to the national emission standards for hazardous air pollutants for stationary reciprocating internal combustion engines under section 112 of the Clean Air Act. The proposed amendments include alternative testing options for certain large spark ignition (generally natural gas-fueled) stationary reciprocating internal combustion engines, management practices for a subset of existing spark ignition stationary reciprocating internal combustion engines in sparsely populated areas and alternative monitoring and compliance options for the same engines in populated areas. ThePage 2 of 197 EPA is also proposing to include a limited temporary allowance for existing stationary emergency area source engines to be used for peak shaving and non-emergency demand response. In addition, the EPA is proposing to increase the hours that stationary emergency engines may be used for emergency demand response. Theproposed amendments also correct minor mistakes in the preexisting regulations.

**DATES** : Comments . Comments must be received on or before [INSERT DATE 45 DAYS AFTER PUBLICATION IN THE FEDERAL REGISTER], or 30 days after date of public meeting if later. Public Meeting . If anyone contacts us requesting to speak at a public meeting by [INSERT DATE 7 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER], a public meeting will be held on [INSERT DATE 15 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. If you are interested in attending the public meeting, contact Ms. Pamela Garrett at (919) 541-7966 to verify that a meeting will be held.

**ADDRESSES** : Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2008-0708, by one of the following methods:

 www.regulations.gov: Follow the on-line instructions for submitting comments.

 Email: a-and-r-docket@epa.gov.

 Fax: (202) 566-1741.

 Mail: Air and Radiation Docket and Information Center, Comment [A1]: Did EPA consider 60 days? Why was 45 days chosen?Page 3 of 197 Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW, Washington, DC 20460. Please include a total of two copies. The EPA requests a separate copy also be sent to the contact person identified below (see **FOR FURTHER INFORMATION CONTACT** ).

 Hand Delivery: Air and Radiation Docket and Information Center, U.S. EPA, Room B102, 1301 Constitution Avenue, NW, Washington, DC. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of

boxed information.

Instructions : Direct your comments to Docket ID No. EPA-HQ-OAR2008-0708. The EPA’s policy is that all comments received will be included in the public docket without change and may be made available on-line at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov website is an “anonymous access” system, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without goingPage 4 of 197 through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contactinformation in the body of your comment and with any disk or CDROM you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. Public Meeting : If a public meeting is held, it will be held at the EPA’s campus located at 109 T.W. Alexander Drive in Research Triangle Park, NC or an alternate site nearby.

Docket : All documents in the docket are listed in the www.regulations.gov index. The EPA also relies on documents inDocket ID Nos. EPA-HQ-OAR-2002-0059, EPA-HQ-OAR-2005-0029, EPAHQ-OAR-2005-0030, and EPA-HQ-OAR-2010-0295, and incorporated those dockets into the record for this action. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically inPage 5 of 197 www.regulations.gov or in hard copy at the Air and Radiation Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566- 1744, and the telephone number for the Air Docket is (202) 566-

1742.

**FOR FURTHER INFORMATION CONTACT:** Ms. Melanie King, Energy Strategies Group, Sector Policies and Programs Division (D243- 01), Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number (919) 541-2469; facsimile number (919) 541-5450; email address king.melanie@epa.gov.

**SUPPLEMENTARY INFORMATION** : Organization of This Document

. The following outline is provided to aid in locating information in the preamble.

I. General Information A. Executive Summary B. Does this action apply to me? C. What should I consider as I prepare my comments for the EPA? II. Summary of Proposed Amendments A. Total Hydrocarbon Compliance Demonstration Option B. Emergency Demand Response/Peak Shaving C. Non-Emergency Stationary SI RICE Greater than 500 HP Located at Area Sources D. Stationary Agricultural RICE in San Joaquin Valley E. Remote Areas of Alaska F. Miscellaneous Corrections and Revisions G. Compliance Date III. Summary of Environmental, Energy and Economic Impacts A. What are the air quality impacts? B. What are the cost impacts? C. What are the benefits?Page 6 of 197 D. What are the non-air health, environmental and energy impacts? IV. Solicitation of Public Comments and Participation V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act of 1995 E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks H. Executive Order 13211: Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations

**I. General Information** A. Executive Summary 1. Purpose of the Regulatory Action The purpose of this action is to propose amendments to the national emission standards for hazardous air pollutants (NESHAP) for stationary reciprocating internal combustion engines (RICE) under section 112 of the Clean Air Act (CAA). This proposal was developed to address certain issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments and other communications. This proposal also provides

clarifications and corrects minor mistakes in the current RICE NESHAP and revises the new source performance standards (NSPS)Page 7 of 197 for stationary engines, 40 CFR part 60, subparts IIII and JJJJ, for consistency with the RICE NESHAP. This action is conducted under the authority of section 112 of the CAA, “Hazardous Air Pollutants,” (HAP) which requires the

EPA to establish NESHAP for the control of hazardous air pollutants (HAP) from both new and existing sources in regulated source categories. 2. Summary of the Major Provisions of the Regulatory Action After promulgation of the 2010 RICE NESHAP amendments, the EPA received several petitions for reconsideration, legal challenges, and other communications raising issues of practical implementability, and certain factual information that had not been brought to the EPA’s attention during the rulemaking. The

EPA has considered this information and believes that amendments to the rule to address certain of these issues are appropriate. Therefore, the EPA is proposing to amend 40 CFR part 63, subpart ZZZZ, NESHAP for Stationary RICE. The current regulation applies to owners and operators of existing and new stationary RICE at major and area sources of HAP emissions. The applicability of the rule remains the same and is not changed by this proposal. The EPA is also proposing to amend the NSPS for stationary engines to conform with certain of the amendments proposed for

the NESHAP.Page 8 of 197 The EPA proposes to add an alternative compliance demonstration option for stationary 4-stroke rich burn (4SRB) spark ignition (SI) engines subject to a 76 percent or more formaldehyde reduction. Owners and operators of 4SRB engines would be permitted to demonstrate compliance with the 76 percent formaldehyde reduction emission standard by testing total hydrocarbon (THC) emissions and showing that the engine is achieving at least a 30 percent reduction of THC emissions. The alternative compliance option would provide a less expensive and less complex, but equally effective, method for demonstrating compliance than testing for formaldehyde. Certain stationary RICE are maintained in order to be able to respond to emergency power needs. The EPA proposes to allow owners and operators of such stationary emergency RICE to operate their engines as part of an emergency demand response program within the 100 hours per year that is already permitted for maintenance and testing of the engines. The 100 hours per year allowance would ensure that a sufficient number of hours are permitted for engines to meet independent system operator (ISO) and regional transmission organization (RTO) tariffs and other requirements for participating in various emergency demand response programs and would assist in stabilizing the grid, preventing electrical blackouts and supporting local electric system reliability. A temporary limited allowance that will Comment [A2]: How long does maintenance and testing taking? Is this responsiveto the petition?Page 9 of 197 expire on April 16, 2017, is being proposed for stationary emergency engines located at area sources of HAP emissions to be used for up to 50 hours per year for any non-emergency purpose, including peak shaving. The 50 hours is part of the 100 hours per year total allowance for all types of emergency engine operation (except during emergencies where no other power is available, which is not restricted by the rule). The temporary allowance for peak shaving would give sources time to address reliability issues and develop solutions to reliability issues while facilities are coming into compliance with the National

Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units, which were promulgated on February 16, 2012 (77 FR 9304). The EPA proposes management practices for owners and operators of existing stationary 4-stroke SI engines above 500 horsepower (HP) that are area sources of HAP emissions and where the engines are remote from human activity. A remote area is defined as either a Department of Transportation (DOT) Class 1 pipeline location 1 , or, if the facility is not on a pipeline, if within a 0.25 mile radius of the facility there are 5 or less buildings intended for human occupancy. The EPA proposes that these sources be subject to management practices rather than

1 A Class 1 location is defined as an offshore area or any class location unit that has 10 or fewer buildings intended for human occupancy. Comment [A3]: How was this chosen?

Comment [A4]: How was this chosen?Page 10 of 197 emissions standards and associated testing and monitoring. This would address reasonable concerns with accessibility, infrastructure, and staffing that stem from the remoteness of the engines and higher costs that would be associated with compliance with the existing requirements. The EPA proposes that existing stationary 4-stroke SI engines above 500 HP at area sources that are in populated areas (defined as DOT pipeline Class 2 through Class 4 areas, or if not on a pipeline, if within a 0.25 mile radius of the facility there are more than 5 buildings intended for human occupancy) be subject to anequipment standard that requires the installation of HAPreducing aftertreatment. Sources would be required to test their engines to demonstrate compliance initially, perform catalyst activity check-ups, and either monitor the catalyst inlet temperature continuously or employ high temperature shutdown devices to protect the catalyst. To address how certain existing compression ignition (CI) engines are currently regulated, the EPA proposes to specify that any existing certified CI engine above 300 HP at an area

source of HAP emissions that was certified to meet the Tier 3 engine standards and was installed before June 12, 2006, is in compliance with the NESHAP. This provision would create regulatory consistency between the same engines installed before and after June 12, 2006. Deleted: aftertreatment-forcing Comment [A5]: This phrase seems awkward.

Comment [A6]: Do you mean emissions? Under the statute, you can set emissions standards or work practice standards, not technology standards, right?

Comment [A7]: What is the significance of this date?Page 11 of 197 The EPA is proposing amendments to the requirements for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are subject to state and locally enforceable requirements requiring replacement of the engine by January 1, 2018. This is meant to deal with a specific concern regarding the interaction of the NESHAP with certain rules for agricultural engines in the San Joaquin Valley in California. The EPA is proposing to allow these engines to meet management practices under the RICE NESHAP for a period of 2 years until May 3, 2015. This provision would deal with the issue of owners and operators having to install controls on their engines in order to meet the RICE NESHAP, and then having to replace their engines shortly thereafter due to state and local rules specifying the replacement of engines. Owners and operators will have two additional years to replace their engines without having to install controls, but will be required to use management practices during that period. The last major change the EPA proposes to make is to

broaden the definition of remote area sources of Alaska in the RICE NESHAP. Currently, remote areas are those that are not on the Federal Aid Highway System (FAHS). This change would permit existing stationary CI engines at other remote area sources in Alaska to meet management practices as opposed to emission standards likely necessitating aftertreatment. These remotePage 12 of 197 areas have the same challenges as areas not on the FAHS, and complying with the current rule would similarly be prohibitively costly and potentially infeasible. In addition to area sources located in areas of Alaska that are not accessible by the FAHS being defined as remote and subject to management practices, the EPA also proposes that any stationary RICE in Alaska meeting all of the following conditions be subject to management practices: (1) The only connection to the FAHS is through the Alaska Marine Highway System (AMHS), or the stationary RICE operation is within an isolated grid in Alaska that is not connected to the statewide electrical grid referred to as the Alaska Railbelt Grid, and (2) At least 10 percent of the power generated by the stationary RICE on an annual basis is used for residential purposes, and (3) The generating capacity of the area source is less than 12 megawatts, or the stationary RICE is used exclusively for backup power for renewable energy and is used less than 500 hrs per year on a 10 year rolling average.

3. Costs and Benefits These proposed amendments would reduce the capital and annual costs of the original 2010 amendments by $287 million and $139 million, respectively. The EPA estimates that with thePage 13 of 197 proposed amendments, the capital cost of the rule is $840 million and the annual cost is $490 million ($2010). These proposed amendments would also result in decreases to

the emissions reductions estimated in 2013 from the original

2010 RICE NESHAP amendments. The estimated reductions in 2013 from the 2010 RICE NESHAP rulemaking with these proposed amendments are 2,800 tons per year (tpy) of HAP, 36,000 tpy of carbon monoxide (CO), 2,800 tpy of particulate matter (PM), 9,600 tpy of nitrogen oxide (NOx), and 36,000 tpy of volatile organic compounds (VOC).

The EPA estimates the monetized co-benefits in 2013 of the original 2010 RICE NESHAP amendments with these proposed amendments incorporated to be $830 million to $2,100 million (2010 dollars) at a 3-percent discount rate and $740 million to $1,800 million (2010 dollars) at a 7-percent discount rate. B. Does this action apply to me? Regulated Entities . Categories and entities potentially regulated by this action include: Category NAICS 1 Examples of regulated entities Any industry using a stationary internal combustion engine as defined in the proposed amendments. 2211 Electric power generation, transmission, or distribution. 622110 Medical and surgical hospitals.

48621 Natural gas transmission.

211111 Crude petroleum and natural gas production. 211112 Natural gas liquids producers. Comment [A8]: Please include information on size of change (in absolute or percent) relative to previous rule.

Comment [A9]: Please include information on size of change (in absolute or percent) relative to previous rule.Page 14 of 197 92811 National security.

1 North American Industry Classification System.

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. To determine whether your engine is regulated by this action, you should examine the applicability criteria of this proposed rule. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding **FOR FURTHER INFORMATION CONTACT**

section. C. What should I consider as I prepare my comments for the EPA? 1. Submitting CBI . Do not submit this information to the EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to the EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the

comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI to only the following address: Ms.Page 15 of 197 Melanie King, c/o OAQPS Document Control Officer (Room C404-02), U.S. EPA, Research Triangle Park, NC 27711, Attention Docket ID No. EPA-HQ-OAR-2008-0708. 2. Tips for Preparing Your Comments. When submitting comments,

remember to: (a) Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number). (b) Follow directions. The EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number. (c) Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. (d) Describe any assumptions and provide any technical information and/or data that you used. (e) If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. (f) Provide specific examples to illustrate your concerns, and suggest alternatives. (g) Explain your views as clearly as possible, avoiding the use of profanity or personal threats. (h) Make sure to submit your comments by the comment period

deadline identified.Page 16 of 197 Docket . The docket number for this proposed rule is Docket ID No. EPA-HQ-OAR-2008-0708. World Wide Web (WWW) . In addition to being available in the docket, an electronic copy of this proposed rule will be posted on the WWW through the Technology Transfer Network Website (TTN Web). Following signature, the EPA will post a copy of this proposed rule on the TTN’s policy and guidance page for newly proposed or promulgated rules at http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. **II. Summary of Proposed Amendments** This action proposes amendments to the NESHAP for RICE in 40 CFR part 63, subpart ZZZZ. This action also proposes amendments to the NSPS for stationary engines in 40 CFR part 60, subparts IIII and JJJJ. The NESHAP for stationary RICE to regulate emissions of HAP was developed in several stages. The EPA initially addressed stationary RICE greater than 500 HP located at major sources of HAP emissions in 2004 (69 FR 33473). The EPA addressed new stationary RICE less than or equal to 500 HP located at major sources and new stationary RICE located at area sources in 2008 (73 FR 3568). Most recently, requirements for existing stationary RICE less than or equal to 500 HP located at major sources and existing stationary RICE located atPage 17 of 197 area sources were finalized in 2010 (75 FR 9648 and 75 FR 51570). The EPA is proposing to address a number of issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments, and other communications. The EPA is also proposing to revise 40 CFR part 60, subparts IIII and JJJJ for consistency

with the RICE NESHAP and to make minor corrections and clarifications. The following sections present the issues that the EPA is addressing in this action, background information as to why these issues are causing concern among affected stakeholders, and how the EPA proposes to resolve the issues.

A. Total Hydrocarbon Compliance Demonstration Option 1. Background Currently, SI 4SRB non-emergency engines greater than 500 HP located at major sources and existing SI 4SRB non-emergency engines greater than 500 HP located at area sources have the option of meeting either a formaldehyde percent reduction or a formaldehyde concentration standard. Formaldehyde was established in the original 2004 RICE NESHAP as an appropriate surrogate for HAP emissions from 4SRB engines based on industry test data available at that time. Based on testing of stationary lean burn engines conducted at Colorado State University (CSU), the EPA was able to establish CO as a surrogate for HAP for leanPage 18 of 197 burn engines. Rich burn engines were not tested at CSU and the

data the EPA had available at the time that were used to set the standards for rich burn engines did not support the same relationship between CO and HAP reductions for rich burn engines. Therefore, the EPA was unable to establish CO as a surrogate for HAP emissions for rich burn engines and the emission standard for rich burn engines was specified in terms of formaldehyde, the hazardous air pollutant emitted in the largest quantity from stationary engines. The EPA has previously acknowledged that it is significantly more expensive and difficult to test for formaldehyde than for CO, but has been unable in the past to support the same flexibility for rich burn engines as is currently in the rule for lean burn engines with the option to meet the standards in terms of either formaldehyde or CO. For

these reasons , and expecting that new data for rich burn engines may become available in the future for the EPA to review and reassess possible surrogates for HAP, the EPA requested comment on this issue when proposing NESHAP for stationary existing engines less than or equal to 500 HP at major sources and all stationary existing engines at area sources in 2009 (74 FR 9698). Specifically, the EPA solicited comment on whether it would be appropriate to include an alternative standard in terms of VOC and asked that commenters submit data supporting the Deleted: includingPage 19 of 197 relationship between HAP and VOC. Comments the EPA received back on the proposed rule asked that the formaldehyde standards for rich burn engines be replaced with emission standards for THC. The EPA determined at the time that it was not appropriate to adopt an alternative standard in terms of THC (or VOC) for rich burn engines and discussed the reasons why in the 2010 responses

to comments. 2 Compliance with the formaldehyde standard in the rule is, therefore, currently demonstrated by initial and continuous performance testing for formaldehyde. On October 19, 2010, engine manufacturer Dresser-Waukesha submitted a petition for reconsideration of the formaldehyde requirements. The EPA granted the petition for reconsideration on January 5, 2011. (In addition, on November 3, 2010, the Engine Manufacturers Association submitted a petition for judicial review of these requirements.) In the petition for reconsideration, Dresser-Waukesha argued that formaldehyde is difficult and costly to measure. The petition requested that the HAP surrogate for 4SRB engines should be THC rather than formaldehyde. Dresser-Waukesha submitted data from testing it

2 Memorandum from Melanie King, EPA Energy Strategies Group to EPA Docket EPA-HQ-OAR-2008-0708. Response to Public Comments on Proposed National Emission Standards for Hazardous Air Pollutants for Existing Stationary Reciprocating Internal Combustion Engines Located at Area Sources of Hazardous Air Pollutant Emissions or Have a Site Rating Less Than or Equal to 500 Brake HP Located at Major Sources of Hazardous Air Pollutant Emissions. August 10, 2010. EPA-HQ-OAR-2008-0708-0557.Page 20 of 197 conducted illustrating that THC reduction across the catalyst is an appropriate surrogate for HAP reduction across the catalyst. 3 According to the petitioner, testing for THC is easier and less costly and would substantially reduce the burden of the rule for owners and operators of these engines. Testing for formaldehyde emissions could cost more than double that of testing for THC

emissions and on a nationwide basis the EPA estimates that replacing formaldehyde testing with THC testing would result in substantial compliance cost savings annually while achieving the

same reduction in HAP emissions.The EPA has reviewed the data submitted by DresserWaukesha. The data provided indicate that a strong relationship exists between percentage reductions of THC and percentage reductions of formaldehyde (the surrogate for HAP emissions in the NESHAP) on rich burn engines using non-selective catalytic reduction (NSCR). Data analyzed by the EPA indicate that if the NSCR is reducing THC by at least 30 percent from 4SRB engines, formaldehyde emissions are guaranteed to be reduced by at least 76 percent, which is the percentage reduction required for the relevant engines. Indeed, the percentage reduction of formaldehyde is invariably well above the 76 percent level, and is usually above 90 percent. Therefore, the EPA agrees with the

3 Letter from Dresser-Waukesha to Melanie King. Follow-up toNovember 18, 2010 Teleconference. December 6, 2010. EPA-HQ-OAR2008-0708-0662.Page 21 of 197 petitioner that for SI 4SRB engines using NSCR and meeting the NESHAP by showing a percentage reduction of HAP, it would be appropriate to allow sources to demonstrate compliance with the NESHAP by showing a THC reduction of at least 30 percent. Including an optional THC compliance demonstration option would reduce the cost of compliance significantly while continuing to

achieve the same level of HAP emission reduction because the emission standards would remain the same. Consequently, the EPA is proposing amendments to allow owners and operators of certain stationary 4SRB engines (i.e., the ones currently subject to a formaldehyde percent reduction requirement) to show compliance with an optional THC compliance demonstration option. The specific amendments the EPA is proposing are presented below.

2. Proposed Amendments The EPA is proposing to add an alternative method of demonstrating compliance with the NESHAP for stationary 4SRB non-emergency engines greater than 500 HP that are located at major sources of HAP emissions and for existing stationary 4SRB non-emergency engines greater than 500 HP that are located at

area sources of HAP emissions that choose to meet the formaldehyde percent reduction requirement of 76 percent or

more. Based on the arguments and evidence presented in the petition discussed above, the EPA is proposing to add aPage 22 of 197 compliance demonstration option for stationary 4SRB engines meeting a 76 percent or more formaldehyde reduction. The compliance demonstration option would be an alternative to the existing method of demonstrating compliance with the formaldehyde percent reduction standard, which is to test engines for formaldehyde. The alternative for owners and operators of 4SRB engines meeting a 76 percent or more formaldehyde reduction would be to test their engines for THC showing that the engine is achieving at least a 30 percent

reduction of THC emissions. Under the proposed amendments, existing and new stationary 4SRB engines greater than 500 HP and located at major sources would still be required to reduce formaldehyde emissions by 76 percent or more or limit the concentration of formaldehyde in the stationary RICE exhaust to 350 parts per billion by volume, dry basis or less at 15 percent oxygen (O 2 ). However, owners and operators choosing to meet the formaldehyde concentration limit would not have the THC demonstration compliance option, because EPA could not verify a clear relationship between concentrations of THC and concentrations of formaldehyde in exhaust from these SI 4SRB engines. For the reasons discussed in section II.C.1 of this preamble, the EPA is proposing that existing stationary 4SRB non-emergency engines greater than 500 HP located at area sources located in populated areas be subject to an equipmentPage 23 of 197 standard and required to install a catalyst. These engines would be subject to testing to demonstrate initially and on an ongoing basis that the catalyst is reducing CO by 75 percent or more, or alternatively that THC emissions are being reduced by 30 percent

or more. Owners and operators of existing stationary 4SRB engines less than or equal to 500 HP who are required to limit the concentration of formaldehyde in the stationary RICE exhaust to 10.3 parts per million by volume, dry basis (ppmvd) or less at 15 percent O 2 do not have the option to demonstrate compliance using THC and must continue to demonstrate compliance by testing for formaldehyde following the methods and procedures specified

in the rule. Owners and operators opting to use the THC compliance demonstration method must demonstrate compliance by showing that the average reduction of THC is equal to or greater than 30 percent. Owners and operators of 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions and demonstrating compliance by using the THC compliance demonstration option must conduct performance testing using Method 25A of 40 CFR part 60, appendix A – Determination of Total Gaseous Organic Concentration Using a Flame Ionization Analyzer. Measurements of THC at the inlet and the outlet of the NSCR must be on a dry basis and corrected to 15 percent O 2 orPage 24 of 197 equivalent carbon dioxide content. To correct to 15 percent O 2 , dry basis, owners and operators must measure oxygen using Method 3, 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00 (2005) and measure moisture using Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03. Because owners and operators are complying with a percent reduction requirement, the method used must be suitable for the entire range of emissions since pre and post-catalyst emissions must be measured. Method 25A is capable of measuring emissions down to 5 ppmv and is, therefore, an appropriate method for measuring THC emissions for compliance demonstration purposes. The EPA is allowing sources the option to meet a minimum THC percent reduction of 30 percent by using Method 25A of 40 CFR part 60, appendix A to demonstrate compliance with the formaldehyde percent reduction in 40 CFR part 63, subpart ZZZZ. B. Emergency Demand Response/Peak Shaving 1. Background This action also proposes to amend provisions in the RICE NESHAP that currently allow owners and operators to operate stationary emergency engines for up to 15 hours per year as part of a demand response program if the RTO or equivalent balancing authority and transmission operator have determined there are emergency conditions that could lead to a potential electrical blackout, such as unusually low frequency, equipment overload,Page 25 of 197 capacity or energy deficiency, or unacceptable voltage level. The final rule did not allow emergency engines to be used for purposes of peak shaving or other non-emergency purposes as part of a financial arrangement. These provisions were included in the RICE NESHAP when requirements for existing stationary CI engines were finalized on March 3, 2010 (75 FR 9648). Following the completion of that portion of the rule, the EPA received three main petitions for reconsideration. One petition was from CPower, Inc., EnergyConnect, Inc., EnerNOC, Inc., and Innoventive Power, LLC. (EnerNOC et al.)(EPA-HQ-OAR-2008-0708- 0404). Another petition was received from the Delaware Department of Natural Resources and Environmental Control (DE DNREC) (EPA-HQ-OAR-2008-0708-0400). The third petition was from the National Rural Electric Cooperative Association (NRECA) (OAR-2008-0708-0580). In addition to these main petitions the

EPA received a substantial number of letters from others in the electric generation industry. The petition from EnerNOC, et al., asked that EPA increase the period of time permitted for emergency demand response operation in the rule to 60 hours per year, or the minimum number of hours required by the emergency demand response program. By contrast, the DE DNREC petition asked EPA to reconsider the emergency demand response provision because of

the adverse effects that it believes would result from increasedPage 26 of 197 emissions from these engines. The petition from NRECA requested that the EPA eliminate the restriction on the use of stationary emergency engines for demand response purposes. The EPA granted the petitions from EnerNOC, et al., DE DNREC and NRECA, and issued a notice on December 7, 2010 (75 FR 75937), requesting comments on whether to amend the 15 hours per year limitation on the operation of stationary emergency RICE participating in emergency demand response programs.

The EPA received more than 120 comments from a number of different entities including various state agencies, utilities, electric cooperatives and industry organizations. Many commenters expressed that 15 hours per year is not sufficient to meet current emergency demand response requirements for participation. For example, several emergency demand response programs have ISO tariff requirements greater than 15 hours per year, including the Electric Reliability Council of Texas emergency demand response program, which has a tariff requirement of 24 hours per year; the Pennsylvania Jersey Maryland (“PJM”) Interconnection, known as the Emergency Load Response Program, which has a tariff requirement of 60 hours per year; and the ISO New England (“ISO-NE”), which forecasts that backup resources would be expected for 55 hours over a 12-month period. Tariff requirements are developed to specify the mandatory time load resources (engines) must be willing and ablePage 27 of 197 to operate if the units are enrolled in the program. Conversely, some commenters urged the EPA to allow stationary emergency engines to only operate during true emergencies or when voltage or frequency varies beyond specified parameters. Based on the EPA’s review of the petitions and comments that the EPA has received, the EPA has found it appropriate to propose to amend the current rule to increase the allowance for stationary emergency engine participation in emergency demand response programs to up to 100 hours per year, which would be included as part of the pre-existing allowance of 100 hours for owners of emergency engines to test and maintain their emergency engines. The EPA believes that the emergency demand response programs that exist across the country are important programs that protect the reliability and stability of the national electric service grid. Allowing stationary emergency engines to operate as part of emergency demand response programs can help prevent grid failure or blackouts, by allowing these engines to be used in circumstances of grid instability prior to the occurrence of blackouts. Preventing stationary emergency engines from being able to qualify and participate in emergency demand response programs without having to apply aftertreatment could force owners and operators to leave their engines out of these programs, which will impair the ability of ISOs and RTOs to use these relatively small, quick-starting and reliable sources ofPage 28 of 197 energy to protect the reliability of their systems. The EPA does not wish to potentially jeopardize electrical reliability or create a disincentive for stationary emergency engines to participate in these programs. The circumstances during which the EPA would allow stationary emergency engines to operate for emergency demand response purposes include periods during which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency, plus during periods where there is a deviation of voltage or frequency of 5 percent or more below standard voltage or frequency. During EEA Level 2 alerts there is insufficient energy supply and a true potential for electrical blackouts. System operators must call on all available resources during EEA Level 2 alerts in order to stabilize the grid to prevent failure. Therefore, this situation is a good indicator of severe instability on the system. Consistent normal voltage provided by the utility is often called power quality and is an important factor in local electric system reliability. Reliability of the system requires electricity being provided at a normal expected voltage. The

American National Standards Institute standard C84.1-1989 defines the maximum allowable voltage sag at below 5 percent. OnPage 29 of 197 the local distribution level local voltage levels are therefore important and a 5 percent or more change in the normal voltage or frequency is substantial and an indication that additional resources are needed to ensure local distribution system reliability. This situation would be indicative of severe instability on the system. Emergency demand response programs rely on agreements under which owners of engine agree to make their engines available to be called upon for a specific number of hours per year, as required by the relevant ISO or RTO tariff, under specified circumstances considered to indicate emergencies. In order to be enrolled in an emergency demand response program, participants must qualify their engines and must be able to use their emergency engines for the number of hours the program requires. Engines are not generally called upon for the maximum hours required by the tariffs. However, even though the engine may not be called at all or may run for fewer hours than the program requires it to be available in a particular year, the engine

must still be available for those theoretical number of hours in order to join the program. Demand response contracts require more hours than the 15 hours per year that is currently in the regulations, and the commenters state that the 15 hours per year is not a sufficient amount of time to ensure the reliability of the program; some programs require up to 60 hours per year, asPage 30 of 197 discussed earlier in this preamble. For these reasons, the EPA believes it is appropriate to allow additional hours for emergency demand response operation in order for such programs to be accessible to stationary emergency engines. Consequently, the EPA is proposing amendments to the rule to increase the limitation on emergency demand response operation to 100 hours per year for stationary emergency engines. It is expected that owners and operators of stationary emergency engines that seek to qualify their units as demand resources would with the proposed increase to 100 hours per year be able to meet the operational and qualification requirements of the different ISOs and RTOs in the country. As stated, stationary emergency engines that participate in demand response programs may not be called upon at all, but must nonetheless be available to operate for the required amount stipulated by the specific program. The purpose of the limited allowance for emergency demand response is to respond to emergencies, and the EPA is persuaded by the information that has been submitted that 15 hours per year is an insufficient amount of time to allow for emergency demand response needs, given past experience. The EPA believes 100 hours per year is sufficient to cover any potential demand response operation as well as the required maintenance and testing that is also included within the 100 hours of operation.Page 31 of 197 The EPA has previously determined that stationary emergency engines typically operate well below 50 hours per year and more commonly about 1 to 2 hours per month. A survey conducted by the California Air Resources Board (CARB) indicated the average yearly operation for emergency diesel engines was 31 hours over a period of 3 years. The majority of those hours were for the purpose of maintenance and testing; less than 5 hours was for interruptible service contracts, and the remaining amount for emergency/standby operation (EPA-HQ-OAR-2005-0029-0011). Data from demand response programs in ISO-NE and PJM territories show that backup generation was dispatched for less than 30 hours during the summers of 2008, 2009 and 2010. 4 However, again, emergency units must be available to operate more than that in most cases to qualify for demand response programs. For instance, PJM requires a minimum ISO tariff of 60 hours per year of engine availability for program participation. Consequently, in order to ensure that a sufficient amount of operating time is available for maintenance and readiness testing, and for demand response operation, the EPA is proposing 100 hours of operation. A number of commenters requested that an allowance of 100 hours per year be allowed in order to provide adequate hours consistent with minimum required

4 Memorandum from Stacy Angel, Synapse Energy Economics, Inc. to Doug Hurley, Synapse Energy Economics. Sample Revenue for a 1 MW Backup Generation Unit. June 27, 2011.Page 32 of 197 hours that customers must be available to operate and to address local distribution system emergencies. For instance, in Hawaii, the emergency demand response program operated by the Hawaiian Electric Company requires that emergency engines be able to operate for 100 hours per year in the event of an emergency in order to participate in the program. In order to provide a

sufficient amount of time to cover annual maintenance and testing, which is typically more than 20 hours per year according to the survey conducted by CARB (see EPA-HQ-OAR-2005- 0029-0011), plus to cover hours necessary for qualifying for emergency demand response programs or local distribution system emergencies, EPA believes an allowance of 100 hours per year would be appropriate for these activities. Taking into account that there may be situations where annual maintenance and testing could exceed the typical 1 to 2 hours per month and accounting for other emergency demand response programs that require more than 60 hours per year for program participation (e.g., the Hawaiian Electric Company), the EPA believes that 100 hours per year is appropriate for emergency demand response plus maintenance and testing. The proposed amendment to the rule would mean that stationary emergency engines could operate for a total of 100 hours per year for emergency demand response operation as part of the 100 hours already permitted for maintenance and readinessPage 33 of 197 testing while maintaining their status as emergency units, rather than non-emergency units, and continue to meet the requirements that apply to emergency engines. On the issue of peak shaving and non-emergency demand response, the EPA is proposing to include a temporary limited allowance for peak shaving and other types of non-emergency use as part of a financial arrangement for existing stationary emergency engines at area sources of HAP, if the peak shaving is done as part of a peak shaving (or load management) program with the local distribution system operator. The power generated under this allowance can only be used at the facility or towards the local system. The EPA has determined that it is appropriate to include the option for existing stationary emergency engines at area sources to operate for a small number (50) of hours per year for any non-emergency reason and not be penalized or considered a non-emergency engine and subsequently required to install aftertreatment that could be prohibitively costly for these sources in the near term. The EPA is proposing that the 50-hour allowance for peak shaving for emergency engines at area sources be allowed for a limited period of time, but then removed after April 16, 2017. The peak shaving would also be limited to operation as part of a peak shaving (load management program) with the local distribution system operator. Owners would stillPage 34 of 197have the pre-existing 50 hours per year allowance for nonemergency operation after April 16, 2017, but those 50 hours could no longer be used for peak shaving. The temporary allowance for peak shaving would give sources an additional resource for maintaining reliability while facilities are coming into compliance with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units (77 FR 9304). While the EPA does not expect the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units to cause regional reliability problems, this limited allowance would allow the owners and operators of these engines more flexibility to run reliability critical units in order to minimize potential grid-related interruptions as coal- and oil-fired baseload power plants may be temporarily shut down to install emission controls to comply with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units. Including this allowance is important for small electric cooperatives and other entities located at area sources that use these engines to maintain voltage and electric reliability. Many rural electric cooperatives enter agreements with owners of small emergency engines and rely on the engines to reduce demand on the central power supply during periods of high demand, which reduces the cost of power during periods of high demand for the members of the cooperative. Commenters promoting the continued use of peak shaving programs said that maintaining the cost ofPage 35 of 197 power as low as possible is important across the country, but is particularly of significant importance to rural electric cooperatives that, according to the commenter, service customers in the most economically depressed areas of the country, where options are the most limited. The commenters argued that if small emergency engines would no longer be permitted to operate for peak shaving purposes without having to be reclassified as non-emergency engines and subsequently subject to costly emissions controls, owners could no longer afford to participate in such programs. Cooperatives argued that this would lead to increased costs that would ultimately be passed along to the customers. Commenters also maintained that keeping peak shaving programs would not lead to additional public health risks or emissions because the operation for peak shaving is minimal. If peak shaving is not allowed under the rule, commenters said that this would lead to an increase in central power station capacity and possibly more transmission and distribution line capacity to accommodate the increase in demand resulting from eliminating small emergency engines from being used. This could lead to a larger impact on the environment and public health than allowing a small number of hours for peak shaving purposes. Certain small and remote facilities also rely on financial programs to generate additional income in order to maintain their engines and stay in operation. The additional funds can be essential forPage 36 of 197 many smaller facilities and operations. Providing a limited allowance for peak shaving and non-emergency demand response could generate sufficient income to prevent small facilities and owners from ceasing operation where these engines are in service. In order to further limit the operation of these engines to small, remote facilities, the EPA is proposing that the power generated under this allowance can only be used at the facility or towards the local system. In addition, while the EPA is proposing this allowance until the end of April 16, 2017, the EPA does not believe it is appropriate to continue the program beyond that time. Generators receive considerable compensation for their availability in peak shaving programs and the EPA believes that it is not appropriate to allow these engines to continue receiving compensation for this non-emergency use beyond 2017 without having to reduce their emissions. The generators must by that time decide whether to restrict their use to emergency or limited non-compensated non-emergency use or to reduce the emissions from their engines. The EPA also encourages engine owners and operators, as well as larger system planners, to consider the use of alternative peak shaving options, such as load curtailments, lower emitting distributed generation, combined heat and power, and reduced line losses on the electricity grid.Page 37 of 197 The previous estimate of emissions from stationary emergency engines is not expected to change due to this proposed limited allowance. To estimate emissions from stationary emergency engines, the EPA has previously estimated that emergency engines would on average operate for 50 hours per year. There is a wide range in how much these engines operate (some well below 50 hours per year), but on average and to be conservative, the EPA believes that 50 hours per year is still representative and consequently the environmental impact the EPA has calculated previously remains appropriate. In consideration of all these issues, the EPA is proposing amendments to the rule to provide a limited allowance for peak shaving for existing stationary emergency engines at area sources of HAP. The specific amendments the EPA is proposing are discussed below. 2. Proposed Amendments a. Emergency Demand Response. Based on the discussion in section II.B.1 of this preamble, the EPA is proposing to revise the current provisions for stationary engines used for emergency demand response operation. The provisions the EPA is proposing to amend are in §§63.6640(f) and 63.6675 of 40 CFR part 63, subpart ZZZZ. Currently, §63.6640(f)(1)(iii) allows a maximum of 15 hours per year to be spent towards demand response operation under certain qualifying conditions. Also, §63.6640(f)(1)(ii) currently includes an allowance of 100 hours per year forPage 38 of 197 purposes of maintenance checks and readiness testing. The EPA is proposing that owners and operators of stationary emergency RICE be permitted to operate their engines as part of an emergency demand response program within the 100 hours per year that is permitted for maintenance and testing in §63.6640(f)(1)(ii). Owners and operators of stationary emergency engines can operate for emergency demand response during periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an EEA Level 2 as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency and during periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. The hours spent for emergency demand response operation are added to the hours spent for maintenance and testing purposes and counted towards the 100 hours per year. If the total time spent for demand response operation and maintenance and testing exceeds 100 hours per year the engine will not be considered an emergency engine under this subpart and will need to meet all requirements for non-emergency engines. The EPA is recognizing that these engines may be called to operate not only by the regional transmission operator or equivalent to maintain the reliability of the bulk power system,Page 39 of 197 but also by the local transmission and distribution system operators to support the local power systems. For stationary emergency engines above 500 HP that were installed prior to June 12, 2006, there is currently no emergency demand response allowance and there is no time limit on the use of emergency engines for routine testing and maintenance in §63.6640(f)(2)(ii). Those engines were not the focus of the 2010 RICE NESHAP amendments; therefore, the EPA did not make any changes to the requirements for those engines as part of the 2010 amendments. For consistency, the EPA is now also proposing that owners and operators of stationary emergency engines installed prior to June 12, 2006, be permitted to operate their engines as part of a demand response program as well for a total of 100 hours per year, including time spent for maintenance and testing. The EPA is also proposing to amend the NSPS for stationary CI and SI engines in 40 CFR part 60, subparts IIII and JJJJ, respectively, to provide the same allowance for stationary emergency engines for emergency demand response operation as for engines subject to the RICE NESHAP. The NSPS regulations currently do not include such an allowance for emergency demand response operation. For the reasons discussed in section II.B of this preamble as to why the EPA finds it appropriate to allow stationary emergency engines to participate in emergency demand Comment [A10]: The regulatory text at 60.4211(f) does not match this – see the suggested edit.Page 40 of 197 response programs and remain being considered emergency units, and for consistency across engine regulations, the EPA is proposing to add an emergency demand response allowance under the NSPS regulations. Consequently, the EPA is proposing to revise the existing language in §§60.4211(f) and 60.4219 of 40 CFR part 60, subpart IIII, and §§60.4243(d) and 60.4248 of 40 CFR part 60, subpart JJJJ, to specify that emergency engines may participate in demand response programs for up to 100 hours per year, including hours spent towards maintenance and testing of the emergency engines. b. Peak Shaving and other Non-emergency Use as Part of a Financial Arrangement. In addition to the changes the EPA is proposing related to emergency demand response operation, the EPA is also including a further provision for owners and operators of existing stationary emergency RICE located at area

sources for the reasons discussed in section II.B.1 of this preamble. Paragraph §63.6640(f) currently allows owners and operators of emergency stationary RICE to operate their engine for 50 hours per year in non-emergency situations. As currently written, the 50 hours per year for non-emergency situations cannot be used for peak shaving or to generate income for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity; except that owners and operators of certain emergency enginesPage 41 of 197 may operate the engine for a maximum of 15 hours per year as part of an emergency demand response program. As discussed, the 15 hours per year allowance for emergency engines to participate in emergency demand response programs is being increased to 100 hours per year, but will also include hours spent towards maintaining and conducting readiness testing of the emergency engines. However, additionally, the EPA is also proposing that stationary emergency engines located at area sources be permitted to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any non-emergency operation, including operation as part of a financial agreement with another entity. The peak shaving allowance would expire in 2017. The EPA is specifying that the power can only be used at the facility or towards the local system, and the engine can only be operated for peak shaving as part of a program with the local distribution system operator. The EPA is also clarifying that an engine that exceeds the calendar year limitations on non-emergency operation, including emergency demand response or peak shaving, will be considered anon-emergency engine and subject to the requirements for nonemergency engines for the remaining life of the engine. C. Non-Emergency Stationary SI RICE Greater than 500 HP Located

at Area Sources 1. BackgroundPage 42 of 197 The EPA is also proposing to amend the requirements that apply to existing stationary non-emergency 4 stroke SI RICE greater than 500 HP located at area sources of HAP emissions, which are generally natural gas fired engines. Currently, the RICE NESHAP requires owners and operators of such engines to 1) either meet a CO concentration limit of 47 parts ppmvd at 15 percent O 2 or reduce emissions of CO by 93 percent or more, if the engines are 4SLB; and 2) to meet a formaldehyde concentration limit of 2.7 ppmvd at 15 percent O 2 or reduce formaldehyde emissions by 76 percent or more, if the engines are 4SRB. In both cases, the EPA expects that the standards would be met using aftertreatment; oxidation catalysts for 4SLB engines and NSCR for 4SRB engines. In addition to these emission requirements, owners and operators of existing stationary 4- stroke engines greater than 500 HP at area sources are also subject to monitoring, testing, recordkeeping and reporting requirements. After the final requirements for existing stationary SI engines greater than 500 HP at area sources were published on August 20, 2010 (75 FR 51570), the EPA received petitions from Exterran (EPA-HQ-OAR-2008-0708-0581), the American Petroleum Institute (EPA-HQ-OAR-2008-0708-0582), the Interstate Natural Gas Association of America (EPA-HQ-OAR-2008-0708-0584), and the Gas Processors Association (EPA-HQ-OAR-2008-0708-0587)Page 43 of 197 requesting that the EPA reconsider the requirements of the final rule. The petitioners expressed many similar concerns. As relevant to this rulemaking, petitioners stated that the EPA did not take into account the difference in population density and subsequently did not consider the difference in health impacts in remote versus more heavily populated locations. In the petitioners’ opinion, there should be less concern about engines that are located farther away from people; the petitioners believed that the EPA has substantial latitude in requiring less stringent standards for owners and operators of stationary engines in remote areas.

While the EPA does not share all of the views of the petitioners regarding the difference between engines based on their location, the EPA does believe that it is reasonable to create a subcategory of existing stationary SI 4SLB and 4SRB engines above 500 HP located in areas remote from human activity. Engines located in remote areas that are not close to significant human activity may be difficult to access, may not have electricity or communications, and may be unmanned most of the time. The costs of the emission controls, testing, and continuous monitoring requirements may be unreasonable when compared to the HAP emission reductions that would be achieved, considering that the engines are in sparsely populated areas. The EPA believes that establishing a subcategory for SI engines Comment [A11]: Can EPA please explain its discretion and authority to establish subcategories based on geographic or cost considerations?Page 44 of 197 at area sources of HAP located in sparsely populated areas accomplishes the agency’s goals and is adequate in protecting public health. The EPA is proposing to subcategorize sparsely populated engines using the existing DOT pipeline classification system. This system classifies locations based on their distance to pipelines covered by the Pipeline and Hazardous Materials Safety Administration safety regulations. The DOT system defines a class location unit as an onshore area that extends 220 yards or 200 meters on either side of the centerline of any continuous 1- mile (1.6 kilometers) length of pipeline. The DOT approach further classifies pipeline locations into Class 1 through Class 4 locations based on the number of buildings intended for human occupancy. A Class 1 location is defined as an offshore area or any class location unit that has 10 or fewer buildings intended for human occupancy. Stakeholders from the oil and gas industryhave indicated to the EPA that the DOT system is wellestablished and there would be substantial overlap between engines affected by the rule and covered by the DOT pipeline classification system. Incorporating this approach would also

create harmonization between the EPA and DOT and would reduce the implementation and enforcement burden for states. Implementation for affected sources would also be less burdensome because the system is already in place and used byPage 45 of 197 industry and covers the majority of these engines. Stakeholders have indicated they are required to review the class location status of pipeline segments annually. The EPA believes this approach is reasonable for defining the subcategory of remote engines for those engines that are associated with DOT-regulated pipelines. For those engines not associated with pipelines, the EPA is using similar criteria. An engine would be considered to be in sparsely populated areas if within 0.25 mile radius of the engine there are 5 or fewer buildings intended for human

occupancy. The EPA is proposing management practices as generally available control technologies for existing stationary SI 4SLB and 4SRB area source non-emergency engines located in sparsely populated areas. Given the remote location of the engines from human activity, the EPA believes that it is appropriate not to include requirements that would necessitate aftertreatment and extensive testing and monitoring. The EPA has previously estimated that the costs of oxidation catalyst for existing 4SLB and 4SRB engines above 500 HP at area sources are $310 and $150 million, for capital and annual costs, respectively. The capital and annual costs of the RICE NESHAP for existing 4SLB and 4SRB engines above 500 HP at area sources would be $30 million and $12 million, respectively, if these proposed amendments are incorporated into the rule. Creating a subcategory of thesePage 46 of 197 engines for the ones located in sparsely populated areas and not mandating emission controls would significantly reduce the cost of the rule for such engines.For existing stationary SI 4SLB and 4SRB area source nonemergency engines that are located in populated areas, the EPA is proposing an equipment standard that requires the installation and operation of a catalyst that will have to be tested initially and annually to ensure that the catalyst is working properly and reducing emissions as required. In addition, these units will be required to have devices to shut down the engine if the catalyst is exposed to dangerous temperatures or have continuous monitoring equipment installed to record catalyst inlet temperatures. The EPA is proposing shorter test duration and less rigorous methods than currently required while still ensuring that HAP reductions remain at expected levels for these engines located in populated areas. The specific amendments the EPA is proposing are discussed

below. 2. Proposed Amendments Owners and operators of engines in sparsely populated areas would have to conduct a review of the surrounding area every 12 months to determine if the nearby population has changed. If the engine no longer meets the criteria for a sparsely populated area the owner and operator must within 1Page 47 of 197 year comply with the emission standards specified below for populated areas. Owners and operators of existing stationary 4SLB and 4SRB greater than 500 HP at area sources that are in sparsely populated areas as described above would be required to perform the following:

 Change oil and filter every 1,440 hours of operation or annually, whichever comes first;

 Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary;

and

 Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as

necessary. Sources have the option to use an oil analysis program as described in §63.6625(i) of the rule in order to extend the specified oil change requirement. The oil analysis must be performed at the same frequency specified for changing the oil in Table 2d of the rule. The analysis program must at a minimum analyze the following three parameters: Total Acid Number, viscosity, and percent water content. The condemning limits for these parameters are as follows: Total Acid Number increases by more than 3.0 milligrams of potassium hydroxide per gram from Total Acid Number of the oil when new; viscosity of the oil has changed by more than 20 percent from the viscosity of the oilPage 48 of 197 when new; or percent water content (by volume) is greater than 0.5. If all of these condemning limits are not exceeded, the engine owner or operator is not required to change the oil. If any of the limits are exceeded, the engine owner or operator must change the oil within 2 days of receiving the results of the analysis; if the engine is not in operation when the results of the analysis are received, the engine owner or operator must change the oil within 2 days or before commencing operation, whichever is later. The owner or operator must keep records of the parameters that are analyzed as part of the program, the results of the analysis, and the oil changes for the engine. The analysis program must be part of the maintenance plan for the engine. Owners and operators of existing stationary 4SLB and 4SRB area source engines above 500 HP in sparsely populated areas would also have to operate and maintain the stationary RICE and aftertreatment control device (if any) according to the manufacturer's emission-related written instructions or develop their own maintenance plan which must provide to the extent practicable for the maintenance and operation of the engine in a manner consistent with good air pollution control practice for minimizing emissions. For engines in populated areas, i.e., existing stationary 4SLB and 4SRB non-emergency engines greater than 500 HP at areaPage 49 of 197 sources that are located on DOT Class 2 through Class 4 pipeline segments or, for engines not associated with pipelines, that do not meet the 0.25 mile radius with 5 or less buildings criteria, the EPA is proposing to adopt an equipment standard requiring the installation of a catalyst to reduce HAP emissions. Owners and operators of existing area source 4SLB non-emergency engines greater than 500 HP in populated areas would be required to install an oxidation catalyst. Owners and operators of existing area source 4SRB non-emergency engines greater than 500 HP in populated areas would be required to install NSCR. Owners and operators must conduct an initial test to demonstrate that the engine achieves at least a 93 percent reduction in CO emissions or a CO concentration level of 47 ppmvd at 15 percent O 2 , if the engine is a 4SLB engine. Similarly, owners and operators must conduct an initial performance test to demonstrate that the engine achieves at least a 75 percent CO reduction or a 30 percent THC reduction, if the engine is a 4SRB engine. The

initial test must consist of three test runs. Each test run must be of at least 15 minute duration, except that each test run conducted using the proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the method and include at least 2 minutes of test data phase measurement. To measure CO, emission sources must use the CO methods already specified in subpart ZZZZ, or the proposedPage 50 of 197 appendix A to 40 CFR part 63, subpart ZZZZ. The THC testing must be conducted using EPA Method 25A. The owner or operator of both engine types must also use a high temperature shutdown device that detects if the catalyst inlet temperature is too high, or, alternatively, the owner or operator can monitor the catalyst inlet temperature continuously and maintain the temperature within the range specified in the rule. For 4SLB engines the catalyst inlet temperature must remain at or above 450°F and at or below 1,350°F. For 4SRB engines the temperature range must be greater than or equal to 750°F and less than or equal to 1,250°F at the catalyst inlet. Owners and operators must in addition to the initial performance test conduct annual checks of the catalyst to ensure proper catalyst activity. The annual check of the catalyst must at a minimum consist of one 15-minute run using the methods discussed above, except that each test run conducted using the proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the method and include at least 2 minutes of test data phase measurement. Owners and operators of 4SLB engines must demonstrate during the catalyst activity test that the catalyst achieves at least a 93 percent reduction in CO emissions or that the engine exhaust CO emissions are no more than 47 ppmvd at 15 percent O 2 . Owners and operators of 4SRB engines must demonstrate that their catalystPage 51 of 197 is reducing CO emissions by 75 percent or more, or alternatively, that THC emissions are being reduced by at least 30 percent during the catalyst activity check. If the emissions from the engine do not exceed the levels required for the initial test or annual checks of the catalyst, then the catalyst is considered to be working properly. If the emissions exceed the specified pollutant levels in the rule, the exceedance(s) is/are not considered a violation, but the owner or operator would be required to shut down the engine and take appropriate corrective action (e.g., repairs, clean or replace the catalyst, as appropriate). A follow-up test must be conducted within 7 days of the engine being started up again to demonstrate that the emission levels are being met. If the retest shows that the emissions continue to exceed the specified levels, the stationary RICE must again be shut down as soon as safely possible, and the engine may not operate, except for purposes of start-up and testing, until the owner/operator demonstrates through testing that the emissions do not exceed the levels specified. D. Stationary Agricultural RICE in San Joaquin Valley In the 2010 amendments to the RICE NESHAP, the EPA required existing non-emergency CI engines above 300 HP to meet a standard of either 70 percent reduction of CO emissions or 49 ppmvd CO, for engines between 300 and 500 HP, or 23 ppmvd CO forPage 52 of 197 engines above 500 HP. The requirements also included testing and monitoring provisions. As with all requirements for existing engines in that rule, owners and operators were required to meet the requirements within 3 years of the effective date of the regulations (May 3, 2013). Since the finalization of the rule for existing stationary CI engines, stakeholders from the agricultural industry in the San Joaquin Valley area of California have expressed concern regarding the effect of certain of these requirements on engines in the San Joaquin Valley. The San Joaquin Valley Air Pollution Control District (APCD) has indicated that there are 17 stationary CI engines at area sources in San Joaquin Valley certified to the Tier 3 standards in 40 CFR part 89 that were installed between January 1 and June 12, 2006. Under the NESHAP, stationary CI engines at area sources are existing if construction of the engine commenced prior to June 12, 2006. These 17 Tier 3 engines in the San Joaquin Valley, which were built to meet stringent emission standards, would not be able to comply with the applicable RICE NESHAP emission standards for existing engines without further testing and monitoring, and possible retrofit with further controls, due to differences in the emission standards and testing protocols in the RICE NESHAP versus the Tier 3 standards in 40 CFR part 89. However, an identical engine certified to the Tier 3 standards (or Tier 2Page 53 of 197 standards for engines above 560 kilowatts (kW)) in 40 CFR part 89 that was installed after June 12, 2006, would not have to be retrofit in order to comply with the NESHAP. Stationary CI engines installed after June 12, 2006, at area sources of HAP are required to comply with the NSPS for stationary CI engines, which requires engines to be certified to the standards in 40 CFR parts 89, 94, 1039, and 1042, as applicable. Thus, a 2006 model year stationary CI engine installed after June 12, 2006, that is certified to the applicable standards would meet the requirements of the NESHAP without further controls or testing. While the EPA does not know if other certified Tier 3 engines besides these 17 engines in the San Joaquin Valley were installed prior to June 12, 2006, EPA believes the same rationale should apply to any such engine. The EPA believes that the Tier 3 standards (Tier 2 for engines above 560 kW) are technologically stringent regulations and believes it is unnecessary to require further regulation of engines meeting these standards. Engines meeting the Tier 3 standards typically employed emission control technologies such as combustion optimization and better fuel control to meet the Tier 3 standards. In order to address the concerns raised by the engine owners in the San Joaquin Valley, the EPA is proposing changes to amend the requirements for any certified Tier 3 (Tier 2 for engines above 560 kW) stationary CI engine located at anPage 54 of 197 area source and installed before June 12, 2006. The EPA is proposing amendments to specify that any existing certified Tier 3 (Tier 2 for engines above 560 kW) CI engine that was installed before June 12, 2006, is in compliance with the NESHAP. This amendment would include any existing stationary Tier 3 (Tier 2 for engines above 560 kW) certified CI engine located at an area

source of HAP emissions. Another concern brought to the EPA’s attention by the San Joaquin Valley agricultural industry is that due to state and local requirements in the San Joaquin Valley, many of the Tier 1 and Tier 2 stationary CI engines that are regulated as existing sources under the NESHAP must be replaced in the next few years, only a short time after the emission standards for existing engines must be met. Specifically, the San Joaquin Valley APCD rule for internal combustion engines (Rule 4702) requires Tier 1 and Tier 2 certified engines to meet Tier 4 standards by January 1, 2015, or 12 years after the installation date, but no later than June 1, 2018. The concern is that owners and operators of these engines would have to install aftertreatment by 2013 to meet the emission standards of the RICE NESHAP and then only a few years later be required to replace their engines per San Joaquin Valley APCD Rule 4702. The San Joaquin Valley APCD has identified 49 Tier 1 engines and 360 Tier 2 engines that are scheduled to be replaced under the local rule. The EPA has notPage 55 of 197 identified any engines outside the San Joaquin Valley APCD area that are in the same or similar situation (i.e., required to be replaced shortly after the compliance date for existing engines), but the EPA does not preclude the possibility that there are such engines in other areas, and requests comment and information on other areas that may have similar concerns. The EPA does not think it is appropriate to require emission controls on a stationary CI engine that is going to be retired only a short time after the rule goes into effect. Stationary CI engines would have to comply with this rule by May 3, 2013, and owners of engines above 300 HP are expected to have to install aftertreatment on their engines in order to meet the

emission standards. The EPA estimates that the one-time cost to equip a 500 HP stationary CI engine with the controls necessary

to meet the emission standards under this rule is close to $14,000 and more than $3,000 on a yearly basis, not accounting for additional costs associated with monitoring, testing, recordkeeping and reporting. These engines (equipped with aftertreatment) could end up being in operation for less than 2 years or at most only 5 years before having to be replaced with a certified Tier 4 engine, as required by San Joaquin Valley District Rule 4702. It would not be reasonable to require the engine owner to invest in costly controls and monitoringPage 56 of 197 equipment for an engine that will be replaced shortly after the

installation of the controls. Consequently, the EPA is proposing amendments to existing stationary CI engines located at area sources of HAP emissions to address this concern. The EPA is proposing to amend the requirements for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are greater than 300 HP that are subject to a state or local rule that requires the engine to be replaced. The EPA is proposing to allow these engines to meet management practices for a period of 2 years starting with the applicable May 3, 2013, compliance date. The EPA believes a period of 2 years is appropriate and provides owners enough time to replace their engines without mandating a possibly cost prohibitive requirement to change all of the engines in a short amount of time, while still requiring that replacement of the engine or a retrofit of the engine occur relatively quickly after the owner would have to comply with the NESHAP. The EPA is proposing that these engines be subject to management practices until May 3, 2015, after which time the CO emission standards discussed above (and that are in Table 2d of the rule) apply. The management practices include requirements for when to inspect and replace the engine oil and filter, air cleaner, hoses and belts. The complete details of which management practices are required are shown in Table 2d of thePage 57 of 197 rule. Owners and operators of these existing stationary CI engines located at area sources of HAP emissions that intend to meet management practices rather than the emission limits prior to May 3, 2015, must submit a notification by March 3, 2013, stating that they intend to use this provision and identifying the state or local regulation that the engine is subject to.

E. Remote Areas of Alaska 1. Background The RICE NESHAP currently specifies less stringent requirements for existing non-emergency CI engines at area

sources located in remote areas of Alaska. Remote areas are defined as those not accessible by the FAHS. The FAHS includes areas with year-round ferry service that are not on the contiguous road system. Under the current regulation, stationary non-emergency CI engines at area sources in areas of Alaska that are not accessible by the FAHS are subject to management practices as opposed to numerical emission standards. Following the publication of the final rule in 2010, the EPA received requests to expand the definition of remote areas

of Alaska. Stakeholders asserted that facilities in areas that are accessible by the FAHS but are not connected to the Alaska Railbelt grid face the same challenges as those in areas not accessible by the FAHS. The Alaska Railbelt Grid refers to the service areas of the six regulated public utilities that extendPage 58 of 197 from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are the Golden Valley Electric Association, Chugach Electric Association, Matanuska Electric Association, Homer Electric Association, Anchorage Municipal Light & Power, and the City of Seward Electric System. According to the stakeholders, one reason for broadening the definition of remote areas in Alaska is high energy costs, which provide a natural incentive to run CI engines as little as possible. The cost of energy is utilities’ greatest concern in Alaska. Also, the stakeholders

indicated that extreme weather conditions in certain areas of Alaska is another reason for including additional areas in the

definition of remote areas of Alaska. The climate issue is unique to remote areas of Alaska that experience some of the most extreme temperatures in the country. Heavy snowfall and high winds are not uncommon in several areas that are accessible by the FAHS. For instance, Copper Valley Electric Association (CVEA) is a utility accessible by the FAHS, but it includes areas that face the same challenges as other communities not accessible by the FAHS. The utility operates on an isolated grid and relies on diesel power generation. In one of CVEA’s territories, Valdez, Alaska, CVEA indicated that this area experiences brutal conditions and stated that Valdez is considered to have the greatest snowfall (326 inches per winter) in any city of the United States. Also, winds at more than 100Page 59 of 197 miles per hour are not uncommon for Valdez, Alaska, according to CVEA. Temperatures between 40 and 50 below zero are also not abnormal, which emphasizes the extreme reliance on power, CVEA asserted. Travel times and accessibility are issues on a regular basis, but can be additionally exacerbated due to severe weather, which in some cases may lead to avalanches and road closings. In particular, even if a site is on the FAHS, in the event of poor weather conditions and road closings, there are in many cases no alternate roads to travel on. Further, access to specific isolated sites can also be problematic in particular remote areas of Alaska and the problems are unique to Alaska because of the infrastructure and environment. For example, communities made the case that sources along the AMHS that are only accessible by the AMHS should be treated the same way as communities not accessible by the FAHS. The AMHS primarily serves passengers and vehicles, and is not intended for transporting goods. Therefore, the same methods used to bring in goods to communities not on the FAHS are the same as those Alaskan villages served only by the AMHS. Goods are typically brought in to remote communities by barge and this is another example of a scenario that is unique to Alaska. Other arguments for expanding the definition of remote areas of Alaska beyond those not accessible by the FAHS include very low population density in many other remote areas although accessible by thePage 60 of 197 FAHS, and the fact that many of these areas are not connected to the electric grid and rely on back up diesel generation to support fluctuating renewable energy systems. The energy supply system is another area that is particularly different in Alaska compared to the rest of the country where the majority of customers are connected to the grid. Therefore, for the reasons discussed, the EPA is proposing expansion of the remote area source category. This proposal is supported by the Alaska Department of Environmental Conservation and communities with

whom the EPA has discussed this issue. 2. Proposed Amendments The EPA is proposing to expand the current definition of remote areas of Alaska to extend beyond areas that are not accessible by the FAHS. Specifically, the EPA is proposing that areas of Alaska that are accessible by the FAHS and that meet all of the following criteria are also considered remote and subject to management practices under the rule:

 The stationary CI engine is located in an area not connected to the Alaska Railbelt Grid,

 At least 10 percent of the power generated by the engine per year is used for residential purposes, and

 The system capacity is less than 12 megawatts, or the engine is used exclusively for backup power for renewablePage 61 of 197 energy and is used less than 500 hours per year on a 10- year rolling average. The EPA is proposing limiting the remote classification to engines that are used at least partially for residential purposes, where the impact of higher energy costs is of greatest

concern. The classification is further limited to sources that are used infrequently as backup for renewable power, or that are at smaller capacity facilities, which are generally in more sparsely populated areas.

F. Miscellaneous Corrections and Revisions The EPA is making some minor corrections to the stationary engine rules to address miscellaneous issues. The EPA is making

some minor revisions in the rules to correct mistakes in the current rules or to clarify the rules. The revisions are as

follows:

 Revising Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ to correct language requiring the pressure drop to be at plus or minus 10 percent 100 percent load for all engines. The engines that were regulated in 2010 are not subject to the load requirements and therefore the EPA is correcting

these tables to make this clear.

 Adding a footnote to Table 1b of 40 CFR part 63, subpart ZZZZ stating that sources can petition the AdministratorPage 62 of 197 for a different temperature range consistent with Table 2b

of the rule.

 Correcting rows 8 and 10 in Table 2d of 40 CFR part 63, subpart ZZZZ to indicate that the requirements apply to non-emergency, non-black start stationary RICE greater than 500 HP that are 4SLB and 4SRB that operate more than 24 hours per year, as intended in the original rule.

 Revising the language in §63.6625(b) of 40 CFR part 63, subpart ZZZZ that states “...in paragraphs (b)(1) through (5) of this section” to “in paragraphs (b)(1) through (6)

of this section.”

 Changing Tables 2c and 2d of 40 CFR part 63, subpart ZZZZ, where it currently specifies to inspect air cleaner, to also specify that it must be replaced as necessary.

 Revising §63.6620(b) of 40 CFR part 63, subpart ZZZZ to indicate that testing must be conducted within plus or minus 10 percent of 100 percent load for stationary RICE greater than 500 HP located at a major source (except existing non-emergency CI stationary RICE greater than 500 HP located at a major source) that are subject to testing.

 Specifying that, as was intended in the rule adding these requirements, the operating limitations (pressure drop andPage 63 of 197 catalyst inlet temperature) in Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ do not have to be met during startup.

 For consistency, and as provided in the original RICE NESHAP for other stationary RICE, clarifying in 40 CFR part 63, subpart ZZZZ that the existing stationary RICE regulated in 2010 (i.e., engines constructed before June 12, 2006 that are less than or equal to 500 HP located at major sources or engines located at area sources) must burn landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis in order to qualify as a landfill or digester gas engine under the

rule.

 Clarifying §60.4207(b) of 40 CFR part 60, subpart IIII to specify that owners and operators of stationary CI engines less than 30 liters per cylinder that are subject to the subpart that use diesel fuel must use diesel fuel that meets the requirements of 40 CFR 80.510(b), except owners and operators may use up any diesel fuel acquired prior to October 1, 2010, that does not meet the requirements of 40 CFR 80.510(b) for nonroad diesel fuel.

 Adding appendix A to 40 CFR part 63, subpart ZZZZ, which includes procedures that can be used for measuring CO emissions from existing stationary 4SLB and 4SRB stationary

RICE above 500 HP located at area sources of HAP that arePage 64 of 197 complying with the emission limits in Table 2d of 40 CFR part 63, subpart ZZZZ.

 Reinstating the footnotes for Table 2 of 40 CFR part 60, subpart JJJJ. The footnotes were inadvertently removed when the rule was amended on June 28, 2011 (76 FR 37954).

 Adding “part 60” in Table 4 of the NESHAP, in row 2 where it refers to 40 CFR appendix A.

 Clarifying in §63.6625(a) of 40 CFR part 63, subpart ZZZZ that a continuous emission monitoring system is only required to be installed at the outlet of the control device for engines that are complying with the requirement

to limit the concentration of CO.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(b) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that use gasoline.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(c) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that are rich burn engines that use LPG.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(d) of 40 CFR part 60, subpart JJJJ are forPage 65 of 197 stationary SI RICE that are not gasoline engines or rich burn engines that use LPG. G. Compliance Date The EPA has received questions regarding whether the compliance dates for engines impacted by the 2010 amendments and this proposed reconsideration will be extended. Affected sources that may be impacted by this action have expressed concern about having sufficient time to comply with the rule by the compliance date, which is May 3, 2013, for existing stationary CI RICE and October 19, 2013, for existing stationary SI RICE. Sources impacted by this reconsideration are particularly concerned with compliance in the event that the EPA does not finalize changes that are substantially similar to the changes being proposed in this action. The EPA does not intend to extend the May 3, 2013, and October 19, 2013, compliance dates, because there are many engines that must meet those compliance dates that are not impacted by this reconsideration. However, the EPA notes that sources that are affected by the reconsideration and that may need additional time to install controls to comply with the applicable requirements can request up to an additional year to install controls, as specified in 40 CFR 63.6(i). **III. Summary of Environmental, Energy and Economic Impacts**

A. What are the air quality impacts?Page 66 of 197 The EPA estimates that the rule with the proposed amendments incorporated will reduce emissions from existing stationary RICE as shown in Table 1 of this preamble. The emissions reductions the EPA previously estimated for the 2010 amendments to the RICE NESHAP are shown for comparison. Reductions are shown for the year 2013, which is the first year the final RICE NESHAP will be implemented for existing stationary RICE. **Table 1. Summary of Reductions for Existing Stationary RICE**

**Pollutant Emission R**  **e ductions (tpy)**  **in the year 2013**

**2010 Final Rule 2**  **010 Final Rule with these Proposed**  **Amendments CI SI**  **C I**  **S I**  **HAP** 1,014 6,008 1 ,005 1 ,778 **CO** 14,342 109,321 14,238 22,211 **PM** 2,844 N/A 2,818 N/A **NO x**  N/A 96,479 N/A 9,648 **VOC** 27,395 30,907 27,142 9,147

The EPA estimates that more than 900,000 stationary CI engines will be subject to the rule in total, but only a small number of stationary CI engines are affected by the proposed amendments in this action. It is estimated that approximately 330,000 stationary SI engines will be subject to the rule in total; however, only a subset of stationary SI engines are affected by the proposed amendments in this action. The decrease in estimated reductions for SI engines is primarily due toPage 67 of 197 proposed amendments to the requirements for existing 4SRB and 4SLB SI engines larger than 500 HP at area sources of HAP that are in remote areas. Those engines were required by the 2010 rule to meet emission limits that were expected to require the installation of aftertreatment to reduce emissions; under these proposed amendments, those engines are required to meet management practices that would not require the installation of aftertreatment. Further information regarding the estimated

reductions of this final rule can be found in the memorandum titled, “RICE NESHAP Reconsideration Amendments - Cost andEnvironmental Impacts,” which is available in the docket (EPAHQ-OAR-2008-0708). The EPA did not estimate any reductions associated with the minor changes to the NSPS for stationary CI and SI engines. B. What are the cost impacts? The proposed amendments are expected to reduce the overall cost of the original 2010 RICE NESHAP amendments. The EPA estimates that with these proposed amendments incorporated the cost of the rule for existing stationary RICE will be as shown in Table 2 of this preamble. The costs the EPA previously

estimated for the 2010 amendments to the RICE NESHAP are shown for comparison. **Table 2. Summary of Cost Impacts for Existing Stationary RICE Engine**  **2 010 Final Rule with these**  Comment [A12]: Please convert all dollar amounts to same base year.Page 68 of 197 **2010 Final Rule Proposed Amendments** 

**Total Annual Cost SI**  $253 million ($2009) $115 million ($2010) **CI** $373 million ($2008) $373 million ($2010) **Total Capital Cost SI**  $383 million ($2009) $103 million ($2010) **CI** $744 million ($2008) $740 million ($2010) Further information regarding the estimated cost impacts of the proposed amendments, including the cost of the proposed amendments in 2010 dollars, can be found in the memorandum titled, “RICE NESHAP Reconsideration Amendments - Cost andEnvironmental Impacts,” which is available in the docket (EPAHQ-OAR-2008-0708). The EPA did not estimate costs associated with the changes to the NSPS for stationary CI and SI engines. The changes to the NSPS are minor and are not expected to impact

the costs of those rules.

C. What are the benefits? Emission controls installed to meet the requirements of these rules will generate benefits by reducing emissions of HAP as well as criteria pollutants and their precursors, including CO, NOx and VOC. NOx and VOC are precursors to PM 2.5 (particles smaller than 2.5 microns) and ozone. The criteria pollutant

benefits are considered co-benefits for these rules. For these rules, we were only able to quantify the health co-benefits associated with reduced exposure to PM 2.5 from emission reductions of NOx and directly emitted PM 2.5 .Page 69 of 197 The EPA previously estimated that the monetized co-benefits in 2013 of the stationary CI NESHAP would be $940 million to $2,300 million (2008 dollars) at a 3-percent discount rate and $850 million to $2,100 million (2008 dollars) at a 7-percent

discount rate. 5 For stationary SI engines, EPA previously estimated that the monetized co-benefits in 2013 would be $510 million to $1,200 million (2009 dollars) at a 3-percent discount rate) and $460 million to $1,100 million (2009 dollars) at a 7- percent discount rate. 6 The proposed amendments are expected to reduce the overall emission reductions of the rules. In addition to revising the anticipated emission reductions, we have also updated the methodology used to calculate the co-benefits to be consistent with methods used in more recent rulemakings, which is summarized below and discussed in more detail in the Regulatory Impact Analysis (RIA). We estimate the monetized co-benefits of the proposed amendments of the CI NESHAP in 2013 to be $770 million to $1,900 million (2010 dollars) at a 3-percent discount

5 U.S. Environmental Protection Agency. 2010. Regulatory Impact Analysis (RIA) for Existing Stationary Compression Ignition Engines NESHAP: Final Draft . Research Triangle Park, NC. February. http://www.epa.gov/ttn/ecas/regdata/RIAs/CIRICENESHAPRIA2-17- 0cleanpublication.pdf. 6 U.S. Environmental Protection Agency. 2010. Regulatory Impact Analysis (RIA) for Existing Stationary Spark Ignition (SI) RICE NESHAP: Final Report . Research Triangle Park, NC. August. http://www.epa.gov/ttn/ecas/regdata/RIAs/riceriafinal.pdf.Page 70 of 197 rate and $690 million to $1,700 million (2010 dollars) at a 7- percent discount rate. For SI engines, we estimate the monetized co-benefits of the proposed amendments in 2013 to be $62 million to $150 million (2010 dollars) at a 3-percent discount rate and $55 million to $140 million (2010 dollars) at a 7-percent

discount rate. Using alternate relationships between PM 2.5 and premature mortality supplied by experts, higher and lower co-benefits estimates are plausible, but most of the expert-based estimates

fall between these two estimates. 7 A summary of the monetized cobenefits estimates for CI and SI engines at discount rates of 3 percent and 7 percent is in Table 3 of this preamble. Table 3. Summary of the Monetized PM 2.5 Co-Benefits for Proposed Amendments to the NESHAP for Stationary CI and SI Engines (millions of 2010 dollars) a

Pollutant Emission reductions

(tons per

year) Total monetized co-benefits

(3 percent Discount) Total monetized co-benefits

(7 percent Discount) Stationary CI Engines Directly emitted PM 2.5 2,818 $770 to $1,900 $690 to $1,700 Stationary SI Engines NOx 9,648 $62 to $150 $55 to $140

a All estimates are for the analysis year (2013) and are rounded to two significant figures so numbers may not sum across rows. The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted

7 Roman, et al. , 2008. Expert Judgment Assessment of the Mortality Impact of Changes in Ambient Fine Particulate Matter in the U.S. , Environ. Sci. Technol., 42, 7, 2268 – 2274. Comment [A13]: Please include table similar to Table 2, putting monetized benefits of this rule side by side with benefits from previous.Page 71 of 197

PM 2.5 . It is important to note that the monetized co-benefits do not include reduced health effects from exposure to HAP, direct exposure to NO 2 , exposure to ozone, ecosystem effects or visibility impairment. b PM co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. These co-benefits estimates represent the total monetized human health benefits for populations exposed to less PM 2.5 in 2013 from controls installed to reduce air pollutants in order

to meet these rules. To estimate human health co-benefits of these rules, the EPA used benefit-per-ton factors to quantify the changes in PM 2.5 -related health impacts and monetized benefits based on changes in directly emitted PM 2.5 and NOx emissions. These benefit-per-ton factors were derived using the general approach and methodology laid out in Fann, Fulcher, and Hubbell (2009). 8 This approach uses a model to convert emissions

of PM 2.5 precursors into changes in ambient PM 2.5 levels and another model to estimate the changes in human health associated with that change in air quality, which are then divided by the emission reductions to create the benefit-per-ton estimates. However, for these rules, we utilized source apportionment air quality modeling of emissions in the “Non-EGU Point other”

8 Fann, N., C.M. Fulcher, B.J. Hubbell. 2009. The influence of location, source, and emission type in estimates of the human health benefits of reducing a ton of air pollution . Air Qual Atmos Health (2009) 2:169–176.Page 72 of 197 category because we do not have modeling specifically for stationary engines. 9 We apply these national benefit-per-ton estimates calculated for this sector separately for directly

emitted PM 2.5 and NOx and multiply them by the corresponding emission reductions. The sector-specific modeling does not provide estimates of the PM 2.5 -related benefits associated with reducing VOC emissions, but these unquantified benefits are generally small compared to other PM 2.5 precursors. More information regarding the derivation of the benefit-per-ton estimates for this category is available in the technical support document, which is available in the docket. These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. The main PM 2.5 precursors affected by these rules are directly emitted PM 2.5 and NO X . Even though we assume that allfine particles have equivalent health effects, the benefit-perton estimates vary between precursors depending on the location and magnitude of their impact on PM 2.5 levels, which drive population exposure. For example, directly emitted PM 2.5 has a lower benefit-per-ton estimate than direct PM 2.5 because it does

9 U.S. Environmental Protection Agency. 2012. Technical support document: Estimating the benefit per ton of reducing PM 2.5 precursors from other point sources

. Research Triangle Park, NC.Page 73 of 197 not form as much PM 2.5 ; thus, the exposure would be lower, and

the monetized health benefits would be lower. It is important to note that the magnitude of the PM 2.5 cobenefits is largely driven by the concentration response function for premature mortality. Experts have advised the EPA to consider a variety of assumptions, including estimates based both on empirical (epidemiological) studies and judgments elicited from scientific experts, to characterize the uncertainty in the relationship between PM 2.5 concentrations and premature mortality. We cite two key empirical studies, one based on the American Cancer Society cohort study 10 and the extended Six Cities cohort study. 11 In the RIA for this proposed amendments rule, which is available in the docket, we also include benefits estimates derived from the expert judgments and other assumptions.

The EPA strives to use the best available science to support our benefits analyses. We recognize that interpretation of the science regarding air pollution and health is dynamic and evolving. After reviewing the scientific literature, we have determined that the no-threshold model is the most appropriate

10 Pope, et al. , 2002. Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine Particulate Air Pollution

. Journal of the American Medical Association 287:1132-1141. 11 Laden, et al. , 2006. Reduction in Fine Particulate Air Pollution and Mortality . American Journal of Respiratory and Critical Care Medicine 173: 667-672.Page 74 of 197 model for assessing the mortality benefits associated with reducing PM 2.5 exposure. Consistent with this finding, we have conformed the previous threshold sensitivity analysis to the current state of the PM science by incorporating a new “Lowest Measured Level” (LML) assessment in the RIA accompanying these rules. While an LML assessment provides some insight into the level of uncertainty in the estimated PM mortality benefits, the

EPA does not view the LML as a threshold and continues to quantify PM-related mortality impacts using a full range of modeled air quality concentrations.

Most of the estimated PM-related co-benefits for these rules would accrue to populations exposed to higher levels of

PM 2.5 . For this analysis, policy-specific air quality data are not available due to time or resource limitations, and thus, we are unable to estimate the percentage of premature mortality associated with this specific rule’s emission reductions at each

PM 2.5 level. As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the source apportionment modeling used to calculate the benefit-per-ton estimates for this sector. Using the Pope,

et al. (2002) study, 77 percent of the population is exposed to

annual mean PM 2.5 levels at or above the LML of 7.5 micrograms per cubic meter (μg/m 3 ). Using the Laden, et al. (2006) study, 25 percent of the population is exposed above the LML of 10 μg/m 3

.Page 75 of 197 It is important to emphasize that we have high confidence in

PM 2.5 -related effects down to the lowest LML of the major cohort studies. This fact is important, because, as we model avoided premature deaths among populations exposed to levels of PM 2.5 , we have lower confidence in levels below the LML for each study. Every benefit analysis examining the potential effects of a change in environmental protection requirements is limited, to some extent, by data gaps, model capabilities (such as geographic coverage) and uncertainties in the underlying scientific and economic studies used to configure the benefit and cost models. Despite these uncertainties, we believe the benefit analysis for these rules provides a reasonable indication of the expected health benefits of the rulemaking under a set of reasonable assumptions. This analysis does not include the type of detailed uncertainty assessment found in the

2006 PM 2.5 National Ambient Air Quality Standard (NAAQS) RIA because we lack the necessary air quality input and monitoring data to run the benefits model. In addition, we have not conducted air quality modeling for these rules, and using a benefit-per-ton approach adds another important source of uncertainty to the benefits estimates. The 2006 PM 2.5 NAAQS benefits analysis 12 provides an indication of the sensitivity of

12 U.S. Environmental Protection Agency, 2006. Proposed amendments Regulatory Impact Analysis: PM 2.5 NAAQS . Prepared byPage 76 of 197 our results to various assumptions.

It should be noted that the monetized co-benefits estimates provided above do not include benefits from several important benefit categories, including exposure to HAP, NOx, ozone exposure, as well as ecosystem effects and visibility impairment. Although we do not have sufficient information or modeling available to provide monetized estimates for these proposed amendments, we include a qualitative assessment of these unquantified benefits in the RIA for these proposed

amendments. For more information on the benefits analysis, please refer to the RIA for these proposed amendments, which is available in

the docket. D. What are the non-air health, environmental and energy impacts? The EPA does not anticipate any significant non-air health, environmental or energy impacts as a result of these proposed

amendments. **IV. Solicitation of Public Comments and Participation** The EPA seeks full public participation in arriving at its final decisions, and strongly encourages comments on all aspects of this proposed rule from all interested parties. Whenever

Office of Air and Radiation. October. Available on the Internet at http://www.epa.gov/ttn/ecas/ria.html

.Page 77 of 197 applicable, full supporting data and detailed analysis should be

submitted to allow the EPA to make maximum use of the comments. The agency invites all parties to coordinate their data collection activities with the EPA to facilitate mutually

beneficial and cost-effective data submissions. A redline/strikeout version of the complete NESHAP for stationary RICE, which shows the changes that are being proposed in this action, is available from the rulemaking docket. The EPA is seeking specific comment on the proposal to temporarily allow stationary emergency engines located at area sources to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any typeof non-emergency operation, including peak shaving and nonemergency demand response if the peak shaving is done as part of a peak shaving (load management) program with the local distribution system operator. The EPA is proposing that the allowance be removed after April 16, 2017. The EPA recognizes that the electricity grid achieves demand response and grid stability with and without the use of emergency stationary RICE. Alternative approaches include reductions or shifts in energy use, electricity storage, distribution automation, microgrids, natural gas-fired combustion turbines, and grid-connected distributed generation, including non-emergency engines and combined heat and power.Page 78 of 197 Many of these approaches can provide additional benefits, such as additional energy efficiency, lower costs, shorter electricity outage times, and better integration of renewable energy generation into the electricity grid. Several studies project a significant future potential for using less energy in homes, buildings, and industry during times of peak electricity demand. The EPA seeks comment on how these investments may affect the number of hours which emergency stationary RICE are needed in the future to address electricity peak shaving and grid stability. The EPA is also specifically seeking comment on the proposed criteria for expanding the current definition of remote areas of Alaska beyond areas that are not accessible by the FAHS. The EPA requests comment on whether the proposed system capacity limitation of 12 megawatts and the alternative 500 hour cap on annual usage (based on a 10-year rolling average) are the appropriate criteria for distinguishing the areas of Alaska that, while accessible by the FAHS, have the same unique challenges as the areas that are not accessible by the FAHS. The EPA is also seeking information related to irrigation pump engine sizes. During the 2010 rulemaking, the EPA relied upon several sources to determine the potential number of irrigation engines that may be impacted by the rule. Using these sources, the EPA estimated that the vast majority of thePage 79 of 197 existing irrigation engines were less than or equal to 300 HP. The EPA received several comments confirming this estimation. The EPA seeks comprehensive, nationwide information on the size of existing irrigation engines to either confirm or refute our understanding of existing irrigation engine sizes; this information will assist EPA in assessing the impacts of the 2010 rule on existing irrigation engines. **V. Statutory and Executive Order Reviews** A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory

Review Under section 3(f)(1) of Executive Order 12866 (58 FR 51735, October 4, 1993), this action is an “economically significant regulatory action” because it is likely to have an annual effect on the economy of $100 million or more. Accordingly, the EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Order 12866 and Executive Order 13563 (76 FR 3821, January 21, 2011), and any changes made in response to OMB recommendations have been documented in the docket for this action. In addition, the EPA prepared a RIA of the potential costs and benefits

associated with this action. A summary of the monetized benefits, compliance costs and net benefits for the proposed amendments to the stationary CIPage 80 of 197 engines NESHAP at discount rates of 3 percent and 7 percent is in Table 4 of this preamble. The summary for stationary SI engines is included in Table 5 of this preamble. Table 4. Summary of the Monetized Benefits, Compliance Costs and Net benefits for the Proposed Amendments to the Stationary CI Engine NESHAP in 2013 (millions of 2010 dollars) a 3-Percent Discount Rate 7-Percent Discount R ate Total Monetized Benefits b $770 to $1,900 $690 to $1,700 Total Compliance Costs c $373 $373 Net Benefits $400 to $1,500 $320 to $1,300

Non-Monetized Benefits Health effects from exposure to HAP Health effects from direct exposure to NO 2 and ozone Health effects from PM 2 .5 exposure from VOC Ecosystem effects Visibility impairment

a All estimates are for the implementation year (2013) and are rounded to two significant figures. b The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . Co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.

c The engineering compliance costs are annualized using a 7- percent discount rate. Table 5. Summary of the Monetized Benefits, Compliance Costs and Net benefits for the Proposed Amendments to the Stationary SI Engine NESHAP in 2013 (millions of 2010 dollars) a 3-Percent Discount Rate 7-Percent Discount Rate Total Monetized Benefits b $62 to $150 $55 to $140 Total Compliance $115 $115Page 81 of 197

Costs c Net Benefits $-53 to $35 $-60 to $25

Non-Monetized Benefits Health effects from exposure to HAP Health effects from direct exposure to NO 2 and ozone Health effects from PM 2 .5 exposure from VOC Ecosystem effects Visibility impairment

a All estimates are for the implementation year (2013) and are rounded to two significant figures. b The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . Co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.

c The engineering compliance costs are annualized using a 7- percent discount rate. For more information on the cost-benefit analysis, please refer to the RIA for these proposed amendments, which is

available in the docket. B. Paperwork Reduction Act This action does not impose any new information collection burden. This action does not impose an information collection burden because the agency is not requiring any additional recordkeeping, reporting, notification or other requirements in these proposed amendments. The changes being proposed in this action do not affect information collection, but include revisions to emission standards and other minor issues. However, the OMB has previously approved the information collectionPage 82 of 197 requirements contained in the existing regulations under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0548. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations and small governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The companies owning facilities with affected RICE can be grouped into small and large categories using SBA general sizePage 83 of 197 standard definitions. Size standards are based on industry classification codes (i.e., North American Industrial Classification System, or NAICS) that each company uses to identify the industry or industries in which they operate. The SBA defines a small business in terms of the maximum employment, annual sales, or annual energy-generating capacity (for electricity generating units—EGUs) of the owning entity. These thresholds vary by industry and are evaluated based on the primary industry classification of the affected companies. In cases where companies are classified by multiple NAICS codes, the most conservative SBA definition (i.e., the NAICS code with the highest employee or revenue size standard) was used. As mentioned earlier in this preamble, facilities across several industries use affected CI and SI stationary RICE; therefore, a number of size standards are utilized in this analysis. For the 15 industries identified at the 6-digit NAICS code represented in this analysis, the employment size standard (where it applies) varies from 500 to 1,000 employees. The annual sales standard (where it applies) is as low as 0.75 million dollars and as high as 33.5 million dollars. In addition, for the electric power generation industry, the small business size standard is an ultimate parent entity defined ashaving a total electric output of 4 million megawatt-hours (MWhr) in the previous fiscal year. The specific SBA size standardPage 84 of 197 is identified for each affected industry within the industry profile to support this economic analysis. After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This certification is based on the economic impact of

this action to all affected small entities across all industries affected. The percentage of small entities impacted by this proposal having annualized costs of greater than 1 percent of their sales is less than 2 percent according to the small entity analysis. We conclude that there is no significant economic impact on a substantial number of small entities for this rule. For more information on the small entity impacts associated with the rule, please refer to the Economic Impact and Small Business Analyses in the public docket. These analyses can be found in the RIA for each of the rules affected by this action. Although the proposed reconsideration rule would not have a significant economic impact on a substantial number of small entities, EPA nonetheless tried to reduce the impact of the rule on small entities. When developing the revised standards, EPA took special steps to ensure that the burdens imposed on small entities were minimal. EPA conducted several meetings with industry trade associations to discuss regulatory options and the corresponding burden on industry, such as recordkeeping andPage 85 of 197 reporting. In addition, as mentioned earlier in this preamble, EPA proposes to reduce regulatory requirements for a variety of

area sources affected under each of the RICE rules with amendments to the final RICE rules promulgated in 2010. We continue to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act of 1995 This rule does not contain a federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the private sector in any one year. The EPA is proposing management practices for certain existing engines located at area sources and is proposing amendments that will provide owners and operators with alternative and less expensive compliance demonstration methods. As a result of these proposed changes, the EPA anticipates a

substantial reduction in the cost burden associated with this rule. Thus, this rule is not subject to the requirements of

sections 202 or 205 of UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The changes being proposed in this action by the agency will mostly affect stationary engine owners and operatorsPage 86 of 197 and will not affect small governments. The proposed amendments

will lead to a reduction in the cost burden.

E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This proposed action primarily affects private industry, and does not impose significant economic costs on state or local governments. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Order 13132 and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicits comment on this proposed action from state and local officials.

F. Executive Order 13175: Consultation and Coordination with

Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does notPage 87 of 197 apply to this action. The EPA specifically solicits additional comment on this proposed action from tribal officials.

G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks

The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it is based solely on technology performance. H. Executive Order 13211: Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution or Use This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action reduces the burden of the rule on owners and operators of stationary engines by providing less burdensome compliance demonstration methods to owners and operators and greater flexibility in the operation of emergency engines. As a result of these proposed changes, the EPA anticipates a substantial reduction in the cost burden

associated with this rule. I. National Technology Transfer and Advancement ActPage 88 of 197 Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable voluntary consensus standards. This proposed rulemaking involves technical standards. The EPA proposes to use EPA Method 25A of 40 CFR part 60, appendix A. While the agency identified two voluntary consensus standards as being potentially applicable, we do not propose to use it in this rulemaking. The two candidate voluntary consensus standards, ISO 14965:2000(E) and EN 12619 (1999), identified would not be practical due to lack of equivalency, documentation, validation data and other important technical and policy considerations. The search and review results have been documented and are placed in the docket for the proposed rule. EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identifyPage 89 of 197 potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 (59 FR 7629 (February 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies and activities on minority populations and low-income populations in the United

States.

The EPA has concluded that it is not feasible to determine whether there would be disproportionately high and adverse human health or environmental effects on minority, low income or indigenous populations from the reconsideration of this final rule, as the EPA does not have specific information about the location of the stationary RICE affected by this rule. Although the EPA does not have specific engine location information, to the extent this rule achieves fewer reductions than the original rule, the decrease in reductions is primarily occurring in very remote areas that are sparsely populated. Comment [A14]: Are low-income people disproportionately impacted by emissions increases in sparsely populated areas?Page 90 of 197National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source Performance Standards for Stationary Internal Combustion Engines Page 91 of 197 **List of Subjects** 40 CFR part 60 Administrative practice and procedure, Air pollution control, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping. 40 CFR part 63 Administrative practice and procedure, Air pollution control, Hazardous substances, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping requirements.

______________________ Dated:

______________________ Lisa P. Jackson, Administrator.Page 92 of 197

For the reasons stated in the preamble, title 40, chapter I of the Code of Federal Regulations is amended as follows: **PART 60—[AMENDED]** 1. The authority citation for part 60 continues to read as

follows: Authority: 42 U.S.C. 7401, et seq

. **Subpart IIII—[amended]** 1. Section 60.4207 is amended by revising paragraph (b) to

read as follows: §60.4207 What fuel requirements must I meet if I am an owner or operator of a stationary CI internal combustion engine subject to this subpart?

* * * * * (b) Beginning October 1, 2010, owners and operators of stationary CI ICE subject to this subpart with a displacement of less than 30 liters per cylinder that use diesel fuel must use diesel fuel that meets the requirements of 40 CFR 80.510(b) for nonroad diesel fuel, except that any existing diesel fuel purchased (or otherwise obtained) prior to October 1, 2010, may be used until depleted.

* * * * * 2. Section 60.4211 is amended by revising paragraph (f) to

read as follows:Page 93 of 197

§60.4211 What are my compliance requirements if I am an owner or operator of a stationary CI internal combustion engine?

* * * * * (f) If you own or operate an emergency stationary ICE, you must operate the emergency stationary ICE according to the requirements in paragraphs (f)(1) through (3) of this section. In order for the engine to be considered an emergency stationary ICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (f)(1) through (3) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (f)(1) through (3) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations on non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary ICE in emergency situations. (2) You may operate your emergency stationary ICE for any combination of the purposes specified in paragraphs (f)(2)(i) through (iii) of this section for a maximum of 100 hours perPage 94 of 197

calendar year. Any operation for non-emergency situations as allowed by paragraph (f)(3) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (f)(2). (i) Emergency stationary ICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator , or local system operator , or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency ICE beyond 100 hours per calendar year. (ii) Emergency stationary ICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. Comment [A15]: Suggested conforming change with preamble text. A more extensive modification was also provided by public commenters – did EPA consider it: regional transmission organization, or equivalent balancing authority, transmission operator, or local distribution system operator has determined there are emergency conditions that could lead to a potential electrical blackout, such as unusually low frequency, equipment overload, capacity or energy deficiency, or unacceptable voltage level”

Comment [A16]: We don’t know whether this definition is broad enough to cover all the emergency situations covered by the current regulatory language (cited in the previous comment above with the addition of the local operator). In addition, we don’t know whether the local people can call a Level 2 alert, or whether th e level 2 language addresses local system reliability also.

One public commenter suggested the option of using a paper voltage log or power quality meter readings to show the need for emergency response, which would replace the need for a Level 2 Alert. We suggest the EPA solicit comments on other si tuations that the Level 2 alert may not cover. Did EPA consider this?Page 95 of 197

(iii) Emergency stationary ICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary ICE may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 3. Section 60.4219 is amended by revising the definition of “Emergency stationary internal combustion engine” to read as

follows: §60.4219 What definitions apply to this subpart?

* * * * * Emergency stationary internal combustion engine means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary ICE must comply with the requirements specified in §60.4211(f) in order to be considered emergency stationary ICE. If the engine does not comply with thePage 96 of 197

requirements specified in §60.4211(f), then it is not considered to be an emergency stationary ICE under this subpart. (1) The stationary ICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary ICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary ICE used to pump water in the case of fire or flood, etc. (2) The stationary ICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §60.4211(f). (3) The stationary ICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §60.4211(f)(2)(ii) or (iii).

* * * * * **Subpart JJJJ—[amended]** 4. Section 60.4231 is amended by revising paragraphs (b) through (d) to read as follows:

§60.4231 What emission standards must I meet if I am a manufacturer of stationary SI internal combustion engines or equipment containing such engines?Page 97 of 197

* * * * * (b) Stationary SI internal combustion engine manufacturers must certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) (except emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(2), or manufactured on or after the applicable date in §60.4230(a)(4) for emergency stationary ICE with a maximum engine power greater than or equal to 130 HP, to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cubic centimeters (cc) that use gasoline to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90.Page 98 of 197

(c) Stationary SI internal combustion engine manufacturers must certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) (except emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) that are rich burn engines that use LPG and that are manufactured on or after the applicable date in §60.4230(a)(2) , or manufactured on or after the applicable date in §60.4230(a)(4) for emergency stationary ICE with a maximum engine power greater than or equal to 130 HP, to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that are rich burn engines that use LPG and that are manufactured on or after the applicable date in §60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cc that are rich burn engines that use LPG to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90.Page 99 of 197

(d) Stationary SI internal combustion engine manufacturers who choose to certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except gasoline and rich burn engines that use LPG and emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) under the voluntary manufacturer certification program described in this subpart must certify those engines to the certification emission standards for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers who choose to certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP (except gasoline and rich burn engines that use LPG), must certify those engines to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cc (except gasoline and rich burn engines that use LPG) to the certification emission standards for new nonroad SI engines in 40 CFR part 90. For stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except gasoline and rich burn engines that use LPG and emergency stationary ICE with a maximum engine powerPage 100 of 197

greater than 25 HP and less than 130 HP) manufactured prior to January 1, 2011, manufacturers may choose to certify these engines to the standards in Table 1 to this subpart applicable to engines with a maximum engine power greater than or equal to

100 HP and less than 500 HP.

* * * * * 5. Section 60.4243 is amended by revising paragraph (d) to

read as follows: §60.4243 What are my compliance requirements if I am an owner or operator of a stationary SI internal combustion engine?

* * * * * (d) If you own or operate an emergency stationary ICE, you must operate the emergency stationary ICE according to the requirements in paragraphs (d)(1) through (3) of this section. In order for the engine to be considered an emergency stationary ICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (d)(1) through (3) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (d)(1) through (3) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations onPage 101 of 197

non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary ICE in emergency situations. (2) You may operate your emergency stationary ICE for any combination of the purposes specified in paragraphs (d)(2)(i) through (iii) of this section for a maximum of 100 hours per calendar year. Any operation for non-emergency situations as allowed by paragraph (d)(3) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (d)(2). (i) Emergency stationary ICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency ICE beyond 100 hours per calendar year.Page 102 of 197

(ii) Emergency stationary ICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. (iii) Emergency stationary ICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary ICE may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (d)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 6. Section 60.4248 is amended by revising the definition of “Emergency stationary internal combustion engine” to read as

follows: §60.4248 What definitions apply to this subpart?Page 103 of 197

* * * * * Emergency stationary internal combustion engine means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary ICE must comply with the requirements specified in §60.4243(d) in order to be considered emergency stationary ICE. If the engine does not comply with the requirements specified in §60.4243(d), then it is not considered to be an emergency stationary ICE under this subpart. (1) The stationary ICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary ICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary ICE used to pump water in the case of fire or flood, etc. (2) The stationary ICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §60.4243(d). (3) The stationary ICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §60.4243(d)(2)(ii) or (iii).Page 104 of 197

* * * * * 7. Table 2 to Subpart JJJJ of Part 60 is revised to read as

follows: **Table 2 to Subpart JJJJ of Part 60 –- Requirements for Performance Tests**  As stated in §60.4244, you must comply with the following requirements for performance tests within 10 percent of 100 percent peak (or the highest achievable) load: **For each Complying with the**  **requirement to**  **You must U**  **sing According to the**  **following requirement**  **s** 1. Stationary SI internal combustion engine demonstrati ng compliance according to §60.4244. a. limit the concentrati on of NO x in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A or ASTM Method D6522- 00(2005) a

. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device. ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for NO x concentrati on.Page 105 of 197

iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for NO x concentrati on.

v. Measure NO x at the exhaust of the stationary internal combustion engine. ( 5) Method 7E of 40 CFR part 60, a ppendix A, Method D6522- 00(2005) a , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.Page 106 of 197

b. limit the concentrati on of CO in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A or ASTM Method D6522- 00(2005) a

. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device. ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for CO concentrati on. iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.Page 107 of 197

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for CO concentrati on.

v. Measure CO at the exhaust of the stationary internal combustion engine. ( 5) Method 10 of 40 CFR part 60, a ppendix A, A STM Method D6522- 00(2005) a , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.

c. limit the concentrati on of VOC in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device.Page 108 of 197

ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for VOC concentrati on. iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for VOC concentrati on.Page 109 of 197

v. Measure VOC at the exhaust of the stationary internal combustion engine. (5) M ethods 25A and 18 of 4 0 CFR part 60, a ppendix A, Method 25A with the use of a methane cutter as described in 40 CFR 1065.265, Method 18 or 40 CFR part 60, appendix A c,d , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.

a ASTM D6522-00 is incorporated by reference; see 40 CFR 60.17. Also, you may petition the Administrator for approval to use alternative methods for portable analyzer. b You may use ASME PTC 19.10-1981, Flue and Exhaust Gas Analyses, for measuring the O 2 content of the exhaust gas as an alternative to EPA Method 3B.

c You may use EPA Method 18 of 40 CFR part 60, appendix A, provided that you conduct an adequate presurvey test prior to the emissions test, such as the one described in OTM 11 on EPA’s website ( http://www.epa.gov/ttn/emc/prelim/otm11.pdf ). d You may use ASTM D6420-99 (2004), Test Method for Determination of Gaseous Organic Compounds by Direct Interface Gas Chromatography/Mass Spectrometry as an alternative to EPA Method 18 for measuring total nonmethane organic. **PART 63--[AMENDED]**Page 110 of 197

8. The authority citation for part 63 continues to read as

follows: Authority: 42 U.S.C. 7401, et seq

. **Subpart ZZZZ--[amended]** 9. Section 63.6585 is amended by adding paragraph (f) to

read as follows: §63.6585 Am I subject to this subpart?

* * * * * (f) The emergency stationary RICE listed in paragraphs (f)(1) through (3) of this section are not subject to this subpart. The stationary RICE must meet the definition of an emergency stationary RICE in §63.6675, which includes operating according to the provisions specified in §63.6640(f). (1) Existing residential emergency stationary RICE located

at an area source of HAP emissions. (2) Existing commercial emergency stationary RICE located

at an area source of HAP emissions. (3) Existing institutional emergency stationary RICE

located at an area source of HAP emissions. 10. Section 63.6590 is amended by removing paragraphs (b)(3)(vi) through (viii). 11. Section 63.6595 is amended by revising paragraph (a)(1)

to read as follows: §63.6595 When do I have to comply with this subpart?Page 111 of 197

(a) * * * (1) If you have an existing stationary RICE, excluding existing non-emergency CI stationary RICE, with a site rating of more than 500 brake HP located at a major source of HAP emissions, you must comply with the applicable emission limitations, operating limitations and other requirements no later than June 15, 2007. If you have an existing non-emergency CI stationary RICE with a site rating of more than 500 brake HP located at a major source of HAP emissions, an existing stationary CI RICE with a site rating of less than or equal to 500 brake HP located at a major source of HAP emissions, or an existing stationary CI RICE located at an area source of HAP emissions, you must comply with the applicable emission limitations, operating limitations, and other requirements no later than May 3, 2013. If you have an existing stationary SI RICE with a site rating of less than or equal to 500 brake HP located at a major source of HAP emissions, or an existing stationary SI RICE located at an area source of HAP emissions, you must comply with the applicable emission limitations, operating limitations, and other requirements no later than October 19, 2013.

* * * * *

12. Section 63.6602 is revised to read as follows:Page 112 of 197

§63.6602 What emission limitations and other requirements must I meet if I own or operate an existing stationary RICE with a site rating of equal to or less than 500 brake HP located at a major source of HAP emissions? If you own or operate an existing stationary RICE with a site rating of equal to or less than 500 brake HP located at a major source of HAP emissions, you must comply with the emission limitations and other requirements in Table 2c to this subpart which apply to you. Compliance with the numerical emission limitations established in this subpart is based on the results of testing the average of three 1-hour runs using the testing requirements and procedures in §63.6620 and Table 4 to this subpart. 13. Section 63.6603 is amended by: a. Revising the section heading; b. Revising paragraph (b); and c. Adding paragraphs (c) through (e) to read as follows: §63.6603 What emission limitations, operating limitations, and other requirements must I meet if I own or operate an existing stationary RICE located at an area source of HAP emissions?

* * * * *(b) If you own or operate an existing stationary nonemergency CI RICE with a site rating of more than 300 HP located at an area source of HAP that meets either paragraph (b)(1) orPage 113 of 197

(b)(2) of this section, you do not have to meet the numerical CO emission limitations specified in Table 2d of this subpart. Existing stationary non-emergency CI RICE with a site rating of

more than 300 HP located at an area source of HAP that meet either paragraph (b)(1) or (b)(2) of this section must meet the management practices that are shown for stationary non-emergency CI RICE with a site rating of less than or equal to 300 HP in Table 2d of this subpart. (1) The area source is located in an area of Alaska that is not accessible by the Federal Aid Highway System (FAHS). (2) The stationary RICE is located at an area source that meets paragraphs (b)(2)(i), (b)(2)(ii), and (b)(2)(iii) of this

section. (i) The only connection to the FAHS is through the Alaska Marine Highway System (AMHS), or the stationary RICE operation is within an isolated grid in Alaska that is not connected to the statewide electrical grid referred to as the Alaska Railbelt

Grid. (ii) At least 10 percent of the power generated by the stationary RICE on an annual basis is used for residential

purposes. (iii) The generating capacity of the area source is less than 12 megawatts, or the stationary RICE is used exclusivelyPage 114 of 197

for backup power for renewable energy and is used less than 500 hrs per year on a 10 year rolling average. (c) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source

of HAP emissions that is certified to the Tier 1 or Tier 2

emission standards in Table 1 of 40 CFR 89.112 and that is subject to an enforceable state or local standard that requires the engine to be replaced no later than June 1, 2018, you may until May 3, 2015, choose to comply with the management practices that are shown for stationary non-emergency CI RICE with a site rating of less than or equal to 300 HP in Table 2d of this subpart instead of the applicable emission limitations in Table 2d, operating limitations in Table 2b, and crankcase ventilation system requirements in §63.6625(g). After May 3, 2015, you must comply with the emission limitations in Table 2dand operating limitations in Table 2b that apply for nonemergency CI RICE with a site rating of more than 300 HP located at an area source of HAP emissions. After May 3, 2015, you must also comply with the crankcase ventilation system requirements in §63.6625(g). (d) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP emissions that is certified to the Tier 3 (Tier 2 for engines above 560 kW) emission standards in Table 1 of 40 CFRPage 115 of 197

89.112, you may comply with the requirements under this part by meeting the requirements for Tier 3 engines (Tier 2 for engines above 560 kW) in 40 CFR part 60 subpart IIII instead of the emission limitations and other requirements that would otherwise apply under this part for existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP

emissions. (e) An existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at area sources of HAP must meet the definition of remote stationary RICE in §63.6675 on the initial compliance date for the engine, October 19, 2013, in order to be considered a remote stationaryRICE under this subpart. Owners and operators of existing nonemergency SI 4SLB and 4SRB stationary RICE with a site rating of

more than 500 HP located at area sources of HAP that meet the definition of remote stationary RICE in §63.6675 of this subpart as of October 19, 2013 must evaluate the status of their stationary RICE every 12 months. Owners and operators must keep

records of the initial and annual evaluation of the status of the engine. If the evaluation indicates that the stationary RICE no longer meets the definition of remote stationary RICE in §63.6675 of this subpart, the owner or operator must comply with all of the requirements for existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HPPage 116 of 197

located at area sources of HAP that are not remote stationary RICE within one year of the evaluation.

14. Section 63.6604 is revised to read as follows: §63.6604 What fuel requirements must I meet if I own or operate an existing stationary CI RICE? If you own or operate an existing non-emergency, non-black start CI stationary RICE with a site rating of more than 300 brake HP with a displacement of less than 30 liters per cylinder that uses diesel fuel, you must use diesel fuel that meets the requirements in 40 CFR 80.510(b) for nonroad diesel fuel. Existing non-emergency CI stationary RICE located in Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or at area sources in areas of Alaska that meet either §63.6603(b)(1) or §63.6603(b)(2) are exempt from the requirements of this section. 15. Section 63.6605 is amended by revising paragraph (a) to

read as follows: §63.6605 What are my general requirements for complying with this subpart? (a) You must be in compliance with the emission limitations, operating limitations, and other requirements in this subpart that apply to you at all times.

* * * * *Page 117 of 197

16. Section 63.6620 is amended by revising paragraphs (b) and (e) to read as follows: §63.6620 What performance tests and other procedures must I

use?

* * * * * (b) Each performance test must be conducted according to the requirements that this subpart specifies in Table 4 to this subpart. If you own or operate a non-operational stationary RICE that is subject to performance testing, you do not need to start up the engine solely to conduct the performance test. Owners and operators of a non-operational engine can conduct the performance test when the engine is started up again. The test must be conducted at any load condition within plus or minus 10 percent of 100 percent load for the stationary RICE listed in paragraphs (b)(1) through (4) of this section. (1) Non-emergency 4SRB stationary RICE with a site rating of greater than 500 brake HP located at a major source of HAP

emissions. (2) New non-emergency 4SLB stationary RICE with a site rating of greater than or equal to 250 brake HP located at a major source of HAP emissions. (3) New non-emergency 2SLB stationary RICE with a site rating of greater than 500 brake HP located at a major source of

HAP emissions.Page 118 of 197

(4) New non-emergency CI stationary RICE with a site rating of greater than 500 brake HP located at a major source of HAP

emissions.

* * * * * (e)(1) You must use Equation 1 of this section to

determine compliance with the percent reduction requirement:

Where:

C i = concentration of CO, THC, or formaldehyde at the control device inlet, C o = concentration of CO, THC, or formaldehyde at the control device outlet, and R = percent reduction of CO, THC, or formaldehyde emissions.

(2) You must normalize the carbon monoxide (CO), total hydrocarbons (THC), or formaldehyde concentrations at the inlet and outlet of the control device to a dry basis and to 15 percent oxygen, or an equivalent percent carbon dioxide (CO 2 ). If pollutant concentrations are to be corrected to 15 percent oxygen and CO 2 concentration is measured in lieu of oxygen concentration measurement, a CO 2 correction factor is needed.

Calculate the CO 2 correction factor as described in paragraphs (e)(2)(i) through (iii) of this section. C i - C o

C i x 100 = R ( Eq . 1)Page 119 of 197

(i) Calculate the fuel-specific F o value for the fuel burned during the test using values obtained from Method 19,

Section 5.2, and the following equation:

Where:

F o = Fuel factor based on the ratio of oxygen volume to the ultimate CO 2 volume produced by the fuel at zero percent excess air. 0.209 = Fraction of air that is oxygen, percent/100. F d = Ratio of the volume of dry effluent gas to the gross calorific value of the fuel from Method 19, dsm 3 /J (dscf/10 6 Btu). F c = Ratio of the volume of CO 2 produced to the gross calorific value of the fuel from Method 19, dsm 3 /J (dscf/10 6 Btu) (ii) Calculate the CO 2 correction factor for correcting

measurement data to 15 percent oxygen, as follows: Where:

X co2 = CO 2 correction factor, percent. 5.9 = 20.9 percent O 2 - 15 percent O 2 , the defined O 2 correction value, percent. (iii) Calculate the CO, THC, and formaldehyde gas concentrations adjusted to 15 percent O 2 using CO 2 as follows: F o = 0.209 F d F c ( Eq . 2)

X CO2 = 5.9 F o ( Eq . 3)

C adj = C d X CO2 % CO 2 ( Eq . 4)Page 120 of 197

Where:

%CO 2 = Measured CO 2 concentration measured, dry basis, percent.

* * * * * 17. Section 63.6625 is amended by: a. Revising the first sentence in paragraph (a); b. Revising the first sentence in paragraph (b); c. Revising paragraph (e)(6); and d. Revising paragraph (g) to read as follows: §63.6625 What are my monitoring, installation, collection, operation, and maintenance requirements? (a) If you elect to install a CEMS as specified in Table 5 of this subpart, you must install, operate, and maintain a CEMS to monitor CO and either oxygen or CO 2 according to the requirements in paragraphs (a)(1) through (4) of this section. If you are meeting a requirement to reduce CO emissions, the

CEMS must be installed at both the inlet and outlet of the control device. If you are meeting a requirement to limit the concentration of CO, the CEMS must be installed at the outlet of

the control device. * * *

* * * * * (b) If you are required to install a continuous parameter monitoring system (CPMS) as specified in Table 5 of this subpart, you must install, operate, and maintain each CPMSPage 121 of 197

according to the requirements in paragraphs (b)(1) through (6)

of this section. * * *

* * * * * (e) * * * (6) An existing non-emergency, non-black start stationary

RICE located at an area source of HAP emissions which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis;

* * * * * (g) If you own or operate an existing non-emergency, non-black start CI engine greater than or equal to 300 HP that is not equipped with a closed crankcase ventilation system, you must comply with either paragraph (g)(1) or paragraph (g)(2) of this section. Owners and operators must follow the manufacturer’s specified maintenance requirements for operating and maintaining the open or closed crankcase ventilation systems and replacing the crankcase filters, or can request the Administrator to approve different maintenance requirements that are as protective as manufacturer requirements. Existing CI engines

located at area sources in areas of Alaska that meet either §63.6603(b)(1) or §63.6603(b)(2) do not have to meet the requirements of paragraph (g) of this section.Page 122 of 197

(1) Install a closed crankcase ventilation system that prevents crankcase emissions from being emitted to the atmosphere, or (2) Install an open crankcase filtration emission control system that reduces emissions from the crankcase by filtering the exhaust stream to remove oil mist, particulates and metals.

* * * * * 18. Section 63.6630 is amended by: a. Revising the section heading; b. Revising paragraph (a); c. Adding paragraph (d); and d. Adding paragraph (e) to read as follows: §63.6630 How do I demonstrate initial compliance with the emission limitations, operating limitations, and other requirements? (a) You must demonstrate initial compliance with each emission limitation, operating limitation, and other requirement that applies to you according to Table 5 of this subpart.

* * * * * (d) Non-emergency 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions by 76 percent or more can demonstrate initial compliance with the formaldehyde emission limit by testing for THC instead of formaldehyde. The testing must be conducted according to the requirements in TablePage 123 of 197

4 of this subpart. The average reduction of emissions of THC determined from the performance test must be equal to or greater than 30 percent. (e) The initial compliance demonstration required for existing non-emergency 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year must be conducted according to the following requirements: (1) The compliance demonstration must consist of at least

three test runs. (2) Each test run must be of at least 15 minute duration, except that each test conducted using the method in appendix A to this subpart must consist of at least one measurement cycle and include at least 2 minutes of test data phase measurement. (3) If you are demonstrating compliance with the CO concentration or CO percent reduction requirement, you must measure CO emissions using one of the CO measurement methods specified in Table 4 of this subpart, or using appendix A to this subpart. (4) If you are demonstrating compliance with the THC percent reduction requirement, you must measure THC emissions using Method 25A of 40 CFR part 60, appendix A.Page 124 of 197

(5) You must measure O 2 using one of the O 2 measurement methods specified in Table 4 of this subpart. Measurements to

determine O 2 concentration must be made at the same time as the

measurements for CO or THC concentration. (6) If you are demonstrating compliance with the CO or THC percent reduction requirement, you must measure CO or THC

emissions and O 2 emissions simultaneously at the inlet and outlet

of the control device. 19. Section 63.6640 is amended by: a. Amending the section heading; b. Revising paragraph (a); c. Revising paragraph (c); and d. Revising paragraph (f) to read as follows: §63.6640 How do I demonstrate continuous compliance with the emission limitations, operating limitations, and other requirements? (a) You must demonstrate continuous compliance with each emission limitation, operating limitation, and other requirements in Tables 1a and 1b, Tables 2a and 2b, Table 2c, and Table 2d to this subpart that apply to you according to methods specified in Table 6 to this subpart.

* * * * * (c) The annual compliance demonstration required for existing non-emergency 4SLB and 4SRB stationary RICE with a sitePage 125 of 197

rating of more than 500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year must be conducted according to the following requirements: (1) The compliance demonstration must consist of at least

one test run. (2) Each test run must be of at least 15 minute duration, except that each test conducted using the method in appendix A to this subpart must consist of at least one measurement cycle and include at least 2 minutes of test data phase measurement. (3) If you are demonstrating compliance with the CO concentration or CO percent reduction requirement, you must measure CO emissions using one of the CO measurement methods specified in Table 4 of this subpart, or using appendix A to this subpart. (4) If you are demonstrating compliance with the THC percent reduction requirement, you must measure THC emissions using Method 25A of 40 CFR part 60, appendix A. (5) You must measure O 2 using one of the O 2 measurement methods specified in Table 4 of this subpart. Measurements to

determine O 2 concentration must be made at the same time as the

measurements for CO or THC concentration. (6) If you are demonstrating compliance with the CO or THC percent reduction requirement, you must measure CO or THCPage 126 of 197

emissions and O 2 emissions simultaneously at the inlet and outlet

of the control device. (7) If the results of the annual compliance demonstration show that the emissions exceed the levels specified in Table 6 of this subpart, the stationary RICE must be shut down as soon as safely possible, and appropriate corrective action must be taken (e.g., repairs, catalyst cleaning, catalyst replacement). The stationary RICE must be retested within 7 days of being restarted and the emissions must meet the levels specified in Table 6 of this subpart. If the retest shows that the emissions continue to exceed the specified levels, the stationary RICE must again be shut down as soon as safely possible, and the stationary RICE may not operate, except for purposes of startup and testing, until the owner/operator demonstrates through testing that the emissions do not exceed the levels specified in Table 6 of this subpart.

* * * * * (f) If you own or operate an emergency stationary RICE, you must operate the emergency stationary RICE according to the requirements in paragraphs (f)(1) through (4) of this section. In order for the engine to be considered an emergency stationary RICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year,Page 127 of 197

as described in paragraphs (f)(1) through (4) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (f)(1) through (4) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations on non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary RICE in emergency situations. (2) You may operate your emergency stationary RICE for any combination of the purposes specified in paragraphs (f)(2)(i) through (iii) of this section for a maximum of 100 hours per calendar year. Any operation for non-emergency situations as allowed by paragraphs (f)(3) and (4) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (f)(2). (i) Emergency stationary RICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner orPage 128 of 197

operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency RICE beyond 100 hours per calendar year. (ii) Emergency stationary RICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. (iii) Emergency stationary RICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary RICE located at major sources ofHAP may be operated for up to 50 hours per calendar year in nonemergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to generate incomePage 129 of 197

for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity. (4) Existing emergency stationary RICE located at area sources of HAP may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section.(i) Prior to April 16, 2017, the 50 hours per year for nonemergency situations can be used for peak shaving or nonemergency demand response to generate income for a facility, or to otherwise supply power as part of a financial arrangement with another entity if engines is operated as part of a peak shaving (load management program) with the local distribution system operator and the power is provided only to the facility itself or to support the local distribution system. (ii) On or after April 16, 2017, the 50 hours per year fornon-emergency situations cannot be used for peak shaving or nonemergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 20. Section 63.6645 is amended by adding a new paragraph (i) to read as follows:Page 130 of 197

§63.6645 What notifications must I submit and when?

* * * * * (i) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source

of HAP emissions that is certified to the Tier 1 or Tier 2 emission standards in Table 1 of 40 CFR 89.112 and subject to an enforceable state or local standard requiring engine replacement and you intend to meet management practices rather than emission limits, as specified in §63.6603(c), you must submit a notification by March 3, 2013, stating that you intend to use the provision in §63.6603(c) and identifying the state or local regulation that the engine is subject to. 21. Section 63.6675 is amended by: a. Adding in alphabetical order the definition of Alaska Railbelt Grid; b. Revising the definition of Emergency stationary RICE ;

and c. Adding in alphabetical order the definition of Remote stationary RICE to read as follows. §63.6675 What definitions apply to this subpart?

Alaska Railbelt Grid means the service areas of the six regulated public utilities that extend from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are Golden Valley Electric Association; Chugach Electric Association;Page 131 of 197

Matanuska Electric Association; Homer Electric Association; Anchorage Municipal Light & Power; and the City of Seward Electric System.

* * * * * Emergency stationary RICE means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary RICE must comply with the requirements specified in §63.6640(f) in order to be considered emergency stationary RICE. If the engine does not comply with the requirements specified in §63.6640(f), then it is not considered to be an emergency stationary RICE under this subpart. (1) The stationary RICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary RICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary RICE used to pump water in the case of fire or flood, etc. (2) The stationary RICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §63.6640(f).Page 132 of 197

(3) The stationary RICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §63.6640(f)(2)(ii) or (iii) and §63.6640(f)(4)(i).

* * * * * Remote stationary RICE means stationary RICE meeting any of the following criteria: (1) Stationary RICE located in an offshore area that is beyond the line of ordinary low water along that portion of the

coast of the United States that is in direct contact with the open seas and beyond the line marking the seaward limit of

inland waters. (2) Stationary RICE located on a pipeline segment that meets both of the criteria in paragraphs (2)(i) and (ii) of this

definition. (i) A pipeline segment with 10 or fewer buildings intended for human occupancy within 220 yards (200 meters) on either side of the centerline of any continuous 1-mile (1.6 kilometers) length of pipeline. Each separate dwelling unit in a multiple dwelling unit building is counted as a separate building intended for human occupancy. (ii) The pipeline segment does not lie within 100 yards (91 meters) of either a building or a small, well-defined outside area (such as a playground, recreation area, outdoor theater, orPage 133 of 197

other place of public assembly) that is occupied by 20 or more persons on at least 5 days a week for 10 weeks in any 12-month period. The days and weeks need not be consecutive. The building or area is considered occupied for a full day if it is occupied for any portion of the day. (iii) For purposes of this paragraph (2), the term pipeline segment means all parts of those physical facilities through which gas moves in transportation, including but not limited to pipe, valves, and other appurtenance attached to pipe, compressor units, metering stations, regulator stations, delivery stations, holders, and fabricated assemblies. Stationary RICE located within 50 yards (46 m) of the pipeline segment providing power for equipment on a pipeline segment are part of the pipeline segment. Transportation of gas means the gathering, transmission, or distribution of gas by pipeline, or the storage of gas. A building is intended for human occupancy if its primary use is for a purpose involving the presence of

humans. (3) Stationary RICE that are not located on pipelines and that have 5 or fewer buildings intended for human occupancy within a 0.25 mile radius around the engine.

* * * * * 22. Table 1b to Subpart ZZZZ of Part 63 is revised to read

as follows:Page 134 of 197

**Table 1b to Subpart ZZZZ of Part 63. Operating Limitations for Existing, New, and Reconstructed SI 4SRB Stationary RICE >500 HP**  **Located at a Major Source of HAP Emissions** As stated in §§63.6600, 63.6603, 63.6630 and 63.6640, you must comply with the following operating limitations for existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions:

**For each... Y**  **ou must meet the following operating limitation, except**  **during periods of startup...** 1. existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to reduce formaldehyde emissions by 76 percent or more (or by 75 percent or more, if applicable) and using NSCR;

or existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd or less at 15 percent O 2 and using NSCR; a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water at 100 percent load plus or minus 10 percent from the pressure drop across the catalyst measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 750°F and less than or equal to 1250°F. 1Page 135 of 197

2. existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to reduce formaldehyde emissions by 76 percent or more (or by 75 percent or more, if applicable) and not using NSCR;

or existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd or less at 15 percent O 2 and not using NSCR. Comply with any operating limitations approved by the Administrator.

1 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.8(f) for a different temperature range. 23. Table 2b to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2b to Subpart ZZZZ of Part 63** 

. **Operating Limitations for New and Reconstructed 2SLB and CI Stationary RICE >500 HP**  **Located at a Major Source of HAP Emissions, New and Reconstructed 4SLB Stationary RICE**  **≥ 250 HP Located at a Major**  **Source of HAP Emissions, Existing CI Stationary RICE >500 HP, and Existing 4SLB Stationary RICE >500 HP Located at an Area**  **Source of HAP Emissions** As stated in §§63.6600, 63.6601, 63.6603, 63.6630, and 63.6640, you must comply with the following operating limitations for new and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions; new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions; and existing CI stationary RICE >500 HP **:**

**For each... Y**  **ou must meet the following operating limitation, except**  **during periods of startup...**Page 136 of 197

1. New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to reduce CO emissions and using an oxidation catalyst;

and

New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust and using an oxidation catalyst a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water at 100 percent load plus or minus 10 percent from the pressure drop across the catalyst that was measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 450°F and less than or equal to 1350°F. 1

2. Existing CI stationary RICE >500 HP complying with the requirement to limit or reduce the concentration of CO in the stationary RICE exhaust and using an oxidation catalyst a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water from the pressure drop across the catalyst that was measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 450°F and less than or equal to 1350°F. 1Page 137 of 197

3. New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to reduce CO emissions and not using an oxidation catalyst;

and

New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust and not using an oxidation catalyst

and existing CI stationary RICE >500 HP complying with the requirement to limit or reduce the concentration of CO in the stationary RICE exhaust and not using an oxidation catalyst Comply with any operating limitations approved by the Administrator.

1 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.8(f) for a different temperature range. 24. Table 2c to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2c to Subpart ZZZZ of Part 63** 

. **Requirements for Existing Compression Ignition Stationary RICE Located at a Major Source**  **of HAP Emissions and Existing Spark Ignition Stationary RICE ≤**  **500 HP Located at a Major Source of HAP Emissions**Page 138 of 197

As stated in §§63.6600, 63.6602, and 63.6640, you must comply with the following requirements for existing compression ignition stationary RICE located at a major source of HAP emissions and existing spark ignition stationary RICE ≤ 500 HP located at a major source of HAP emissions **:**

**F or each... You must meet the**  **following requirement, except during periods of**  **startup... D**  **uring periods of startup you must...** 

1. Emergency stationary CI RICE and black start stationary CI RICE. 1 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 2 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 3 Minimize the engine’s time spent a t idle and minimize t he engine’s startup t ime at startup to a

period needed for a ppropriate and safe loading of the engine, not to exceed 30 minutes, a fter which time the non- s tartup emission

limitations apply. 32. NonEmergency, nonblack start stationary CI RICE <100 HP. a. Change oil and filter every 1,000 hours of operation or annually, whichever comes first 2 ; b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 33. NonEmergency, nonblack start CI stationary RICE 100< HP< 300 HP. Limit concentration of CO in the stationary RICE exhaust to 230 ppmvd or less at 15 percent O 2 .Page 139 of 197

4. NonEmergency, nonblack start CI stationary RICE 300<HP< 500. a. Limit concentration of CO in the stationary RICE exhaust to 49 ppmvd or less at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more.5. NonEmergency, nonblack start stationary CI RICE >500 HP. a. Limit concentration of CO in the stationary RICE exhaust to 23 ppmvd or less at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 6. Emergency stationary SI RICE and black start stationary SI RICE. 1 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 2 b. Inspect spark plugs every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 37. NonEmergency, nonblack start stationary SI RICE <100 HP that are not 2SLB stationary RICE. a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first 2 ; b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 3Page 140 of 197

8. NonEmergency, nonblack start 2SLB stationary SI RICE <100 HP. a. Change oil and filter every 4,320 hours of operation or annually, whichever comes first 2 ; b. Inspect spark plugs every 4,320 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 4,320 hours of operation or annually, whichever comes first, and replace as necessary. 39. Nonemergency, nonblack start 2SLB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of CO in the stationary RICE exhaust to 225 ppmvd or less at 15 percent O 210. Nonemergency, nonblack start 4SLB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of CO in the stationary RICE exhaust to 47 ppmvd or less at 15 percent O 211. Nonemergency, nonblack start 4SRB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of formaldehyde in the stationary RICE exhaust to 10.3 ppmvd or less at 15 percent O 212. Nonemergency, nonblack start stationary RICE 100 ≤ HP ≤ 500 which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis Limit concentration of CO in the stationary RICE exhaust to 177 ppmvd or less at 15 percent O 2

1 If an emergency engine is operating during an emergency and it is not possible to shut down the engine in order to perform the work practice requirements on the schedule required in Table 2c of this subpart, or if performing the work practice on thePage 141 of 197

required schedule would otherwise pose an unacceptable risk under federal, state, or local law, the work practice can be delayed until the emergency is over or the unacceptable risk under federal, state, or local law has abated. The work practice should be performed as soon as practicable after the emergency has ended or the unacceptable risk under federal, state, or local law has abated. Sources must report any failure to perform the work practice on the schedule required and the federal, state or local law under which the risk was deemed unacceptable. 2 Sources have the option to utilize an oil analysis program as described in §63.6625(i) in order to extend the specified oil change requirement in Table 2c of this subpart. 3 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.6(g) for alternative work practices. 25. Table 2d to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2d to Subpart ZZZZ of Part 63** 

. **Requirements for Existing Stationary RICE Located at Area Sources of HAP Emissions**  As stated in §§63.6603 and 63.6640, you must comply with the following requirements for existing stationary RICE located at area sources of HAP emissions **:**

**For each... You must meet the following**  **requirement, except during periods of**  **startup... During periods of**  **startup you must...**

1. Non-Emergency, non-black start CI stationary RICE < 300 HP a. Change oil and filter every 1,000 hours of operation or annually, whichever comes first; 1 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of Minimize the engine’s time spent at idle and minimize the engine’s startup time at startup to a period needed for appropriate and safe loading of the engine, not to exceed 30 minutes, after which time the non-startup emission limitations apply.Page 142 of 197

operation or annually, whichever comes first, and replace as necessary. 2. Non-Emergency, non-black start CI stationary RICE 300<HP< 500 a. Limit concentration of CO in the stationary RICE exhaust to 49 ppmvd at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 3. Non-Emergency, non-black start CI stationary RICE >500 HP a. Limit concentration of CO in the stationary RICE exhaust to 23 ppmvd at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 4. Emergency stationary CI RICE and black start stationary CI RICE 2 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 1 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary.Page 143 of 197

5. Emergency stationary SI RICE; black start stationary SIRICE; nonemergency, nonblack start 4SLB stationary RICE >500 HP that operate 24 hours or less per calendar year; non-emergency, non-black start 4SRB stationary RICE >500 HP that operate 24 hours or less per calendar year 2 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 6. Non-emergency, non-black start 2SLB stationary RICE a. Change oil and filter every 4,320 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 4,320 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 4,320 hours of operation or annually, whichever comes first, and replace as necessary.Page 144 of 197

7. Non-emergency, non-black start 4SLB stationary RICE ≤ 500 HP; nonemergency, nonblack start 4SLB remote stationary RICE >500 HP a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 8. Non-emergency, non-black start 4SLB stationary RICE >500 HP that are not remote stationary RICE and that operate more than 24 hours per calendar year Install an oxidation catalyst to reduce HAP emissions from the stationary RICEPage 145 of 197

9. Non-emergency, non-black start 4SRB stationary RICE ≤ 500 HP; nonemergency, nonblack start 4SRB remote stationary RICE >500 HP a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 10. Non-emergency, non-black start 4SRB stationary RICE >500 HP that are not remote stationary RICE and that operate more than 24 hours per calendar year Install NSCR to reduce HAP emissions from the stationary RICEPage 146 of 197

11. Non-emergency, non-black start stationary RICE which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 1 Sources have the option to utilize an oil analysis program as described in §63.6625(i) in order to extend the specified oil change requirement in Table 2d of this subpart. 2 If an emergency engine is operating during an emergency and it is not possible to shut down the engine in order to perform the management practice requirements on the schedule required in Table 2d of this subpart, or if performing the management practice on the required schedule would otherwise pose an unacceptable risk under federal, state, or local law, the management practice can be delayed until the emergency is over or the unacceptable risk under federal, state, or local law has abated. The management practice should be performed as soon as practicable after the emergency has ended or the unacceptable risk under federal, state, or local law has abated. Sources must report any failure to perform the management practice on the schedule required and the federal, state or local law under which the risk was deemed unacceptable. 26. Table 3 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 3 to Subpart ZZZZ of Part 63. Subsequent Performance Tests** As stated in §§63.6615 and 63.6620, you must comply with the following subsequent performance test requirements:Page 147 of 197

**For each... Complying with the**  **requirement to... Y**  **ou must...**

1. New or reconstructed 2SLB stationary RICE >500 HP located at major sources; new or reconstructed 4SLB stationary RICE ≥ 250 HP located at major sources; and new or reconstructed CI stationary RICE >500 HP located at major sources. Reduce CO emissions and not using a CEMS Conduct subsequent performance tests semiannually 1

.

2. 4SRB stationary RICE ≥ 5,000 HP located at major sources. Reduce formaldehyde emissions Conduct subsequent performance tests semiannually 1

. 3. Stationary RICE >500 HP located at major sources and new or reconstructed 4SLB stationary RICE 250 ≤ HP ≤ 500 located at major sources. Limit the concentration of formaldehyde in the stationary RICE exhaust Conduct subsequent performance tests semiannually 1

.

4. Existing nonemergency, nonblack start CI stationary RICE >500 HP that are not limited use stationary RICE Limit or reduce CO emissions and not using a CEMS Conduct subsequent performance tests every 8,760 hrs or 3 years, whichever comes first.

5. Existing nonemergency, nonblack start CI stationary RICE >500 HP that are limited use stationary RICE Limit or reduce CO emissions and not using a CEMS Conduct subsequent performance tests every 8,760 hrs or 5 years, whichever comes first.

1 After you have demonstrated compliance for two consecutive tests, you may reduce the frequency of subsequent performance tests to annually. If the results of any subsequent annual performance test indicate the stationary RICE is not inPage 148 of 197

compliance with the CO or formaldehyde emission limitation, or you deviate from any of your operating limitations, you must resume semiannual performance tests. 27. Table 4 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 4 to Subpart ZZZZ of Part 63. Requirements for Performance Tests**  As stated in §§63.6610, 63.6611, 63.6612, 63.6620, and 63.6640, you must comply with the following requirements for performance tests for stationary RICE:

**For each...**  **Complying with the**  **requirement to...**  **You must...**  **Using... According to the**  **following requirements** 

**...** 1. 2SLB, 4SLB, and CI stationary RICE a. reduce CO emissions i. Measure the O 2 at the inlet and outlet of the control device; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522-00 (2005) a (incorpo rated by referenc e, see §63.14). (a) Measurements to determine O 2 must be made at the same time as the measurements for COconcentration.

ii. Measure the CO at the inlet and the outlet of the control device (1) ASTM D6522-00 (2005) a,b (incorpo ra-ted by referenc e, see §63.14) (a) The COconcentration must be at 15 percent O 2 , dry basis.Page 149 of 197

or Method 10 of 40 CFR part 60, appendix A. 2. 4SRB stationary RICE a. reduce formaldehyd e emissions i. Select the sampling port location and the number of traverse points; and (1) Method 1 or 1A of 40 CFR part 60, appendix A §63.7(d) (1)(i) (a) sampling sites must be located at the inlet and outlet of the control device.

ii. Measure O 2 at the inlet and outlet of the control device; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00(2005)

. (a) measurements to determine O 2 concentratio n must be made at the same time as the measurements for formaldehyde or THC concentratio n.Page 150 of 197

iii. Measure moisture content at the inlet and outlet of the control device; and (1) Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D 6348-03 (a) measurements to determine moisture content must be made at the same time and location as the measurements for formaldehyde or THC concentratio n. iv. If demonstra ting complianc e with the formaldeh yde percent reduction requireme nt, measureformaldehyde at the inlet and the outlet of the control device (1) Method 320 or 323 of 40 CFR part 63, appendix A; or ASTM D6348- 03 c , provided in ASTM D6348-03 Annex A5 (Analyte Spiking Techniqu e), the percent R must be greater than or equal to 70 and less than or equal to 130. (a) formaldehydeconcentration must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.Page 151 of 197

iv. If demonstra ting complianc e with the THC percent reduction requireme nt, measure THC at the inlet and the outlet of the control device (1) Method 25A of 40 CFR part 60, appendix A (a) THCconcentration must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

3. Stationary RICE a. limit theconcentration offormaldehyde or CO in the stationary RICE exhaust i. Select the sampling port location and the number of traverse points; and (1) Method 1 or 1A of 40 CFR part 60, appendix A §63.7(d) (1)(i) (a) if using a control device, the sampling site must be located at the outlet of the control device. ii. Determine the O 2 concentra tion of the stationar y RICE exhaust at the sampling port location; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00(2005)

. (a) measurements to determine O 2 concentration must be made at the same time and location as the measurements for formaldehyde or COconcentration. iii. Measure moisture (1) Method 4 of 40 (a) measurements to determinePage 152 of 197

content of thestationary RICE exhaust at the sampling port location; and CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D 6348-03 moisture content must be made at the same time and location as the measurements for formaldehyde or CO concentratio n. iv. Measureformaldehyde at the exhaust of thestationary RICE; or (1) Method 320 or 323 of 40 CFR part 63, appendix A; or ASTM D6348- 03 c , provided in ASTM D6348-03 Annex A5 (Analyte Spiking Techniqu e), the percent R must be greater than or equal to 70 and less than or equal to 130. (a) Formaldehyde concentratio n must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

v. measure CO at the exhaust (1) Method 10 of 40 CFR part (a) CO concentratio n must be at 15 percentPage 153 of 197

of thestationary RICE. 60, appendix A, ASTM Method D6522-00 (2005) a , Method 320 of 40 CFR part 63, appendix A, or ASTM D6348- 03. O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

a You may obtain a copy of ASTM-D6522-00 (2005) from at least one of the following addresses: American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428- 2959, or University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. ASTM-D6522-00 (2005) may be used to test both CI and SI stationary RICE. b You may also use Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03.

c You may obtain a copy of ASTM-D6348-03 from at least one of the following addresses: American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428-2959, or University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. 28. Table 5 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 5 to Subpart ZZZZ of Part 63. Initial Compliance with Emission Limitations and Operating Limitations**  As stated in §§63.6612, 63.6625 and 63.6630, you must initially comply with the emission and operating limitations as required by the following:

**For each . . . Complying with the**  **requirement to . . .**  **You have demonstrated**  **initial compliance if . . .** Page 154 of 197

1. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions and using oxidation catalyst, and using a CPMS i. The average reduction of emissions of CO determined from the initial performance test achieves the required CO percent reduction; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test.Page 155 of 197

2. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, using oxidation catalyst, and using a CPMS i. The average CO concentration determined from the initial performance test is less than or equal to the CO emission limitation; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial p erformance test. 3. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions and not using oxidation catalyst i. The average reduction of emissions of CO determined from the initial performance test achieves the required CO percent reduction; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded thePage 156 of 197

approved operating parameters (if any) during the initial performance test. 4. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, and not using oxidation catalyst i. The average CO concentration determined from the initial performance test is less than or equal to the CO emission limitation; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test.Page 157 of 197

5. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions, and using a CEMS i. You have installed a CEMS to continuously monitor CO and either O 2 or CO 2 at both the inlet and outlet of the oxidation catalyst according to the requirements in §63.6625(a); and

ii. You have conducted a performance evaluation of your CEMS using PS 3 and 4A of 40 CFR part 60, appendix B; and iii. The average reduction of CO calculated using §63.6620 equals or exceeds the required percent reduction. The initial test comprises the first 4-hour period after successful validation of the CEMS. Compliance is based on the average percent reduction achieved during the 4-hour period.Page 158 of 197

6. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, and using a CEMS i. You have installed a CEMS to continuously monitor CO and either O 2 or CO 2 at the outlet of the oxidation catalyst according to the requirements in §63.6625(a); and

ii. You have conducted a performance evaluation of your CEMS using PS 3 and 4A of 40 CFR part 60, appendix B; and iii. The average concentration of CO calculated using §63.6620 is less than or equal to the CO emission limitation. The initial test comprises the first 4-hour period after successful validation of the CEMS. Compliance is based on the average concentration measured during the 4-hour period. 7. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and u sing NSCR i. The average reduction of emissions of formaldehyde determined from the initial performance test is equal to or greater than the required formaldehydePage 159 of 197

percent reduction, or the average reduction of emissions of THC determined from the initial performance test is equal to or greater than 30 percent; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test. 8. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and not using NSCR i. The average reduction of emissions of formaldehyde determined from the initial performance test is equal to or greater than the required formaldehyde percent reduction; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according toPage 160 of 197

the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test. 9. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Limit the concentration of formaldehyde i n the stationary RICE exhaust and using oxidation catalyst or NSCR i. The average formaldehyde concentration, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde emission limitation; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test. 10. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE a. Limit the concentration of formaldehyde in the stationary RICE exhaust and not using oxidation catalyst or NSCR i. The average formaldehyde concentration, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde e missionPage 161 of 197

250 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency 4SRB stationary RICE >500 HP located at a major source of HAP. limitation; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test.11. Existing nonemergency stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency stationary CI RICE 300<HP ≤ 500 located at an area source of HAP. a. Reduce CO emissions. i. The average reduction of emissions of CO or formaldehyde, as applicable determined from the initial performance test is equal to or greater than the required CO or formaldehyde, as applicable, percent reduction.12. Existing nonemergency stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency stationary CI RICE 300<HP ≤ 500 located at an area source of HAP. a. Limit the concentration of formaldehyde or CO in the stationary RICE exhaust. i. The average formaldehyde or CO concentration, as applicable, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde or CO emission limitation, as applicable.13. Existing nonemergency 4SLB a. Install an oxidation catalyst i. You have conducted anPage 162 of 197

stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year initial compliance demonstration as specified in §63.6630(e) to show that the average reduction of emissions of CO is 93 percent or more, or the average CO concentration is less than or equal to 47 ppmvd at 15 percent O 2 ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b), or you have installed equipment to automatically shut down the engine if the catalyst inlet temperature exceeds 1350°F.14. Existing nonemergency 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install NSCR i. You have conducted an initial compliance demonstration as specified in §63.6630(e) to show that the average reduction of emissions of CO is 75 percent or more, or the average reduction of emissions of THC is 30 percent or more ii. You have installed a CPMS to continuously monitor catalystPage 163 of 197

inlet temperature according to the requirements in §63.6625(b), or you have installed equipment to automatically shut down the engine if the catalyst inlet temperature exceeds 1250°F.

29. Table 6 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 6 to Subpart ZZZZ of Part 63. Continuous Compliance with Emission Limitations, Operating Limitations, Work Practices, and**  **Management Practices** As stated in §63.6640, you must continuously comply with the emissions and operating limitations and work or management practices as required by the following:

**For each . . . Complying with the**  **requirement to . .**

**. You must**  **demonstrate continuous**  **compliance by**

**. . .** 1. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, and new orreconstructed nonemergency CI a. Reduce CO emissions and using an oxidation catalyst, and using a CPMS i. Conducting semiannual performance tests for CO to demonstrate that the required CO percent reduction is achieved a ; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 164 of 197

stationary RICE >500 HP located at a major source of HAP. i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 2. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, and new orreconstructed nonemergency CI stationary RICE >500 HP located at a major source of HAP. a. Reduce CO emissions and not using an oxidation catalyst, and using a CPMS i. Conducting semiannual performance tests for CO to demonstrate that the required CO percent reduction is achieved a ; and ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining thePage 165 of 197

4-hour rolling a verages within the operating l imitations for the operating parameters established during the performance test. 3. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, new orreconstructed nonemergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and using a CEMS i. Collecting the monitoring data according to §63.6625(a), reducing the measurements to 1- hour averages, calculating the percent reduction or concen t ration of CO emissions according to §63.6620; and ii. Demonstrating that the catalyst achieves the required percent reduction of CO emissions over the 4-hour averaging p eriod, or that the emission remain at or below the CO concentration limit; and iii. Conducting an a nnual RATA of your C EMS using PS 3 and 4A of 40 CFR part 60, appendix B, as well as daily and periodic data quality checks in accordance with 40 CFR part 60, appendix F,Page 166 of 197

procedure 1. 4. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and using NSCR i. Collecting the catalyst inlet temperature data according to §63.6625(b); and ii. reducing these data to 4-hour rolling averages; and iii. Maintaining the 4-hour rolling averag e s within the operating l imitations for the catalyst inlet temperature; and iv. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 5. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and not using NSCR i. Collecting the approved operating parameter (if any) data according to §63.6625(b); and ii. Reducing these data to 4-hour rolling averages; and iii. Maintaining the 4-hour rolling a verages within thePage 167 of 197

operating l imitations for the operating parameters established during the performance test. 6. Non-emergency 4SRB stationary RICE with a brake HP ≥ 5,000 located at a major source of HAP. a. Reduce formaldehyde emissions Conducting semiannual performance tests f or formaldehyde to demonstrate that the required formaldehyde percent reduction is achieved, or to demonstrate that the average reduction of emissions of THC d etermined from the p erformance test is e qual to or greater than 30 percent. a 7. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP and new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP. a. Limit the concentration of formaldehyde i n the stationary RICE exhaust and using oxidation catalyst or NSCR i. Conducting semiannual performance tests f or formaldehyde to demonstrate that your emissions remain at or below the formaldehyde concentration limit a ; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining thePage 168 of 197

4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 8. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP and new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP. a. Limit the concentration of formaldehyde in the stationary RICE exhaust and not using oxidation catalyst or NSCR i. Conducting semiannual performance tests f or formaldehyde to demonstrate that your emissions remain at or below the formaldehyde concentration limit a ; and ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for thePage 169 of 197

operating parameters established during the performance test. 9. Existing emergency and black start stationary RICE ≤ 500 HP located at a major source ofHAP, existing nonemergency stationary RICE <100 HP located at a major source of HAP, existing emergency and black start stationary RICE located at an area source of HAP,existing nonemergency stationary CI RICE ≤ 300 HP located at an area source ofHAP, existing nonemergency 2SLB stationary RICE located at an area source of HAP,existing nonemergency stationary SI RICE located at an area source of HAP which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis, existing non-emergency 4SLB and 4SRB a. Work or Management practices. i. Operating and maintaining the stationary RICE according to the manufacturer’s emission-related operation and maintenance instructions; or ii. Develop and follow your own maintenance plan which must provide to the extent p racticable for the maintenance and operation of the engine in a manner consistent with good air pollution control practice for minimizing emissions.Page 170 of 197

stationary RICE ≤ 500 HP located at an area source ofHAP, existing nonemergency 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that operate 24 hours or less per calendar year, andexisting nonemergency 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that are remote stationary RICE. 10. Existing stationary CI RICE >500 HP that are not limited use stationary RICE. a. Reduce CO emissions, or l i mit the concentration of CO in the stationary RICE exhaust, and using oxidation catalyst i. Conducting performance tests every 8,760 hours or 3 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 171 of 197

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 11. Existing stationary CI RICE >500 HP that are not limited use stationary RICE. a. Reduce CO emissions, or l i mit the concentration of CO in the stationary RICE exhaust, and not using oxidation catalyst i. Conducting performance tests every 8,760 hours or 3 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; andPage 172 of 197

ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the operating parameters established during the performance test. 12. Existing limited use CI stationary RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and using an oxidation catalyst i. Conducting performance tests every 8,760 hours or 5 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 173 of 197

i ii. Reducing these data to 4-hour rolling averages; and iv. Maintaining th e 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 13. Existing limited use CI stationary RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and not using an oxidation catalyst i. Conducting performance tests every 8,760 hours or 5 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; andPage 174 of 197

ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating limita t ions for the operating parameters established during the performance test.14. Existing nonemergency 4SLB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install an oxidation catalyst i. Conducting annual compliance demonstrations as specified in §63. 6 640(c) to show that the average reduction of emissions of CO is 9 3 percent or more, or the average CO concentration is less than or equal to 47 ppmvd at 15 percent O 2 ; and either ii. Collecting the catalyst inlet temperature data according to §63.6625(b), r educing these data to 4-hour rolling averages; and maintaining the 4- hour rollingPage 175 of 197

a verages within the operating l imitations for the catalyst inlet temperature; or iii. Immediately shutting down the engine if the catalyst inlet t emperature exceeds 1350° F.15. Existing nonemergency 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install NSCR i. Conducting annual compliance demonstrations as specified in §63. 6 640(c) to show that the average reduction of emissions of CO is 75 p ercent or more, or the average reduction of e missions of THC is 30 percent or more ; and either ii. Collecting the catalyst inlet temperature data according to §63.6625(b), r educing these data to 4-hour rolling averages; and maintaining the 4- hour rolling a verages within the operating l imitations for the catalyst inlet temperature; or iii. Immediately shutting down the engine if the catalyst inlet t emperature exceeds 1250° F.Page 176 of 197

a After you have demonstrated compliance for two consecutive tests, you may reduce the frequency of subsequent performance tests to annually. If the results of any subsequent annual performance test indicate the stationary RICE is not in compliance with the CO or formaldehyde emission limitation, or you deviate from any of your operating limitations, you must resume semiannual performance tests. 30. Table 7 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 7 to Subpart ZZZZ of Part 63. Requirements for Reports** As stated in §63.6650, you must comply with the following requirements for reports:

**For each . .**

**. You must**  **submit a . .**

**. The report must**  **contain . . . You must submit**  **the report . . .** 1. Existingnonemergency, non-black start stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP;existing nonemergency, non-black start stationary CI RICE >500 HP located at a major source of HAP;existing nonemergency 4SRB stationary RICE >500 HP located at a Compliance report a. If there are no deviations from any emission limitations or operating limitations that apply to you, a statement that there were no deviations from the emission limitations or operating limitations during the reporting period. If there were no periods during which the CMS, including CEMS and CPMS,was out-ofcontrol, as specified in §63.8(c)(7), a i. Semiannually according to the requirements in §63.6650(b)(1)- (5) for engines that are not limited use stationary RICE subject to numerical emission limitations; and ii. Annually according to the requirements in §63.6650(b)(6)- (9) for engines that are limited use stationary RICE subject to numerical emission limitations.Page 177 of 197

major source of HAP;existing nonemergency, non-black start stationary CI RICE >300 HP located at an area source of HAP; new or reconstructed non-emergency stationary RICE >500 HP located at a major source of HAP; and new or reconstructed non-emergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP statement that there were not periods during which the CMSwas out-ofcontrol during the reporting period; or b. If you had a deviation from any emission limitation or operating limitation during the reporting period, the information in §63.6650(d). If there were periods during which the CMS, including CEMS and CPMS, was out-of-control, as specified in §63.8(c)(7), the information in §63.6650(e); or i. Semiannually according to the requirements in §63.6650(b).

c. If you had a malfunction during the reporting period, the information in §63.6650(c)(4). i. Semiannually according to the requirements in §63.6650(b).

2. New or reconstructed non-emergency stationary RICE that combusts landfill gas or digester gas equivalent to Report a. The fuel flow rate of each fuel and the heating values that were used in your calculations, and you must demonstrate that the percentage i. Annually, according to the requirements in §63.6650.Page 178 of 197

10 percent or more of the gross heat input on an annual basis of heat input provided by landfill gas or digester gas, is equivalent to 10 percent or more of the gross heat input on an annual basis; and b. The operating limits provided in your federally enforceable permit, and any deviations from these limits; and i. See item 2.a.i.

c. Any problems or errors suspected with the meters. i. See item 2.a.i.

3. Existingnonemergency, non-black start 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that operate more than 24 hours per calendar year Compliance report a. The results of the annual compliance demonstration, if conducted during the reporting period. i. Semiannually according to the requirements in §63.6650(b)(1)- (5)

31. Appendix A to Subpart ZZZZ of Part 63 is added to read

as follows:Page 179 of 197

**Appendix A Protocol for Using an Electrochemical Analyzer to Determine**  **Oxygen and Carbon Monoxide Concentrations from Certain Engines**

1.0 Scope and Application. What is this Protocol? This protocol is a procedure for using portable electrochemical (EC) cells for measuring carbon monoxide (CO) and oxygen (O 2 )

concentrations in controlled and uncontrolled emissions from existing stationary 4-stroke lean burn and 4-stroke rich burn reciprocating internal combustion engines as specified in the applicable rule. 1.1 Analytes. What does this protocol determine? This protocol measures the engine exhaust gas concentrations of carbon monoxide (CO) and oxygen (O 2 ). **Analyte CAS No.**  **S ensitivity**  Carbon monoxide (CO) 630-08-0 Minimum detectable limit should be 2

percent of the nominal range or 1 ppm, whichever is less restrictive. Oxygen (O 2 ) 7782-44-7

1.2 Applicability. When is this protocol acceptable? This protocol is applicable to 40 CFR part 63, subpart ZZZZ. Because of inherent cross sensitivities of EC cells, you must not apply this protocol to other emissions sources without specific instruction to that effect. 1.3 Data Quality Objectives. How good must my collected data be?Page 180 of 197

Refer to Section 13 to verify and document acceptable analyzer performance. 1.4 Range. What is the targeted analytical range for this protocol? The measurement system and EC cell design(s) conforming to this protocol will determine the analytical range for each gas component. The nominal ranges are defined by choosing up-scale calibration gas concentrations near the maximum anticipated flue gas concentrations for CO and O 2 , or no more than twice the permitted CO level. 1.5 Sensitivity. What minimum detectable limit will this protocol yield for a particular gas component? The minimum detectable limit depends on the nominal range and resolution of the specific EC cell used, and the signal to noise ratio of the measurement system. The minimum detectable limit should be 2 percent of the nominal range or 1 ppm, whichever is

less restrictive. 2.0 Summary of Protocol In this protocol, a gas sample is extracted from an engine exhaust system and then conveyed to a portable EC analyzer for

measurement of CO and O 2 gas concentrations. This method provides measurement system performance specifications and sampling protocols to ensure reliable data. You may use additions to, or modifications of vendor supplied measurement systems (e.g.,Page 181 of 197

heated or unheated sample lines, thermocouples, flow meters, selective gas scrubbers, etc.) to meet the design specifications of this protocol. Do not make changes to the measurement system from the as-verified configuration (Section 3.12).

3.0 Definitions

3.1 Measurement System . The total equipment required for the

measurement of CO and O 2 concentrations. The measurement system consists of the following major subsystems:

3.1.1 Data Recorder . A strip chart recorder, computer or digital recorder for logging measurement data from the analyzer output. You may record measurement data from the digital data display manually or electronically. 3.1.2 Electrochemical (EC) Cell . A device, similar to a fuel cell, used to sense the presence of a specific analyte and generate an electrical current output proportional to the analyte concentration.

3.1.3 Interference Gas Scrubber . A device used to remove or neutralize chemical compounds that may interfere with the selective operation of an EC cell. 3.1.4 Moisture Removal System . Any device used to reduce the concentration of moisture in the sample stream so as to protect the EC cells from the damaging effects of condensation and to minimize errors in measurements caused by the scrubbing of soluble gases.Page 182 of 197

3.1.5 Sample Interface . The portion of the system used for one or more of the following: sample acquisition; sample transport; sample conditioning or protection of the EC cell from any degrading effects of the engine exhaust effluent; removal of particulate matter and condensed moisture. 3.2 Nominal Range . The range of analyte concentrations over which each EC cell is operated (normally 25 percent to 150 percent of up-scale calibration gas value). Several nominal ranges can be used for any given cell so long as the calibration and repeatability checks for that range remain within specifications.

3.3 Calibration Gas . A vendor certified concentration of a specific analyte in an appropriate balance gas.

3.4 Zero Calibration Error . The analyte concentration output exhibited by the EC cell in response to zero-level calibration

gas. 3.5 Up-Scale Calibration Error . The mean of the difference between the analyte concentration exhibited by the EC cell and the certified concentration of the up-scale calibration gas.

3.6 Interference Check . A procedure for quantifying analytical interference from components in the engine exhaust gas other than the targeted analytes. 3.7 Repeatability Check . A protocol for demonstrating that an EC cell operated over a given nominal analyte concentration rangePage 183 of 197

provides a stable and consistent response and is not significantly affected by repeated exposure to that gas. 3.8 Sample Flow Rate . The flow rate of the gas sample as it passes through the EC cell. In some situations, EC cells can experience drift with changes in flow rate. The flow rate must be monitored and documented during all phases of a sampling run. 3.9 Sampling Run . A timed three-phase event whereby an EC cell’s response rises and plateaus in a sample conditioning phase, remains relatively constant during a measurement data phase, then declines during a refresh phase. The sample conditioning phase exposes the EC cell to the gas sample for a length of time sufficient to reach a constant response. The measurement data phase is the time interval during which gas sample measurements can be made that meet the acceptance criteria of this protocol. The refresh phase then purges the EC cells with CO-free air. The refresh phase replenishes requisite O 2 and moisture in the electrolyte reserve and provides a mechanism to de-gas or desorb any interference gas scrubbers or filters so as to enable a stable CO EC cell response. There are four primary types of sampling runs: pre- sampling calibrations; stack gas sampling; post-sampling calibration checks; and measurement system repeatability checks. Stack gas sampling runs can be chained together for extended evaluations, providing all other procedural specifications are met.Page 184 of 197

3.10 Sampling Day . A time not to exceed twelve hours from the time of the pre-sampling calibration to the post-sampling calibration check. During this time, stack gas sampling runs can be repeated without repeated recalibrations, providing all other sampling specifications have been met. 3.11 Pre-Sampling Calibration/Post-Sampling Calibration Check. The protocols executed at the beginning and end of each sampling day to bracket measurement readings with controlled performance

checks. 3.12 Performance-Established Configuration . The EC cell and sampling system configuration that existed at the time that it initially met the performance requirements of this protocol.

4.0 Interferences. When present in sufficient concentrations, NO and NO 2 are two gas species that have been reported to interfere with CO

concentration measurements. In the likelihood of this occurrence, it is the protocol user’s responsibility to employ and properly maintain an appropriate CO EC cell filter or scrubber for removal of these gases, as described in Section

6.2.12. 5.0 Safety. [Reserved] 6.0 Equipment and Supplies. 6.1 What equipment do I need for the measurement system?Page 185 of 197

The system must maintain the gas sample at conditions that will prevent moisture condensation in the sample transport lines, both before and as the sample gas contacts the EC cells. The essential components of the measurement system are described

below. 6.2 Measurement System Components. 6.2.1 Sample Probe . A single extraction-point probe constructed of glass, stainless steel or other non-reactive material, and of length sufficient to reach any designated sampling point. The sample probe must be designed to prevent plugging due to condensation or particulate matter. 6.2.2 Sample Line . Non-reactive tubing to transport the effluent from the sample probe to the EC cell. 6.2.3 Calibration Assembly (optional) . A three-way valve assembly or equivalent to introduce calibration gases at ambient pressure at the exit end of the sample probe during calibration checks. The assembly must be designed such that only stack gas or calibration gas flows in the sample line and all gases flow through any gas path filters. 6.2.4 Particulate Filter (optional) . Filters before the inlet of the EC cell to prevent accumulation of particulate material in the measurement system and extend the useful life of the components. All filters must be fabricated of materials that are non-reactive to the gas mixtures being sampled.Page 186 of 197

6.2.5 Sample Pump . A leak-free pump to provide undiluted sample gas to the system at a flow rate sufficient to minimize the response time of the measurement system. If located upstream of the EC cells, the pump must be constructed of a material that is non-reactive to the gas mixtures being sampled. 6.2.8 Sample Flow Rate Monitoring . An adjustable rotameter or equivalent device used to adjust and maintain the sample flow rate through the analyzer as prescribed. 6.2.9 Sample Gas Manifold (optional) . A manifold to divert a portion of the sample gas stream to the analyzer and the remainder to a by-pass discharge vent. The sample gas manifold may also include provisions for introducing calibration gases directly to the analyzer. The manifold must be constructed of a material that is non-reactive to the gas mixtures being sampled.

6.2.10 EC cell . A device containing one or more EC cells to

determine the CO and O 2 concentrations in the sample gas stream. The EC cell(s) must meet the applicable performance specifications of Section 13 of this protocol.

6.2.11 Data Recorder . A strip chart recorder, computer or digital recorder to make a record of analyzer output data. The data recorder resolution (i.e., readability) must be no greater than 1 ppm for CO; 0.1 percent for O 2 ; and one degree (either o C

or o F) for temperature. Alternatively, you may use a digital orPage 187 of 197

analog meter having the same resolution to observe and manually record the analyzer responses.

6.2.12 Interference Gas Filter or Scrubber . A device to remove interfering compounds upstream of the CO EC cell. Specificinterference gas filters or scrubbers used in the performanceestablished configuration of the analyzer must continue to be

used. Such a filter or scrubber must have a means to determine when the removal agent is exhausted. Periodically replace or replenish it in accordance with the manufacturer’s

recommendations. 6.2.13 EC Cell Temperature Device . A temperature measurement device (e.g., thermocouple, thermistor or equivalent) to monitor EC cell temperature. The temperature may be monitored within or at the surface of a cell, or in close proximity to the cells so as to indicate the operating temperature of the cells. Do not operate the analyzer outside the manufacturer’s recommended operating temperature range. 7.0 Reagents and Standards. What calibration gases are needed?

7.1 Calibration Gases . CO calibration gases for the EC cell must be CO in nitrogen or CO in a mixture of nitrogen and O 2. Use CO calibration gases with labeled concentration values certified by the manufacturer to be within ± 5 percent of the label value. Dry ambient air (20.9 percent O 2 ) is acceptable for calibrationPage 188 of 197

of the O 2 cell. If needed, any lower percentage O 2 calibration gas must be a mixture of O 2 in nitrogen.

7.1.1 Up-Scale CO Calibration Gas Concentration. Choose one or more up-scale gas concentrations such that the average of the stack gas measurements for each stack gas sampling run are between 25 and 150 percent of those concentrations. Alternatively, choose an up-scale gas that does not exceed twice the concentration of the applicable outletstandard. If a measured gas value exceeds 150 percent of the upscale CO calibration gas value at any time during the stack gas sampling run, the run must be discarded and repeated.

7.1.2 Up-Scale O 2 Calibration Gas Concentration.

Select an O 2 gas concentration such that the difference between the gas concentration and the average stack gas measurement or reading for each sample run is less than 15 percent O 2 . When the average exhaust gas O 2 readings are above 6 percent, you may use dry ambient air (20.9 percent O 2 ) for the up-scale O 2 calibration

gas.

7.1.3 Zero Gas . Use an inert gas that contains less than 0.25 percent of the up-scale CO calibration gas concentration. You may use dry air that is free from ambient CO and other combustion gas products (e.g., CO 2 ). 8.0 Sample Collection and Analysis 8.1 Selection of Sampling Sites

**.**Page 189 of 197

8.1.1 Control Device Inlet. Select a sampling site sufficiently downstream of the engine so that the combustion gases should be well mixed. Use a single sampling extraction point near the center of the duct (e.g., within the 10 percent centroidal area), unless instructed otherwise.

8.1.2 Exhaust Gas Outlet. Select a sampling site located at least two stack diameters downstream of any disturbance (e.g.,turbocharger exhaust, crossover junction or recirculation takeoff) and at least one-half stack diameter upstream of the gas discharge to the atmosphere. Use a single sampling extraction point near the center of the duct (e.g., within the 10 percent centroidal area), unless instructed otherwise. 8.2 Stack Gas Collection and Analysis

**.** Prior to the first stack gas sampling run, conduct that the pre-sampling calibration in accordance with Section 10.1. Use Figure 1 to record all data. Zero the analyzer with zero gas. Confirm and record that the scrubber media color is correct and not exhausted. Then position the probe at the sampling point and begin the sampling run at the same flow rate used during the up-scale calibration. Record the start time. Record all EC cell output responses, the EC cell temperature, and the flow rate during the “sample conditioning phase” once per minute until constant readings are obtained. Then begin the “measurement data phase” and record readings every 15 seconds for at least two minutes (or eight readings),Page 190 of 197

or as otherwise required to achieve two continuous minutes of data that meet the specification given in Section 13.1. Finally, perform the “refresh phase” by introducing dry air, free from CO and other combustion gases, until several minute-to-minute readings of consistent value have been obtained. For each run use the “measurement data phase” readings to calculate the average stack gas CO and O 2 concentrations. 8.3 EC Cell Temperature

**.** During each stack gas sampling run, measure and record the temperature of the EC cells. The temperature during each run must not vary more than ± 10°F. The overall EC cell temperature variation must be less than ± 20°F from the pre-sampling calibration to the final post-sampling

calibration check.

8.4 EC Cell Flow Rate. Maintain t he EC cell sample flow rate so that it does not vary by more than ± 10 percent throughout the pre-sampling calibration, stack gas sampling and post-sampling calibration check. Alternatively, the EC cell sample flow rate can be maintained within a tolerance range that does not affect the gas concentration readings by more than ± 3 percent, as instructed by the EC cell manufacturer. 9.0 Quality Control (Reserved)

10.0 Calibration and Standardization 10.1 Pre-Sampling Calibration

**.** Conduct the following protocol once for each nominal range to be used on each EC cell beforePage 191 of 197

performing a stack gas sampling run on each field sampling day. Repeat the calibration if you replace an EC cell before completing all of the sampling runs. There is no prescribed order for calibration of the EC cells; however, each cell must complete the measurement data phase during calibration. Assemble the measurement system by following the manufacturer's recommended protocols including for preparing and preconditioning the EC cell. Assure the measurement system has no leaks and verify the gas scrubbing agent is not depleted. Use Figure 1 to record all data.

10.1.1 Zero Calibration. For both the O 2 and CO cells, introduce zero gas to the measurement system (e.g., at the calibration assembly) and record the concentration reading every minute until readings are constant for at least two consecutive minutes. Include the time, EC cell temperature, and sample flow rate. Repeat the steps in this section at least once to verify the zero calibration for each component gas.

10.1.2 Zero Calibration Tolerance

**.** For each zero gas introduction, the zero level output must be less than or equal to ± 3 percent of the up-scale gas value or ± 1 ppm, whichever is less restrictive, for the CO channel and less than or equal to ± 0.3 percent O 2 for the O 2 channel. 10.1.3 Up-Scale Calibration. Individually introduce each calibration gas to the measurement system (e.g., at thePage 192 of 197

calibration assembly) and record the start time. Record all EC cell output responses, the EC cell temperature, and the flow rate during this “sample conditioning phase” once per minute until readings are constant for at least two minutes. Then begin the “measurement data phase” and record readings every 15 seconds for a total of two minutes, or as otherwise required. Finally, perform the “refresh phase” by introducing dry air, free from CO and other combustion gases, until readings are constant for at least two consecutive minutes. Then repeat the steps in this section at least once to verify the calibration for each component gas. Introduce all gases to flow through the entire sample handling system (i.e., at the exit end of the sampling probe or the calibration assembly). 10.1.4 Up-Scale Calibration Error

**.** The mean of the difference of the “measurement data phase” readings from the reported standard gas value must be less than or equal to ± 5 percent or ± 1 ppm for CO or ± 0.5 percent O 2 , whichever is less restrictive, respectively. The maximum allowable deviation from the mean measured value of any single "measurement data phase" reading must be less than or equal to ± 2 percent or ± 1 ppm for CO or ± 0.5 percent O 2 , whichever is less restrictive, respectively. 10.2 Post-Sampling Calibration Check . Conduct a stack gas postsampling calibration check after the stack gas sampling run or

set of runs and within 12 hours of the initial calibration.Page 193 of 197

Conduct up-scale and zero calibration checks using the protocol in Section 10.1. Make no changes to the sampling system or EC cell calibration until all post-sampling calibration checks have been recorded. If either the zero or up-scale calibration error exceeds the respective specification in Sections 10.1.2 and 10.1.4 then all measurement data collected since the previous

successful calibrations are invalid and re-calibration and resampling are required. If the sampling system is disassembled or the EC cell calibration is adjusted, repeat the calibration check before conducting the next analyzer sampling run. 11.0 Analytical Procedure The analytical procedure is fully discussed in Section 8. 12.0 Calculations and Data Analysis

Determine the CO and O 2 concentrations for each stack gas sampling run by calculating the mean gas concentrations of the data recorded during the “measurement data phase”.

13.0 Protocol Performance Use the following protocols to verify consistent analyzer performance during each field sampling day.

13.1 Measurement Data Phase Performance Check . Calculate the mean of the readings from the “measurement data phase”. The

maximum allowable deviation from the mean for each of the individual readings is ± 2 percent, or ± 1 ppm, whichever is

less restrictive. Record the mean value and maximum deviationPage 194 of 197

for each gas monitored. Data must conform to Section 10.1.4. The EC cell temperature and EC cell flow rate must conform to the specifications in Section 8.3 and 8.4 respectively. Example: A measurement data phase is invalid if the maximum deviation of any single reading comprising that mean is greater than ± 2 percent or ± 1 ppm (the default criteria). For example, if the mean = 30 ppm, single readings of below 29 ppm and above 31 ppm are disallowed).

13.2 Interference Check

**.** Before the initial use of the EC cell and interference gas scrubber in the field, and semi-annually thereafter, challenge the interference gas scrubber with an NO 2 gas standard that is generally recognized as representative of diesel-fueled engine NO 2 emission values. Record the response displayed by the CO EC cell and other pertinent data on Figure 1

or a similar form. 13.2.1 Interference Response

**.** The CO interference response should be less than or equal to ± 5 percent of the up-scale CO calibration gas concentration. 13.3 Repeatability Check

**.** Conduct the following check once for each nominal range that is to be used on the CO EC cell within five days prior to each field sampling program. If a field sampling program lasts longer than five days, repeat this check every five days. Immediately repeat the check if the EC cell is replaced or if the EC cell is exposed to gas concentrationsPage 195 of 197

greater than 150 percent of the highest up-scale gas

concentration. 13.3.1 Repeatability Check Procedure . Perform a complete EC cell sampling run (all three phases) by introducing the CO calibration gas to the measurement system and record the response. Follow Section 10.1.3. Use Figure 1 to record all data. Repeat the run three times for a total of four complete runs. During the four repeatability check runs, do not adjust the system except where necessary to achieve the correct calibration gas flow rate at the analyzer. 13.3.2 Repeatability Check Calculations

**.** Determine the highest and lowest average “measurement data phase” CO concentrations from the four repeatability check runs and record the results on Figure 1 or a similar form. The absolute value of the difference between the maximum and minimum average values recorded must not vary more than ± 3 percent or ± 1 ppm of the up-scale gas value,

whichever is less restrictive. 14.0 Pollution Prevention (Reserved) 15.0 Waste Management (Reserved) 16.0 Alternative Procedures (Reserved)

17.0 References (1) “Development of an Electrochemical Cell Emission Analyzer Test Protocol”, Topical Report, Phil Juneau, Emission Monitoring, Inc., July 1997.Page 196 of 197

(2) “Determination of Nitrogen Oxides, Carbon Monoxide, and Oxygen Emissions from Natural Gas-Fired Engines, Boilers, and Process Heaters Using Portable Analyzers”, EMC Conditional TestProtocol 30 (CTM-30), Gas Research Institute Protocol GRI96/0008, Revision 7, October 13, 1997. (3) "ICAC Test Protocol for Periodic Monitoring”, EMC Conditional Test Protocol 34 (CTM-034), The Institute of Clean Air Companies, September 8, 1999. (4) “Code of Federal Regulations”, Protection of Environment, 40 CFR, Part 60, Appendix A, Methods 1-4; 10.

Table 1: Appendix A - Sampling Run Data. Facility________________ Engine I.D.______________ Date_________ Run Type: (__) (__) (__) (__) (X) Pre-Sample Stack Gas Post-Sample Repeatability Calibration Sample Cal. Check Check Run # 1 1 2 2 3 3 4 4 T ime Scrub. OK FlowRate Gas 

## O 2 

## CO O 2 

## CO O 2 

## CO O 2 

## CO

Sample Cond. Phase “ “ “ “

Measurement Data Phase “Page 197 of 197

“ “ “ “ “ “ “ “ “

Mean

Refresh

Phase

“ “ “ “

### Summary of Interagency Working Comments on draft rule under EO 13563 review



### Page 1 of 4 

## Below is a summary of interagency comments received during EO 13563 review of the draft rule “Reconsideration of Final National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines.” They are subject to further policy review.

Compliance Date Extension and Tier 3 Requirements

Commenters support EPA’s proposal to specify that any exis ting certified CI engine above 300 HP at an area source of HAP emissions that was certified to meet the Tier 3 engine standards and was installed before June 12, 2006, is in compliance with the NESHAP. This proposal is a common ‐ sense approach to rectify the inconsistency in the current RICE MACT regarding these engines that represent some of the earliest adopters of clean engine technology.

Commenters support EPA’s proposal to extend the complian ce date for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are subject to state and locally enforceabl e requirements requiring replacement of the engine by January 1, 2018, and requiring these engines to meet management practices until either the compliance date or the date these engines are replaced and they also appreciate EPA’s proposal to offer a two

‐ year extension of the compliance date for these engines and believes that an extension is appropriate. However, commenters request tha t EPA provide an extension equivalent to the San Joaquin Valley Air Pollution Control District regulatory timeline previously approved by EPA in the California SIP for these engines (i.e., replacement by either January 1, 2015 or 12 years after the installation date of the engine, but no lat er than June 1, 2018). The agricultural producers associated with these engines have worked collaboratively with EPA, the San Joaquin Valley Air Pollution Control District, and USDA NRCS to establish a reasonable timeframe for replacing these engines with the most technologically

‐ advanced clean engine technology and have reli ed upon the agreement between these parties in developing their business and personal capital investment plans to include expeditious replacement of these engines. Requiring these producers, who have already committed to replacing these engines in a relatively short timeframe in the face of more stringent air quality regulatory requirements than their peer s nationally and most of the rest of the world, to stretch their ability to make such capital investments even further and quicker in this period of economic stagnation does impose an unnecessary financial hardship. Many of these producers will also look to USDA

‐ NRCS for financial assistance to help fund the alread y ‐ required replacement of these engines and given the current Federal agency budget climate, USDA’s ability to provide the appropriate assistance in the next few years may be hampered. California NRCS has funded this type of engine replacement at a cost ranging from $19,000 per engine fo r 300

‐ 399 hp engines to $45,000 per engine for >600 hp engines, putting a rough cost estimate of between $7.8

‐ 18.4 million as the potential USDA funding amount for helping to replace these 409 engines. Producer out

‐ of

‐ pocket costs would be additional to and equal to or greater tha n the USDA funding amount. Given that Federal budgets are being reduced significantly overall and also given that the existing

### Summary of Interagency Working Comments on draft rule under EO 13563 review



### Page 2 of 4 

## Farm Bill (which contains authorization for specific funding related to improving air quality) is set to expire in September with no new Farm Bill yet passed nor any guarantee that specific air quality funding will be re ‐ authorized, it seems prudent to allow a greater timeframe for both producers and USDA to pla n for this significant expenditure. Commenters also note that aligning the compliance date with the dates specified in the California SIP will actually cause a portion of these engines to come into compliance with the RICE MACT prior to EPA’s proposed new compliance date of May 3, 2015.

Emergency Demand Response Programs

We agree with EPA’s exp ansion of the current rule from 15 hours to 100 hours for annual operation of emergency engines, including the necessary testing and maintenance.

We understand that units may turn on engines before a declaration of a formal declaration of emergency. In this event, EPA shoul d consider a de minimis allowance in the event a declaration is not eventually declared. We wouldn’t want emergency engines to become non ‐ emergency engines simply because someone failed to make an official declaration.

In addition, EPA should provide an allowance for peak shaving for economic reasons for small systems for 50 hours annually (or some other de minimis amount) beyond that 2017 temporary extension for the areas tha t are in attainment with PM and ozone standards. Total engine use would still be limited to 100 hours, including testing and maintenance, and use as part of the emergency demand response progr am. The original RICE MACT Rule for >500 hp still contains an exemption for limited use RICE of up to 100 hours. Could this limited use exemption for major sources be applied to peak shaving engines at area sources at least until EPA goes back and reviews the original limited use exemption for major sourc es for the largest engines?

Compliance Date for Reconsideration Engines

For the engines under reconsideration, EPA should propose an additional year past May and October 2013, because it will be difficult for the affected businesses to plan and acquire financing for retrofits under an accelerated schedule. It is already April 2012, and EPA is at least months away from finalizing these requirements. At a minimum, EPA should state that it will consider using a blanket ext ension for all such engines that require retrofits if it takes more than a few months to finalize the requirements, and also encourage states to consider the cas e ‐ by

‐ case extensions where need. An extension will not be needed for engines subject only to work practices.

Use of DOT’s Class Location and Regulatory Approach for Remote Engines

### Summary of Interagency Working Comments on draft rule under EO 13563 review



### Page 3 of 4 

## Commenters support EPA’s proposal that existing 4

‐ stroke SI engines above 500 hp at an area source of HAP emissions that are considered to be remote from human activity only have to meet management practices instead of emissions limits. Since the purpose of MACT standards is to reduce public exposure to hazardous air poll utants, it seems reasonable that those engines that are located at area sources and are not in close proximity to people will have less of an impact on the human population and should therefore not be subject to the same stringent requirements as those engines that are more likely to impact humans. However, commenters believe that requiring these engines to review the remoteness criteria every year may be excessi ve. It would seem that many of these larger engines are likely already covered under a Title V operating permit (typically a five

‐ year permit term), and aligning the requirement to review the remoteness criteria consistent with the permit term would seem to provide greater regulatory certainty for th e owner/operator of such an engine

. Verification every year that the units are still remote units is unnecessarily burdensome, particularly for small businesses. Again, a once every five year requirement, or for the applicable permit te rm, would be adequate.

In using DOT’s class location definition found in 49 C.F.R. § 192.5, we would recommend that EPA make it clear that for DOT pipeline safety purposes, class location only applies to natural gas pipelines. Since EPA’s proposed emissions rule applies to both natural gas and ha zardous liquid pipelines, hazardous liquid pipeline operators using the types of internal combustion engines subject to EPA’s regulations would need to conduct class location surveys and make class location determinations for the first time to meet the EPA requirements.

In referencing DOT’s class location regulations, we would suggest that EPA cite to the curr ent CFR publication and year in case future changes to the DOT’s pipeline regulations to some extent eliminates the class location system from DOT use. This is a potential outcome of the Congressional study required by section 5 of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (P.L. 112

‐ 90).

EPA states that one of th e justifications for the amendment is that requiring controls for sparsely populated areas is not cost effective as originally thought, yet the RIA seems to assume no difference in control costs based on geographic location. Can EPA revise the cost numbers to reflect th e increased cost of controls in sparsely populated areas, or, if not, at least provide a more robust discussion of the limits of the RIA analysis that addresses this inconsistency?

EPA states that the subcategorization is justified in part because health can be adequately protected in sparsely populated areas. Does EPA have quantitative information to support this assertion? Can EPA also better recon cile the apparent contradiction of this approach with the assumption of identical benefits per ton for all geographic areas in the RIA?

EO 12898 states, “...each Federal agency shall make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental eff ects of its programs, policies, and activities on minority populations and low

‐ income populations.”

### Summary of Interagency Working Comments on draft rule under EO 13563 review



### Page 4 of 4 

## By exempting RICE in sparsely populated areas from emissions controls, and thereby increasing emissions from these sources, relative to what they would otherwise be, it would seem that this action could potentially raise EJ concerns (if, for example, low

‐ income people are more likely to live in sparsely populated areas). It woul d be helpful if EPA could provide some analysis to identify whether this adverse health or environmental effect could disproportionately affect minority or low

‐ income populations.

CI Engines > 300 HP Area Source Using the same logic for this proposal for SI engines and to promote consistency within the rule, commenters suggest that it is also appropriate to provide similar relief for remote CI engines above 300 hp at an area source of HAP emissions an d requests that EPA include such relief in the proposal. If there are no people living nearby, this additional expense of retrofitting an existing area source engine is not warranted. Since area sou rces are covered only by GACT, EPA is fully authorized to consider the costs and benefits of this additional requirement. The retrofit costs of these engines can be considerable for small agricultural producers.

RIA and Preamble ‐ Choice of Baseline OMB Circular A

‐ 4 states, “The baselin e represents the agency’s best assessment of what the world would be like absent the action....For analyses supporting modifications to an existing regulation, a baseline assuming no change in the regulatory program generally provides an appropriate basis for evaluating regulatory alternatives.”

It seems that instead of choosing no change in the 2010 RICE rule as the baseline, EP A is using the absence of the 2020 rule as the baseline. We would like to better understand EPA’s choice of baseline, and discuss the feasibility of adding an analysis of incremental costs and benefits relative to 2010 rule as a substitute for, or suppl ement to, the current approach.

## From: "Higgins, Cortney" <Cortney_Higgins@omb.eop.gov> To: Melanie King/RTP/USEPA/US@EPA, Larry Sorrels/RTP/USEPA/US@EPA Cc: RobertJ Wayland/RTP/USEPA/US@EPA Date: 05/08/2012 09:01 AM Subject: RICE CI rule -- RIA

Hi, Attached are the redline and comments on the employment section of the CI RICE RIA. We also request that conforming changes be made in the SI RIA. Thanks, Cortney (See attached file: EO_12866_RICE_NESHAP_Compression_Ignition_Engines_RIA_proposal_2060- AQ58_2012versionInteragencyComments582012.docx)***E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

**E.O. 12866 NESHAP RICE Compression Ignition Engines RIA 2060- AQ58 Proposal 20120315** 



# Regulatory Impact Analys is (RIA) for Proposed Reconsideration of Existing Stationary Compression Ignition (CI) Engines NESHAP

Draft ReportThis page is intentionally blank.April 2012

Regulatory Impact Analysis (RIA) for Propose d Reconsideration of Existing Stationary Compression Ignition Engines NESHAP

By: Paramita Sinha, Brooks Depro, and Fern Braun RTI International Research Triangle Park, North Carolina

Prepared for: Larry Sorrels

Contract No. EP-D-06-003

U.S. Environmental Protection Agency Office of Air Quality Planning and Standards Health and Environmental Impacts Division Air Economics Group Research Triangle Park, NC

# Regulatory Impact Analysis (RIA) for Proposed Reconsideration of Existing Stationary Compression Ignition Engines NESHAP

Draft Report

April 2012 Prepared for Larry Sorrels U.S. Environmental Protection Agency Office of Air Quality Planning and Standards (OAQPS) Air Economics Group (AEG) (MD-C439-02) Research Triangle Park, NC 27711

Prepared by

Paramita Sinha

Brooks Depro Fern Braun RTI International 3040 Cornwallis Road Research Triangle Park, NC 27709iii CONTENTS

Section Page

Section 1 Executive Summary ................................................................................. 1-1

Section 2 Introduction .............................................................................................. 2-1 2.1 Organization of this Report .................................................................................. 2-1

Section 3 Industry Profile ........................................................................................ 3-2 3.1.1 Overview .................................................................................................. 3-2 3.1.2 Goods and Services Used ......................................................................... 3-4 3.1.3 Business Statistics .................................................................................... 3-5 3.2 Oil and Gas Extraction ......................................................................................... 3-7 3.2.1 Overview .................................................................................................. 3-7 3.2.2 Goods and Services Used ....................................................................... 3-10 3.2.3 Business Statistics .................................................................................. 3-11 3.3 Pipeline Transportation of Natural Gas ............................................................. 3-16 3.3.1 Overview ................................................................................................ 3-16 3.3.2 Goods and Services Used ....................................................................... 3-17 3.4 General Medical and Surgical Hospitals ............................................................ 3-21 3.4.1 Overview ................................................................................................ 3-21 3.4.2 Goods and Services Used ....................................................................... 3-21 3.4.3 Business Statistics .................................................................................. 3-23 3.5 Irrigation Sets and Welding Equipment ............................................................. 3-25 3.5.1 Overview ................................................................................................ 3-25 3.5.2 Irrigation and Welding Services ............................................................ 3-26 3.5.3 Business Statistics .................................................................................. 3-31

Section 4 Regulatory Alternatives, Costs, and Emission Impacts ........................... 4-1 4.1 Background .......................................................................................................... 4-1 4.2 Summary of the Proposed Reconsideration Rule ................................................ 4-2iv 4.2.2 What Are the Pollutants Regulated by this Proposed Reconsideration Rule? ........................................................................... 4-15 4.3 Cost Impacts....................................................................................................... 4-16 4.3.1 Introduction ............................................................................................ 4-16 4.3.2 Major Sources ........................................................................................ 4-20 4.3.3 Area Sources .......................................................................................... 4-22

Section 5 Economic Impact Analysis, Energy Impacts, and Social Costs .............. 5-1 5.1 Compliance Costs of the Final Rule .................................................................... 5-1 5.2 Social Cost Estimate .............................................. Error! Bookmark not defined.

5.3 How Might People and Firms Respond? A Pa rtial Equilibrium Analysis .......... 5-5 5.3.1 Changes in Market Prices a nd Quantities ...............

................................ . 5-5 5.3.2 Regulated Markets: The Electric Power Generation, Transmission, and Distribution Sector ............................................................................ 5-7 5.3.3 Partial Equilibrium Measures of Social Cost: Changes Consumer and Producer Surplus ............................................................................... 5-8 5.4 Energy Impacts .................................................................................................... 5-9 5.5 Unfunded Mandates ........................................................................................... 5-10 5.5.1 Future and Disproportionate Costs ........................................................ 5-11 5.5.2 Effects on the National Economy .......................................................... 5-11 5.6 Environmental Justice ........................................................................................ 5-12 5.7 Employment Impact Analysis ............................................................................ 5-11 5.7.1 Employment Impacts from Pollution Control Requirements5-13 5.7.2Employment Impacts within the Reg u

Section 6 Small Entity Screening Analysis ............................................................. 6-1 6.1 Small Entity Data Set ........................................................................................... 6-1 6.2 Small Entity Economic Impact Measures ............................................................ 6-2 6.2.1 Model Establishment Receipts and Annual Compliance Costs ............... 6-2 6.3 Small Government Entities

......................... ........................ ............................... 6-12 Deleted: 4-17

Deleted: 4-17

Deleted: 5-9

Deleted: 5-10

Deleted: 5-12 Deleted: 5-12 Deleted: 5-13

Deleted: 5-18v Section 7 Human Health Benefits of Emissions Reductions ................................... 7-1 7.1 Calculation of PM 2.5 -Related Human Health Co-Benefits .................................. 7-1 7.2 Unquantified Benefits ........................................................................................ 7-15 7.2.1 HAP Benefits ............................................................................................ 7-15

7.2.2 Ozone Co-Benefits ................................................................................. 7-26 7.2.3 Carbon Monoxide Co-Benefits .............................................................. 7-26 7.2.4 Visibility Impairment Co-Benefits ........................................................ 7-26 7.3 Characterization of Uncertainty in the Monetized Co-Benefits ........................ 7-27 7.4 Comparison of Co-Benefits and Costs ............................................................... 7-32 7.5 References .......................................................................................................... 7-36

Section 8 References ................................................................................................ 8-1vi LIST OF FIGURES

Number Page 3-1. Industrial Production Index (NAICS 2211) ................................................................ 3-3 3-2. Internal Combustion Generators by State: 2006 ......................................................... 3-4 3-3. 2002 Regional Distribution of Establishments: Electric Power Generation, Transmission, and Distribution Industry (NAICS 2211) ............................................ 3-5 3-4. Industrial Production Index (NAICS 211) .................................................................. 3-1 3-5. Distribution of Establishments within Pi peline Transportation (NAICS 486) .......... 3-17 3-6. Distribution of Revenue within Pipeline Transportation (NAICS 486) .................... 3-17 3-7. Share of Establishments by Legal Form of Organization in the Pipeline Transportation of Natural Gas Industry (NAICS 48621): 2002 ................................ 3-19 3-8. Share of Establishments by Legal Form of Organization in the General Medical and Surgical Hospitals Industry (NAICS 6221): 2002 .............................................. 3-24 3-9. Industrial Production Index (NAICS 333111) .......................................................... 3-28

5-1. Distribution of Annualized Direct Compli ance Costs by Industry: 2013 ................... 5-2 5-2. Distribution of Engine Population by Horsepower Group: 2013 ................................ 5-3 5-3. Average Annualized Cost per Engine by Horsepower Group: 2013 ($2007) ............. 5-3 5-4. Market Demand and Supply Model: With and Without Regulation ........................... 5-6 5-5. Electricity Restructuring by State ................................................................................ 5-9

7-1. Breakdown of Monetized PM 2.5 Health Co-benefits using Mortality Function from Pope et al. (2002) .............................................................................................. 7-10 7-2. Total Monetized PM 2.5 Co-Benefits of Proposed CI RICE NESHAP Reconsideration in 2013 ............................................................................................ 7-14 7-3. Breakdown of Total Monetized Co-benefits for Proposed CI RICE NESHAP Reconsideration by Engine Size...................................................7-15

7-4. Estimated Chronic Census Tract Carci nogenic Risk from HAP exposure from outdoor sources (2005 NATA) .................................................................................. 7-17 7-5. Estimated Chronic Census Tract Noncancer (Respiratory)Risk from HAP exposure from outdoor sources (2005 NATA).............. ....................................... 7-17 7-6. Percentage of Adult Population by Annual Mean PM 2.5 Exposure in the Baseline..............................................................................7-29 7-7 Cumulative Distribution of Adult Population by Annual Mean PM 2.5 Exposure in the Baseline........................................................................7-29 7-8. Net Benefits for Proposed CI RICE NESHAP Reconsideration at 3% discount rate..................................................................7-33vii 7-9. Net Benefits for Proposed CI RICE NESHAP Reconsideration at 7% discount rate..................................................................7-34viii LIST OF TABLES

Number Page 3-1. Key Statistics: Electric Power Generatio n, Transmission, and Distribution (NAICS 2211) ($2007) ................................................................................................ 3-2 3-2. Direct Requirements for Electric Power Generation, Transmission, and Distribution (NAICS 2211): 2007 ............................................................................... 3-5 3-3. Firm Concentration for Electric Power Generation, Transmission, and Distribution (NAICS 2211): 2002 ............................................................................... 3-7 3-4. United States Retail Electricity Sales Statistics: 2008 ................................................ 3-8 3-5. FY 2010 Financial Data for 70 U.S. Shar eholder-Owned Electric Utilities ............. 3-10 3-6. Aggregate Tax Data for Accounting Period 7/07–6/08: NAICS 2211 ..................... 3-10 3-7. Key Enterprise Statistics by Receipt Size for Electric Power Generation, Transmission, and Distribution (NAICS 2211): 2007 ............................................... 3-11 3-8. Key Statistics: Crude Petroleum and Natural Gas Extraction (NAICS 211111): ($2007) ...................................................................................................................... 3-11 3-9. Key Statistics: Natural Gas Liquid Extraction (NAICS 211112) ($2007) ................ 3-12 3-10. Direct Requirements for Oil and Gas Extraction (NAICS 211): 2002 ...................... 3-12 3-11. Key Statistics for Crude Petroleum and Natural Gas Extraction (NAICS 211111): 2007 ............................................................................................................ 3-13 3-12. Key Statistics for Crude Natural Gas Liquid Extraction (NAICS 211112): 2007 .... 3-13 3-13. Aggregate Tax Data for Accounting Period 7/07

– 6/08: NAICS 211 ....................... 3-14 3-14. Key Statistics: Pipeline Transportation of Natural Gas (NAICS 48621) ($2007) .... 3-15 3-15. Direct Requirements for Pipeline Transportation (NAICS 486): 2002 ..................... 3-17 3-16. Aggregate Tax Data for Accounting Period 7/07–6/08: NAICS 486 ....................... 3-19 3-17 Key Enterprise Statistics by Employee Size for Pipeline Transportation of Natural Gas (NAICS 48621): 2007 ........................................................................... 3-20 3-18. Key Statistics: General Medical and Surgical Hospitals (NAICS 6221) ($2007) .... 3-23 3-19. Direct Requirements for Hospitals (NAICS 622): 2002 ........................................... 3-23 3-20. Data for General Medical and Surgical Hospitals (NAICS 6221): 2007 ................. 3-24 3-21. Hospital Statistics: 2010 ............................................................................................ 3-25 3-22. Aggregate Tax Data for Accounting Period 7/05

– 6/06: NAICS 622-4 .................... 3-25 3-23. Key Enterprise Statistics by Receipt Size for General Medical and Surgical Hospitals (NAICS 6221): 2007 ($2007) ................................................................... 3-27 3-24. Key Statistics: Farm Machinery and Equipment Manufacturing (NAICS 333111) ($2007) ........................................................................................................ 3-28 3-25. Key Statistics: Welding and Soldering Equipment Manufacturing (NAICS 333992) ($2007) ........................................................................................................ 3-29 3-26. Expenses per Acre by Type of Energy: 2008 ............................................................ 3-30ix 3-27. Number of On-Farm Pumps of Irrigation Water by Type of Energy: 2003 and 2008 .......................................................................................................................... . 3-30 3-28. Aggregate Tax Data for Accounting Period 7/05–6/06: NAICS 3331 and 3339 ...... 3-31 3-29. Key Enterprise Statistics by Receipt Size for Heavy Construction: 2007 ................ 3-34

4-1. CI RICE Control Technologies and Costs .................................................................. 4-9 4-2. Summary of Major Source and Area Source Costs for the CI RICE NESHAP ....... 4-24 4-3. Summary of Major Source and Area Source NAICS Costs for the CI RICE NESHAP ................................................................................................................... 4-25 4-4. Summary of Major Source and Area Source NAICS Costs for the CI RICE NESHAP – by Size .................................................................................................... 4-26 4-5. Summary of Major Source and Area Source NAICS Costs for the CI RICE NESHAP – by Number of Engines ........................................................................... 4-29 4-6. Summary of Major Source and Area Source Baseline Emissions for the CI RICE NESHAP – 2013 ...........................................................................4-36 4-7. Summary of Major Source and Area Source Emission Reductions for the CI RICE NESHAP – by 2013 .................. .........................................................4-36

5-1. Selected Industry-Level Annualized Compliance Costs as a Fraction of Total Industry Revenue: 2008 ............................................................................................... 5-4 5-2. Hypothetical Price Increases for a 1% Increase in Unit Costs .................................... 5-7 5-3. Hypothetical Consumption Decreases for a 1% Increase in Unit Costs ..................... 5-8 5-4. U.S. Electric Power a Sector Energy Consumption (Quadrillion BTUs): 2013 ......... 5-11 5-5 Labor-based Employment Estimates for Reporting and Recordkeeping and Installing, Operating, and Maintain ing Control Equipment Requirements for Proposed Reconsideration CI RICE NESHAP......................................................5-16

6-1. Final NESHAP for Existing Stationary Reciprocating Internal Combustion Engines (RICE): Affected Sectors and SBA Small Business Size Standards ............. 6-3 6-2. Average Receipts for Affected Industry by Enterprise: 2007 ($2008 Million/establishment) ................

................................ ........................ ......................... 6-5 6-3. Average Receipts for Affected Industry by Enterprise Receipt Range: 2007 ($2008 /establishment) ................................................................................................ 6-6 6-4. Representative Establishment Costs Used for Small Entity Analysis ($2008) ........... 6-8

7-1. Human Health and Welfare Effects of PM 2.5 .............................................................. 7-1 7-2. Summary of Monetized Co-benefits Estimates for RICE NESHAP for Compression Ignition in 2013 (2008$) ..................................................................... 7-11 7-3. Summary of Reductions in Health Incidences from PM 2.5 Co-benefits for RICE NESHAP in 2013 ...................................................................................................... 7-12 Deleted: 5-12x 7-4 All PM 2.5 Co-benefits Estimates for the RICE NESHAP at discount rates of 3% and 7% in 2013 (in millions of 2008$) ...................................................................... 7-13 7-5. Summary of the Annualized Benefits, Social Costs, and Net Benefits for the Proposed Reconsidered CI RICE NESHAP in 2013 ................................................. 7-321-1 SECTION 1 EXECUTIVE SUMMARY The EPA estimates that complying with the proposed reconsideration of the stationary compression ignition (CI) reciprocating internal combustion engine (RICE) rule will have an annualized cost of approximately $372 million per year (2008 dollars) or $373 million per year (2010 dollars) in the year of full implementation of the rule (2013). Using these costs, EPA estimates in its economic impact analysis that the NESHAP will have limited impacts on the industries affected and their consumers. Using sa les data obtained for affected small entities in an analysis of the impacts of this proposal on small entities, EPA expects that the NESHAP will not result in a SISNOSE (significant economic impacts for a substantial number of small entities). EPA also does not expect significant adverse energy impacts based on Executive Order 13211, an Executive Order that requires analysis of energy impacts for rules such as this one that are economically significant under Executive Order 12866. All of these analysis results are practically identical to the results for the CI RICE NESHAP when it was promulgated in March 2010. The RICE rule is also considered subject to the requirements of the Office of Management and Budget’s (OMB’s) Circular A-4 because EPA expects that either the benefits or the costs are potentia lly $1 billion or higher. EP A estimates the total monetized co-benefits of the NESHAP to be $770 million to $1.9 billion (2 010$) at a 3% discount rate and $690 million to $1.7 billion at a 7% discount rate in the year of full implementation of the rule (2013). The net benefits of the proposed CI RICE reconsideration are therefore $400 million to $1.5 billion at a 3% discount rate and $320 million to $1.3 billion at a 7% discount rate (in 2010$) in 2013. These estimates are shown in Table 1-1. These co-benefit estimates are lower than those for the rule promulgated two years ago. The previous co-benefit estimates were $940 million to $2,300 million (2008 dollars) at a 3-percent discount rate and $850 million to $2,100 million (2008 dollars) at a 7-percent discount rate. The previous estimates will be greater in a nominal (not inflation-adjusted) sense if shown in 2010 dollars, and thus the reduction in the benefits for the reconsidered rule compared to the benefits for the 2010 final rule will therefore be greater. EPA believes that the benefits are likely to exceed th e annualized costs by a substantial margin under this rulemaking even when taking into account uncertainties in the cost and benefit estimates

. These estimates are “snapshots” of benefits and costs at year 2013

.1-2 Table 1-1. Summary of the Annualized Monetized Benefits, Social Costs, and Net Benefits for the Proposed Reconsidered CI RICE NESHAP in 2013 (millions of 2010$) 1

3% Discount Rate 7% Discount Rate

Total Monetized Benefits 2 $770 to $1,900 $690 to $1,700 Total Compliance Costs 3 $373 $373 Net Benefits $400 to $1,500 $320 to $1,300

Non-monetized Benefits Health effects from HAP exposure Health effects from PM 2.5 exposure from VOC emissions Ecosystem effects Visibility impairment 1 All estimates are for the implementation year (2013), and are rounded to two significant figures. 2 The total monetized benefits reflect the human heal th benefits associated with reducing exposure to PM 2.5 through

reductions of PM 2.5 precursors such as directly emitted fine particle s. Human health benefits are shown as a range from Pope et al. (2002) to Laden et al. (2006). These mode ls assume that all fine particles, regardless of their chemical composition, are equally potent in causing prematur e mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. Because these estimates were generated using benefit-per-ton estimates, we do not break down the to tal monetized benefits into specific components here. See Figure 7-1 for an illustration of the breakdown, or the RIA for the final Cross-States Air Pollution Rule (EPA, 2011) for more information. 3 The annual compliance costs serve as a pr oxy for the annual social costs of this rule given the lack of difference between the two. The engineering compliance costs are annu alized using a 7 percent discount rate. These costs are $372 million in 2008 dollars.SECTION 2 INTRODUCTION EPA is proposing reconsideration of national emission standards for hazardous air pollutants (NESHAP) for existing stationary co mpression ignition (CI) reciprocating internal combustion engines (RICE) that either are locat ed at area sources of hazardous air pollutant (HAP) emissions or that have a site rating of less than or equal to 500 brake horsepower (HP) and are located at major sources of HAP The proposed amendments to the CI RICE NESHAP are provided in detail in Section 4 of this RIA. The rule is economically significant according to Executive Order 12866. As part of the regulatory process of preparing these standards, EPA has prepared a regulatory impact analysis (RIA). This analysis includes an analysis of impacts to small entities as part of compliance with the Small Business Regulatory Enforcement Fairness Act (SBREFA) and an analysis of impacts on energy consumption and production to comply with Executive Order 13211 (Statement of Energy Effects). An analysis of economic impacts, along with an analysis of impacts on employment, is also included in this RIA. Finall y, an analysis of the benefits of the rule is included in this RIA. It should be noted that the data that supports the analyses listed above have been updated where possible and appropriate from the data used in the RIA for the CI RICE NESHAP promulgated in March 2010. 2.1 Organization of this Report The remainder of this report supports and details the methodology and the results of the RIA:

 Section 3 presents a profile of the affected industries.

 Section 4 presents a summary of the proposed amendments to the proposed rule, and provides the compliance costs and emission reductions estimated for the rule.

 Section 5 describes the estimated costs of the regulation and describes the EIA methodology and reports market, welfare, energy, and employment impacts.

 Section 6 presents estimated impacts on small entities.

 Section 7 presents the benefits and net benefits (benefits – costs) estimates.SECTION 3 INDUSTRY PROFILE Stationary CI engines almost always oper ate as lean burn engines. They can be configured as either two-stroke lean burn (2SLB) or 4-stroke lean burn (4SLB); the distinction is that CI engines are fueled by distillate fuel o il (diesel fuel), not by natural gas or any other gaseous fuel. Industries in which st ationary CI engines are found are:

 electric power generation, transmissi on, and distribution (NAICS 2211),

 oil and gas extraction (including marginal wells) (NAICS 211111),

 pipeline transportation of natural gas (NAICS 211112),

 general medical and surgical hospitals (NAICS 622110), and

 irrigation sets and welding equipment (NAICS 335312 and 333992). This section provides an introduction to the industries affected by the proposed reconsidered rule. The purpose is to give the reader a general understanding of the economic aspects of the industry; their relative size, relati onships with other sectors in the economy, trends for the industries, and financial statistics. 3.1 Electric Power Generation, Transmission, and Distribution 3.1.1 Overview Electric power generation, transmission, a nd distribution (NAICS 2211) is an industry group within the utilities sector (NAICS 22). It includes establishments that produce electrical energy or facilitate its transmi ssion to the final consumer. From 2002 to 2007, revenues from electric power grew about 18% to over $440 billion ($2007) (Table 3-1). At the same time, payroll rose about 7.6% and the number of employees decreased by over 6%. The number of establishments rose by a little more than 2%, resulting in a increase in average establishment revenue of almost 24%. Industrial production within NAICS 2211 has increased 25% since 1997 (Figure 3-1). Electric utility companies have traditionally been tightly regulated monopolies. Since 1978, several laws and orders have been passed to encourage competition within the electricity market. In the late 1990s, many states began the process of restructuring their utility regulatory framework to support a competitive market. Foll owing market manipulati on in the early 2000s,however, several states have suspended their restru cturing efforts. The majority (58%) of diesel power generators controlled by combined heat and power (CHP) or independent power producers are located in states undergoi ng active restructuring (Figure 3-2). Table 3-1. Key Statistics: Electric Power Generation, Transmission, and Distribution (NAICS 2211) ($2007)

2002 2007 Revenue ($10 6 ) 373,309 440,342 Payroll ($10 6 ) 40,842 43,266 Employees 535,675 503,134 Establishments 9,394 9,611 Source: U.S. Census Bureau; Number of Firms, Number of Establishments, Employment, Annual Payroll, and Estimated Receipts by Enterprise Receipt Size for the United States, All Indust ries: 2007. Statistics for U.S. Businesses. Found at http://www.census.gov/econ/susb/data/susb2007.html

.Figure 3-1. Industrial Production Index (NAICS 2211) Source: The Federal Reserve Board. “Industrial Producti on and Capacity Utilization: Industrial Production” Series

ID: G17/IP_MINING_AND_UTILITY_DETAIL/IP.G2211.S <http://www.federalreserve.gov/datadownload/>. (January 27, 2010). 3.1.2 Goods and Services Used In Table 3-2, we use the latest detailed benchmark input-output data report by the Bureau of Economic Analysis (BEA) (2002) to identify the goods and services used in electric power generation. As shown, labor and tax requirements represent a significant share of the value of 80 85 90 95 100 105 110 1151997‐011997‐061997‐111998‐041998‐091999‐021999‐071999‐122000‐052000‐102001‐032001‐082002‐012002‐062002‐112003‐042003‐092004‐022004‐072004‐122005‐052005‐102006‐032006‐082007‐012007‐062007‐112008‐042008‐092009‐022009‐072009‐12IndexValue(Jan2002=100)Figure 3-2. Internal Combustion Generators by State: 2006 Source: U.S. Department of Energy, Energy Informati on Administration. 2007. “2006 EIA-906/920 Monthly Time

Series.” power generation. Extraction, transportation, refining, and equipment requirements potentially associated with reciprocating internal combustion engines (oil and gas extraction, pipeline transportation, petroleum refineries, and turbine manufacturing) represent around 10% of the value of services. 3.1.3 Business Statistics The U.S. Economic Census and Statistics of U.S. Businesses (SUSB) programs provide national information on the distribution of economic variables by industry, location, and size of business. Throughout this section and repo rt, we use the following definitions:

 Establishmen t: An establishment is a single physical location where business is conducted or where services or in dustrial operations are performed. Diesel and Natural Gas Internal Combustion Generators By State No Restructuring Suspended Restructuring Active Restructuring 100 50

10 1Table 3-2. Direct Requirements for Electri c Power Generation, Transmission, and Distribution (NAICS 2211): 2002

Commodity Commodity Description Direct Requirements Coefficients a V00100 Compensation of employees 20.52% V00200 Taxes on production and imports, less subsidies 13.71% 211000 Oil and gas extraction 6.16% 212100 Coal mining 5.86% 482000 Rail transportation 3.01% 230301 Nonresidential maintenance and repair 2.83% 486000 Pipeline transportation 1.70% 722000 Food services a nd drinking places 1.40% 52A000 Monetary authorities and depository credit intermediation 1.39% 541100 Legal services 1.13%

a These values show the amount of the commodity required to produce $1.00 of the industry’s output. The values

are expressed in percentage terms (coefficient ×100). Source: U.S. Bureau of Economic Analysis. 2002. 2002 Benchmark Input-Output Accoun ts: Detailed Make Table,

Use Table and Direct Requirements Table. Tables 4 and 5.

 Receipts : Receipts (net of taxes) are defined as the revenue for goods produced, distributed, or services provided, in cluding revenue earned from premiums, commissions and fees, rents, interest, divi dends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes.

 Firm : A firm is a business organization consisting of one or more domestic establishments in the same state and industry that were specified under commonownership or control. The firm and the establishment are the same for singleestablishment firms. For each multiestablishment firm, establishments in the same industry within a state are counted as one firm; the firm employment and annual payroll are summed from the associated establishments.

 Enterprise : An enterprise is a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multiestablishment company forms one enterprise; the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments. In 2002, Texas had almost 1,000 power establishments, while California, Georgia, and Ohio all had between 400 and 500 (Figure 3-3). Hawaii, Nebraska, and Rhode Island all had fewer than 20 establishments in their states.Figure 3-3. 2002 Regional Distribution of Establishments: Electric Power Generation, Transmission, and Distribution Industry (NAICS 2211) Source: U.S. Census Bureau; generate d by RTI International; using American FactFinder; “Sector 22: Utilities:

Geographic Area Series: Summary Statistics: 2002.” <http://factfinder.census.gov>; (November 10, 2008). As shown in Table 3-3, the four largest firms owned over 1,200 establishments and accounted for about 16% of total industry receipts/revenue. The 50 largest firms accounted for almost 6,000 establishments and about 78% of total receipts/revenue. Investor-owned energy providers accounted for 67.5% of retail electricity sold in the United States in 2006 (Table 3-4). In 2010, le ss regulated investor-owned electric utility companies were on average more profitable than companies with greater regulation (Table 3-5). In 2006, enterprises within NAICS 2211 had a pre-tax profit margin of only 0.9% (Table 3-6). 3.2 Oil and Gas Extraction 3.2.1 Overview Oil and gas extraction (NAICS 211) is an industry group within the mining sector (NAICS 21). It includes establishments that operate or develop oil and gas field properties Establishments by State

Less than 100 100 - 199 200 - 349 350 - 500 More than 500Table 3-3. Firm Concentration for Electric Power Generation, Transmission, and Distribution (NAICS 2211): 2002

Commodity Establishments Receipts/Revenue Number of Employees Employees per Establishment Amount ($10 6 ) Percentage of Total All firms 9,394 $325,028 100.0% 535,675 57 4 largest firms 1,260 $52,349 16.1% 68,432 54 8 largest firms 2,566 $95,223 29.3% 151,575 59 20 largest firms 3,942 $173,207 53.3% 271,393 69 50 largest firms 5,887 $253,015 77.8% 408,021 69 Source: U.S. Census Bureau; generated by RTI Internati onal; using American FactFinder; “Sector 22: Utilities:

Subject Series—Estab & Firm Size: Concentration by Largest Firms for the United States: 2002.” <http://factfinder.census.gov>; (November 21, 2008). through such activities as explor ing for oil and gas, drilling and equipping wells, operating onsite equipment, and conducting other activities up to the point of shipment from the property. Oil and gas extraction consists of two in dustries: crude petroleum and natural gas extraction (NAICS 211111) and natural gas liquid extraction (NAICS 211112). Crude petroleum and natural gas extraction is the larger industry; in 2007, it accounted for 93% of establishments and 75% of oil and gas extraction revenues. Industrial production in this industry is partic ularly sensitive to hurricanes in the Gulf Coast. In September of both 2005 and 2008, production dropped 14% from the previous month. From 2002 to 2007, revenues from crude petroleum and natural gas extraction (NAICS 211111) nearly doubled to $194 billion ($2007) (Table 3-8). At the same time, payroll increased 55% and the number of employees dropped by almost 40%. The number of establishments increased only slightly (1%); as a result, the average establishment revenue nearly doubled%. From 2002 to 2007, revenue from natural gas liquid extraction (NAICS 211112) grew over 19% to about $40 billion (Table 3-9). At th e same time, payroll increased by only 1% and the number of employees dropped by almost 14%. The number of establishments dropped by over 59%, resulting in an increase of revenue per establishment of about 85%.

### 3-9Table 3-4. United States Retail Electricity Sales Statistics: 2008Full-Service ProvidersOther ProvidersItem Investor-OwnedPublicFederalCooperativeFacilityEnergyDeliveryTotalNumber of entities362 1 25 1 NA NA92Number of retail customers46,985 2,160,220 36 940,697 1 NA NA 3,147,939Retail sales (103megawatthours) 2,25770,303 9,625 21,868 117 NA NA 104,170Percentage of retail sales267 9 21 0 — —100Revenue from retail sales ($106) 1135,934 473 1,994 6 NA NA 8,520Percentage of revenue1.3369.65 5.55 23.41 0.07 — —100Average retail price (cents/kWh) 5.018.44 4.91 9.12 5.25 NA NA8.18Source: U.S. Department of Energy, Energy Information Administration. 2009. “State Electricity Profiles 2008.” DOE/EIA-0348(01)/2. p. 260. <http://www.eia.doe.gov/cneaf/electricity/st_profiles/sep2008.pdf>.3-10 Table 3-5. FY 2010 Financial Data for 70 U.S. Shareholder-Owned Electric Utilities

Profit Margin Net Income Operating Revenues Investor-Owned Utilities 4. 81% $27,728 $371,545

Regulated a 6.80% $12,341 $158,657 Mostly regulated b 8.50% $17,815 $175,218 Diversified c -16.78% -$2,429 $37,671

a 80%+ of total assets are regulated. b 50% to 80% of total assets are regulated.

c Less than 50% of total assets are regulated. Source: Edison Electric Institute. “Income Statement: Q4 2010 Financial Update. Quarterly Report of the U.S.

Shareholder-Owned Electric Utility Industry.” <http://www.eei.org>. Table 3-6. Aggregate Tax Data for Accounting Period 2009: NAICS 2211

Number of enterprises a 1,187 Total receipts (10 3 ) $323,522,443 Net sales(10 3 ) $328,017,143 Profit margin before tax 3.1% Profit margin after tax 2.0%

a Includes corporations with and without net income. Source: Internal Revenue Service, U.S. Department of Treasury. 2010. “Corporation Source Book: Data Files 2000–

2009.” <http://www.irs.gov/taxstats/article/0 ,,id=167415,00.html>; (May 2, 2010).

3.2.2 Goods and Services Used The oil and gas extraction industry has similar labor and tax requirements as the electric power generation sector. Extraction, support, power, and equipment requirements potentially associated with reciprocating internal combustion engines (oil and gas extraction, support activities, electric power generation, machinery and equipment rental and leasing, and pipeline transportation) represent around 8% of the value of services (Table 3-10).3-11 3.2.3 Business Statistics The U.S. Economic Census and SUSB programs provide national information on the distribution of economic variables by industry, location, and size of business. Throughout this section and report, we use the following definitions:

 Establishment : An establishment is a single physical location where business is conducted or where services or in dustrial operations are performed.

### 3-12Table 3-7. Key Enterprise Statistics byEmployee Size for Electric Power Generation, Transmission, and Distribution (NAICS2211): 2007Variable All Enterprises<20Employees20–99Employee s100–499Employees500+EmployeesFirms 1,687 630 670 251 136Establishments 9,611 687 1,110 999 6,815Employment 503,1343,622 31,455 42,527425,530Receipts ($103) $440,342,284 $8,364,773 $21,825,969 $41,370,375 $368,781,167Receipts/firm ($103) $261,021 $13,277 $32,576 $164,822 $2,711,626Receipts/establishment($103)$45,817 $12,176 $19,663 $41,412 $54,113Receipts/employment($) $875 $2,309 $694 $973 $867Source: U.S. Census Bureau. 2010. “Firm Size Data from the Statistics of U.S. Businesses: U.S. All Industries Tabulated by Receipt Size: 2007.”<http://www.census.gov/csd/susb/susb07.htm>.3-13 Figure 3-4. Industrial Production Index (NAICS 211) Source: The Federal Reserve Board. “Industrial Producti on and Capacity Utilization: Industrial Production” Series

ID: G17/IP_MINING_AND_UTILITY_DETAIL/IP.G211.S <h ttp://www.federalreserve.gov/datadownload/>. (January 27, 2010). Table 3-8. Key Statistics: Crude Petroleum and Natural Gas Extraction (NAICS 211111): ($2007)

2002 2007 Revenue ($10 6 ) 98,667 194,107 Payroll ($10 6 ) 5,785 8,988 Employees 94,886 133,286 Establishments 7,178 7,221 Source: U.S. Census Bureau; Factfinder Series: “2002 and 2007.” <http:// factfinder.census.gov>; (February 23, 2012).

 Receipts : Receipts (net of taxes) are defined as the revenue for goods produced, distributed, or services provided, in cluding revenue earned from premiums, commissions and fees, rents, interest, divi dends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes. 75 80 85 90 95 100 105 1101997‐011997‐061997‐111998‐041998‐091999‐021999‐071999‐122000‐052000‐102001‐032001‐082002‐012002‐062002‐112003‐042003‐092004‐022004‐072004‐122005‐052005‐102006‐032006‐082007‐012007‐062007‐112008‐042008‐092009‐022009‐072009‐12IndexValue(Jan2002=100)3-14  Firm : A firm is a business organization consisting of one or more domestic establishments in the same state and industry that were specified under commonownership or control. The firm and the establishment are the same for singleTable 3-9. Key Statistics: Natural Gas Liquid Extraction (NAICS 211112) ($2007)

2002 2007 Revenue ($10 6 ) 33,579 39,978 Payroll ($10 6 ) 607 617 Employees 9,693 8,523 Establishments 511 321 Source: U.S. Census Bureau; 2002 and 2007.” <h ttp://factfinder.census.gov>; (February 23, 2012). Table 3-10. Direct Requirements for Oil and Gas Extraction (NAICS 211): 2002

Commodity Commodity Description Direct Requirements Coefficients a V00200 Taxes on production and imports, less subsidies 8.93% V00100 Compensation of employees 6.67% 230301 Nonresidential maintenance and repair 6.36% 211000 Oil and gas extraction 1.91% 213112 Support activities for oil and gas operations 1.51% 221100 Electric power generation, transmission, and distribution 1.47% 541300 Architectural, engineering, and related services 1.24% 532400 Commercial and industrial machinery and equipment rental and leasing 1.20% 33291A Valve and fittings other than plumbing 1.10% 541511 Custom computer programming services 0.99%

a These values show the amount of the commodity required to produce $1.00 of the industry’s output. The values

are expressed in percentage terms (coefficient ×100). Source: U.S. Bureau of Economic Analysis. 2002. 2002 Benchmark Input-Output Accoun ts: Detailed Make Table,

Use Table and Direct Requirements Table. Tables 4 and 5. establishment firms. For each multiestablishment firm, establishments in the same industry within a state are counted as one firm; the firm employment and annual payroll are summed from the associated establishments.

 Enterprise : An enterprise is a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multiestablishment company fo rms one enterprise; the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size3-15 designations are determined by the summed employment of all associated establishments.

As of 2007, there were 6,563 firms within the NAICS 211111 code, of which 6427 (98 percent) were considered small businesses (Table 3-11). Within NAICS 211111, large firms compose about 2 percent of the firms, but account for 59 percent of employment and generate about 80 percent of estimated receipts listed under the NAICS. Within NAICS 211112, there are 139 firms, of which 95 (71 percent) were considered small businesses (Table 3-12). As shown in this table, large firms compose 29 percent of the firms, but account for 78 percent of employment and generate about 95 percent of estimated receipts. Enterprises within NAICS 211111 generate d $194 billion in total receipts in 2007. Enterprises within NAICS 211112 generated nearly $40 billion in total receipts in 2007. Including those enterprises without net income, NAICS 211 averaged an after-tax profit margin of 8.5% in 2008 (Table 3-13). Table 3-11. Key Statistics for Crude Petroleum and Natural Gas Extraction (NAICS 211111): 2007

NAICS NAICS Description SBA Size Standard Small Firms Large Firms Total Firms Number of Firms by Firm Size Crude Petroleum and Natural Gas Extraction 500 6,329 95 6,424 Total Employment by Firm Size 55,622 77,664 133,286 Estimated Receipts by Firm Size ($1000) 44,965,936 149,141,316 194,107,252 Note: *The counts of small and large firms in NAICS 486210 is based upon firms with less than $7.5 million in receipts, rather than the $7 million required by the SBA Si ze Standard. We used this value because U.S. Census reports firm counts for firms with receipts less than $7. 5 million. **Employment and receipts could not be split between small and large businesses because of non-discl osure requirements faced by the U.S. Census Bureau. Source: U.S. Census Bureau. 2010. “Number of Firms, Nu mber of Establishments, Employment, Annual Payroll, and Estimated Receipts by Enterprise Receipt Size for the United States, All Industries: 2007.” <http://www.census.gov/econ/susb/>3-16 Table 3-12. Key Statistics for Crude Natural Gas Liquid Extraction (NAICS 211112): 2007

NAICS Description SBA Size Standard Small Firms Large Firms Total Firms Number of Firms by Firm Size Natural Gas Liquid Extraction 500 98 41 139

Total Em p lo y ment b y Firm Size 1,875 6,648 8,523 Estimated Receipts by Firm Size ($1000) 2,164,328 37,813,413 39,977,741 Note: *The counts of small and large firms in NAICS 486210 is based upon firms with less than $7.5 million in receipts, rather than the $7 million required by the SBA Si ze Standard. We used this value because U.S. Census reports firm counts for firms with receipts less than $7. 5 million. **Employment and receipts could not be split between small and large businesses because of non-discl osure requirements faced by the U.S. Census Bureau. Source: U.S. Census Bureau. 2010. “Number of Firms, Nu mber of Establishments, Employment, Annual Payroll, and Estimated Receipts by Enterprise Receipt Size for the United States, All Industries: 2007.” <http://www.census.gov/econ/susb/>

Table 3-13. Aggregate Tax Data for Accounting Period 7/07

– 6/08: NAICS 211

Number of enterprises a 19,441 Total receipts (10 3 ) $193,230,241 Net sales(10 3 ) $166,989,539 Profit margin before tax 12.9% Profit margin after tax 8.5%

a Includes corporations with and without net income. Source: Internal Revenue Service, U.S. Department of Treasury. 2010. “Corporation Source Book: Data Files 2004-

2007.” <http://www.irs.gov/taxstats/article /0,,id=167415,00.html>; (May 2, 2010).

3.3 Pipeline Transportation of Natural Gas 3.3.1 Overview Pipeline transportation of natural gas (NAICS 48621) is an industry group within the transportation and warehousing sector (NAICS 48-49), but more specifically in the pipeline3-17 transportation subsector (486). It includes the transmission of natural gas as well as the distribution of the gas through a local network to participating businesses. From 2002 to 2007, natural gas transportation revenues fell by 10% to just under $21 billion ($2007) (Table 3-15). At the same time, payroll decreased by 18% , while the number of paid employees decreased by nearly 32%. The number of establishments decreased by 13% from 1,701 establishments in 2002 to 1,479 in 2007. 3.3.2 Goods and Services Used The BEA reports pipeline transportation of natural gas only for total pipeline transportation (3-digit NAICS 486). In addition to pipeline transportation of natural gas (NAICS 4862), this industry includes pipeline transporta tion of crude oil (NAICS 4861) and other pipeline transportation (NAICS 4869). However, the BEA data are likely representative of the affected sector since pipeline transportation of natural gas accounts for 68% of NAICS 486 establishments and 72% of revenues (Figures 3-5 and 3-6).

Table 3-14. Key Statistics: Pipeline Transportation of Natural Gas (NAICS 48621) ($2007)

Year 2002 2007 Revenue ($10 6 ) 22,964 20,797 Payroll ($10 6 ) 2,438 2,064 Employees 32,542 24,683 Establishments 1,701 1,479

Source: U.S. Census Bureau; generated by RTI Interna tional; using American FactFinder; “Sector 48: EC0748I1:

Transportation and Warehousing: Industry Series: Preliminary Summary Statistics for the United States: 2002 and 2007.” http://factfinder.census.gov (January 27, 2010). In Table 3-15, we use the latest detailed benchmark input-output data report by the BEA (2002) to identify the goods and services used by pipeline transportation (NAICS 486). As shown, labor, refineries, and maintenance require ments represent significant share of the cost associated with pipeline transportation. Power a nd equipment requirements potentially associated with reciprocating internal combustion engines (electric power generation and commercial and industrial machinery and equipment repair and main tenance) represent less than 2% of the value of services.3-18 Figure 3-5. Distribution of Establishments within Pipeline Transportation (NAICS 486) Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48:

Transportation and Warehousing: Industry Series: Summary Statistics for the United States: 2002” <http://factfinder.census.gov>; (December 12, 2008).

Figure 3-6. Distribution of Revenue within Pipeline Transportation (NAICS 486) Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48:

Transportation and Warehousing: Industry Series: Summary Statistics for the United States: 2002” <http://factfinder.census.gov>; (December 12, 2008). 68%

21% 11%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

4862 Pipeline Transportation of Natural Gas 4869 Other Pipeline Transportation 4861 Pipeline Transportation of Crude Oil

72%

16% 12%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

4862 Pipeline Transportation of Natural Gas 4869 Other Pipeline Transportation 4861 Pipeline Transportation of Crude Oil3-19 Table 3-15. Direct Requirements for Pipeline Transportation (NAICS 486): 2002

Commodity Commodity Description Direct Requirements Coefficients a V00100 Compensation of employees 14.78% 324110 Petroleum refineries 13.55% 230301 Nonresidential maintenance and repair 6.07% 211000 Oil and gas extraction 4.94% 333415 Air conditioning, refrigeration, and warm air heating equipment manufacturing 4.40%

561300 Employment services 4.26% 5416A0 Environmental and other technical consulting services 3.04% 541300 Architectural, engineering, and related services 3.04% 420000 Wholesale trade 2.79% 332310 Plate work and fabricated structural product manufacturing 2.72% 5419A0 All other miscellaneous professional, scientific, and technical services 2.48% 524100 Insurance carriers 2.38% 531000 Real estate 2.33% 52A000 Monetary authorities and depository credit intermediation 1.76% V00200 Taxes on production and imports, less subsidies 1.41% 541100 Legal services 1.19% 221100 Electric power generation, transmission, and distribution 1.13%

a These values show the amount of the commodity required to produce $1.00 of the industry’s output. The values

are expressed in percentage terms (coefficient ×100). Source: U.S. Bureau of Economic Analysis. 2002. 2002 Benchmark Input-Output Accoun ts: Detailed Make Table,

Use Table and Direct Requirements Table. Tables 4 and 5. According to 2007 U.S. Census data, about 86% of transportation of natural gas establishments were owned by corporations and about 8% were owned by individual proprietorships. About 6% were owned by partnerships (Figure 3-7). Enterprises within pipeline transportation (NAICS 486) generated $11.1 billion in totalreceipts in 2007. Including those enterprises without net income, the industry averaged an aftertax profit margin of 9.6% (Table 3-16). The 2007 SUSB shows that about half of all firms have fewer than 20 employees, but only 1% of all employees in this industry. Firms with more than 500 employees generate 89% of all receipts in this industry (Table 3-17).3-20 Figure 3-7. Share of Establishments by Legal Form of Organization in the Pipeline Transportation of Natural Gas Industry (NAICS 48621): 2002 Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48-49:

Transportation and Warehousing: Subject Series—Estab & Firm Size: Legal Form of Organization for the United States: 2002” <http://factfinder .census.gov>; (D ecember 12, 2008).

Table 3-16. Aggregate Tax Data for A ccounting Period 7/07–6/08: NAICS 486

Number of enterprises a 321

Total receipts (10 3 ) $11,062,608

Net sales (10 3 ) $10,210,083 Profit margin before tax 13.2% Profit margin after tax 9.6%

a Includes corporations with and without net income. Source: Internal Revenue Service, U.S. Department of Treasury. 2010. “Corporation Source Book: Data Files 2004-

2007.” <http://www.irs.gov/taxstats/article /0,id=167415,00.html>; (May 2, 2010). 86%

8% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Corporations Individual Proprietorships Partnerships3-21 Table 3-17. Key Enterprise Statistics by Employee Size for Pipeline Transportation of Natural Gas (NAICS 48621): 2007

Variable All Enterprises <20 Employees 20–99 Employees 100–499 Employees 500+ Employees Firms 126 63 12 9 42 Establishments 1.479 66 26 70 1,317 Employment 24,683 241 382 1,479 22,581 Receipts ($10 3 ) $20,796,681 N/A $518,341 $1,448,020 $18,498,143 Receipts/firm ($10 3 ) $165,053 N/A $43,195 $160,891 $440,432 Receipts/establishment ($10 3 ) $14,061 N/A $19,936 $20,686 $14,046 Receipts/employment ($) $843 N/A $1,357 $979 $819

Source: U.S. Census Bureau. 2011. Firm Size Data from the Statistics of U.S. Businesses, U.S. All Industries

Tabulated by Employee Size: 2007. http://www2.census.gov/csd/susb/2007/usalli_r07.xls.

3.4 General Medical and Surgical Hospitals 3.4.1 Overview General medical and surgical hospitals (NAICS 6221) is an industry group within the health care and social assistance sector (NAICS 62). It includes hospitals engaged in diagnostic and medical treatment (both surgical and nonsurgical) for inpatients with a broad range of medical conditions. They usually provide other services as well, including outpatient care, anatomical pathology, diagnostic X-rays, clini cal laboratory work, and pharmacy services. From 2002 to 2007, hospital revenues grew about 21% to over $650 billion ($2007) (Table 3-18). At the same time, payroll ro se about 15%, while the number of employees increased by only 6%. The number of establishments increased during this period by almost 4%, resulting in an increase in revenue per establishment of almost 16%. 3.4.2 Goods and Services Used The BEA reports hospital expenditures only for hospitals (3-digit NAICS 622). In addition to general hospitals (NAICS 6221), this industry includes psychiatric and substance abuse hospitals (NAICS 6222) and specialty hospitals (NAICS 6223). However, these data3-22 should be representative of the affected sect or since in 2007, general medical and surgical hospitals accounted for 92% of NAICS 622 establishments and 94% of revenues. In Table 3-19, we use the latest detailed benchmark input-output data report by the BEA (2002) to identify the goods and services used by hospitals (NAICS 622). As shown, labor and land requirements represent a significant share of the value of hospital services. Power and equipment requirements potentially associated with reciprocating internal combustion engines (electric power generation and commercial and industrial machinery and equipment repair and maintenance) represent less than 2% of the value of services.3-23 Table 3-18. Key Statistics: General Medical and Surgical Hospitals (NAICS 6221) ($2007)

2002 2007 Revenue ($10 6 ) 539,502 651,639 Payroll ($10 6 ) 209,063 240,638 Employees 4,772,422 5,042 Establishments 5,193 5,404 Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 62: Health Care

and Social Assistance: Geographic Area Series: 2002 and 2007.” <http://factfinder.census.gov>; (February 22, 2012). Table 3-19. Direct Requirements for Hospitals (NAICS 622): 2002

Commodity Commodity Description Direct Requirements Coefficients a V00100 Compensation of employees 51.90% 531000 Real estate 10.76% 550000 Management of companies and enterprises 4.02% 621B00 Medical and diagnostic labs a nd outpatient and other ambulatory care services 2.22%

561300 Employment services 1.90% 325412 Pharmaceutical preparation manufacturing 1.86% 325413 In-vitro diagnostic substance manufacturing 1.66% 524100 Insurance carriers 1.66% 420000 Wholesale trade 1.62% 221100 Electric power generation, transmission, and distribution 1.14%

a These values show the amount of the commodity required to produce $1.00 of the industry’s output. The values

are expressed in percentage terms (coefficient ×100). Source: U.S. Bureau of Economic Analysis. 2002. 2002 Benchmark Input-Output Accoun ts: Detailed Make Table,

Use Table and Direct Requirements Table. Tables 4 and 5. 3.4.3 Business Statistics In 2010, the United States had 5,754 hospitals (Table 3-20). As shown in Table 3-1, nongovernmental not-for-profit hospitals accounted for 2,904 (or 50%) of these hospitals, and State and local government hospitals accounted for 1,068 (or 19%) of these hospitals.3-24 General medical and surgical hospitals (NAICS 6221) generated $652 billion in totalreceipts in 2007. Including those enterprises without net income, the industry averaged an aftertax profit margin of 3.1% (Table 3-22).

Figure 3-8. Share of Establishments by Legal Form of Organization in the General Medical and Surgical Hospitals Industry (NAICS 6221): 2002 Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 62: Health Care

and Social Assistance: Subject Series—Estab & Firm Size: Legal Form of Organization for the United States: 2002” <http://factfinder.census.gov>; (November 21, 2008). Table 3-20. Data for General Medical and Surgical Hospitals (NAICS 6221): 2007

Commodity Establishments Amount ($10 6 ) Number of Employees Employees per Establishment All firms 5,404 $651,639 5,041,848 933 Source: U.S. Census Bureau, 2011; Statistics for U.S. Businesses (SUSB), 2007. 79.6%

19.5%

0.7% 0.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Corporations Partnerships Individual Proprietorships Other Legal Forms of Organization3-25 Table 3-21. Hospital Statistics: 2010

Hospitals Number Total 5,754Nongovernment not-forprofit 2,904 Investor-owned (for-profit) 1,013 State and local government 1,068 Federal government 213

NA = Not available Source: American Hospital Associati on. 2011. “AHA Hospital Statistics : 2010 Edition.” Health Forum. Table 3-22. Aggregate Tax Data for Accounting Period 7/05

– 6/06: NAICS 622-4

Number of enterprises a 18,263 Total receipts (10 3 ) $108,074,793 Net sales(10 3 ) $102,300,229 Profit margin before tax 4.4% Profit margin after tax 3.1%

a Includes corporations with and without net income. Source: Troy, Leo. 2008. “Almanac of Business and Industrial Financial Ratios: 2009 Edition.” CCH. 3.5 Irrigation Sets and Welding Equipment 3.5.1 Overview The U.S. Economic Census classifies irriga tion equipment under the farm machinery and equipment manufacturing industry group (NAICS 333111). This U.S. industry comprises establishments primarily engaged in manufacturing agricultural and farm machinery andequipment and other turf and grounds care equipment, including planting, harvesting, and grassmowing equipment (except lawn and garden type). From 2002 to 2007, farm machinery and equipment manufacturing revenues increased by $8 billion from $15 billion to $23 billion (Table 3-23). At the same time, payroll increased by 21% and the number of paid employees increased by nearly 9%. The number of establishments dropped by 2% from 1,214 establishments in 2002 to 1,191 in 2007. Industrial production in the industry has been increasing since 1997 (Figure 3-9).3-26 The U.S. Economic Census classifies welding equipment under the welding and soldering equipment manufacturing industry group (NAICS 333992). This U.S. industry comprises establishments primarily engaged in manufacturing welding and soldering equipment and accessories (except transformers), such as welding electrodes, welding wire, and soldering equipment (except handheld). From 2002 to 2007 welding and soldering equipment manufacturing revenue increased by about 53% to nearly $6 billion (Table 3-24). At the same time, payroll increased by 12% and the number of paid employees increased by nearly 9%. The number of establishments increased by 31% from 250 establishments in 2002 to 303 in 2007. 3.5.2 Irrigation and Welding Services The demand for equipment is derived from the demand for the services the equipment provides. We describe uses and indust rial consumers of this equipment. 3.5.2.1 Irrigation Demand for irrigation equipment is driven by farm operation decisions, optimal replacement considerations, and climate and weather conditions. The National Agriculture Statistics Service (NASS) 2008 Farm and Ranch Irrigation Survey (USDA-NASS, 2010) showsPut page number here



### 3-27Table 3-23. Key Enterprise Statistics by Employee Size for General Medical and Surgical Hospitals (NAICS 6221): 2007($2007)VariableAllEnterprises <20 Employees20-99Employees100-499Employees 500+ EmployeesFirms 3,225 170 277 1,227 1,551Establishments 5,404 173282 1,2863,663Employment 5,041,848 606 18,718 294,247 4,728,277Receipts ($103) $651,639,328 346.216 1,553,004 $27,889,532 $621,850,576Receipts/firm ($103) $202,059 2,037 5,607 $22,730 $400,935Receipts/establishment($103)$120,585 2,001 5,508 $21,687 $169,766Receipts/employment($)$129 $571$83$95$132Source: U.S. Small Business Administration (SBA). 2010. “Firm Size Data from the Statistics of U.S. Businesses: U.S. All Industries Tabulated by Receipt Size:2007.” <http://www.census.gov/csd/susb/susb07.htm>.3-28 Table 3-24. Key Statistics: Farm Machinery and Equipment Manufacturing (NAICS 333111) ($2007)

2002 2007 Revenue ($10 6 ) $15,006 $23,009 Payroll ($10 6 ) $2,132 $2,580 Employees 53,817 58,838 Establishments 1,214 1,191 Source: U.S. Census Bureau, Statistics of U.S. Business (SUSB), 2007.

Figure 3-9. Industrial Production Index (NAICS 333111) 40 50 60 70 80 90 100 110 120 130Index Values (Jan-97=100) Industrial Production Index (NAICS 333111)3-29 Table 3-25. Key Statistics: Welding and Soldering Equipment Manufacturing (NAICS 333992) ($2007)

2002 2007 Revenue ($10 6 ) $3,880 $5,935 Payroll ($10 6 ) $811 $910 Employees 16,128 17,529 Establishments 231 303 Source: U.S. Census Bureau; using American FactFinder; “Sector 31: Manufacturing: Industry Series: Historical

Statistics for the Industry: 2002 and 2007” <http://factfinder.census.gov>; (February 15, 2012). that the top five states ranked by total acres ir rigated are Nebraska, California, Texas, Arkansas, and Idaho. Virtually all of the irrigated areas in the U.S. are west of the Mississippi River. The survey reported that approximately 546,000 pumps were used on U.S. farms in 2008 with energy expenses totaling approximately $2.7 billion. Electricity is the dominant form of energy expense for irrigation pumps, accounting for 59 % of total energy expenses. Diesel fuel is second (25%), followed by natural gas (17%) and other forms of energy such as gasoline (2%). Per-acre operating costs for these irrigation sy stems vary by fuel type, and natural gas was the most expensive in 2008 ($93 per acre for well systems and $44 per acre for surface water systems) (Table 3-26). Systems using diesel fuel were operated at approximately half of these per-acre costs ($54 per acre for well systems and $42 per acre for surface water systems). Gasoline- and gasohol-powered systems offered the least expensive operating costs for well systems ($39 per acre) and electricity-power sy stems offered the least expensive operating costs for surface water systems ($45 per acre). As shown in Table 3-27, the number of on-farm pumps increased to 546,308 from 489,434 (12%) between 2003 and 2008. The use of electric- and diesel-powered pumps increased during this peri od (21% and 3%, respectively), while other fuel sources such as liquid petroleum (LP) gas, propane, and butane declined significantly (31%).3-30 Table 3-26. Expenses per Acre by Type of Energy: 2008

Fuel Type Irrigated by Water from Wells Irrigated by Surface Water Electricity $57.80 $35.07 Natural gas $93.03 $43.85 LP gas, propane, butane $38.72 $45.40 Diesel fuel $54.20 $41.94 Gasoline and gasohol $84.98 $39.24 Total $60.90 $36.13 Source: U.S. Department of Agriculture, National Agri cultural Statistics Service. 2010. “2008 Farm and Ranch

Irrigation Survey.” Washington, DC: USDA-NA SS. Table 20. Found on the Internet at http://www.agcensus.usda.gov/Publications/2007/On line_Highlights/Farm_and_Ra nch_Irrigation_Survey/fris08_ 1_20.pdf

. Table 3-27. Number of On-Farm Pumps of Irrigation Water by Type of Energy: 2003 and 2008

Fuel Type 2003 2008 Percentage Change Electricity 312,145 377,492 21% Natural gas 41,768 36,176 –13% LP gas, propane, butane 17,786 12,203 –31% Diesel fuel 112,133 115,249 3% Gasoline and gasohol 5,602 5,188 –7% Total 489,434 546,308 12% Source: U.S. Department of Agriculture, National Agricu ltural Statistics Service. 2010. “2008 Farm and Ranch

Irrigation Survey.” Washington, DC: USDA-NA SS. Table 20. Found on the Internet at http://www.agcensus.usda.gov/Publications/2007/Online_Highlights/Farm_and_Ranch_Irrigation_Survey/fris08_ 1_20.pdf Although no information is available on the use and construction of on-farm pumps specifically, their use is tied to the amount of agricultural land in production. USDA reports that planted acres of the eight major crops hit a 5-year high of 252 million acres in 2008 but will fall and level off to around 244 million acres over the next 2 to 4 years (USDA, 2008). 3.5.2.2 Welding Welding is used in a wide variety of applications. One of the biggest manufacturers of welding products identifies the following key end-user segments:

 general metal fabrication;3-31  infrastructure including oil and gas pipelines and platforms, buildings, bridges, and power generation;

 transportation and defense industries (autom otive, trucks, rail, ships, and aerospace);

 equipment manufacturers in construction, farming, and mining;

 retail resellers; and

 rental market (Lincoln Electric Holdings, 2006). Lincoln Electric further describes the following key applications: power generation and process industries, offshore production of oil and gas, pipelines/pipemills, and heavy fabrication (earthmoving and construction equipment and agricultural and farm equipment. 3.5.3 Business Statistics Enterprises within agriculture, construc tion, and mining machinery manufacturing (NAICS 3331) generated $88 billion of total receipts in 2007, while those in other general purpose machinery manufacturing (NAICS 3339) ge nerated $85.7 billion. The average after-tax profit margin in these two industries was 6.9% and 4.7%, respectively (Table 3-28). Table 3-28. Aggregate Tax Data for Account ing Period 7/05–6/06: NAICS 3331 and 3339

Agriculture, Construction, & Mining Machinery Manufacturing Other General Purpose Machinery Manufacturing Number of enterprises a 3,064 6,231 Total receipts (10 3 ) $88,255,496 $85,653,046

Profit margin before tax 9.1% 6.1% Profit Margin after tax 6.9% 4.7%

a Includes corporations with and without net income. Source: Troy, Leo. 2008. “Almanac of Business and Industrial Financial Ratios: 2009 Edition.” CCH. As noted earlier, welding equipment is used in heavy fabrication such as earthmoving and construction equipment. We focus on the size di stribution for a representative sector in this section (NAICS 237, Heavy and Civil Engineering Construction); other subsections in Section 3 cover other sectors that potentially use equipment powered by diesel engines (e.g., power generation and offshore gas distribution). As show n in Table 3-29, SUSB data suggest that more than 80% of firms are below the Small Business Administration (SBA) small business size3-32 standard for this industry. However, it is not clear what fraction of these firms use stationary diesel engines.

### 3-33Table 3-29. Key Enterprise Statistics byReceipt Size for Heavy Construction: 2007aVariable All Enterprises<20Employees20–99Employees100–499Employees 500+Firms 49,228 40,654 6,793 1,422 359Establishments 51,421 40,670 6,947 1,847 1,987Employment 1,016,407 183,487 273,867 238,342 320,711Receipts ($103) $263,941,774 $46,766,241 $68,078,765 $69,190,739 $79,906,029Receipts/firm ($103) $5,362 $1,150 $10,022 $48,657 $222,579Receipts/establishment($103)$5,133 $1,150 $9,800 $37,461 $40,214Receipts/employment($)$260 $255 $249 $290 $249a2007 SUSB. The most comparable 2007 NAICS code for this industry is 237.Source: U.S. Census Bureau. 2012b. Firm Size Data from the Statistics of U.S. Businesses, U.S. All Industries Tabulated by Receipt Size: 2007.http://www2.census.gov/csd/susb/2007/usalli_r07.xls.4-1 SECTION 4 REGULATORY ALTERNATIVES, COSTS, AND EMISSION IMPACTS 4.1 Background This section of the RIA includes a discussion of the regulatory alternatives considered for the proposed reconsidered rule, the costs associ ated with these regulatory alternatives, and the impacts on affected emissions (both HAP and non- HAP). All impacts presented are for the year of full implementation, 2013. Costs in the chapter are in 2008$. Costs in 2010$ shown in other parts of the RIA are escalated values of these 2008$. Although the estimates presented are annualized, they should be understood as a “snapshot” in analyzing costs. After promulgation of the 2010 RICE NESHAP amendments, the EPA received several petitions for reconsideration, legal challenges , and other communications raising issues of practical implementability, and certain factual information that had not been brought to the EPA’s attention during the rulemaking. The EPA has considered this information and believes that amendments to the rule to address certain of these issues are appropriate. Therefore , the EPA is proposing amendments to NESHAP for stationary RICE signed in March 2010 for CI engines and August 2010 for SI engines under section 112 of the Clean Air Act. This proposal was developed to address certain issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments and other communications. The proposed amendments include alternative testing options for certain large spark ignition (generally natural gas-fueled) stationary reciprocating internal combustion engines, management practices for a subset of existing spark ignition stationary reciprocating internal combustion engines in sparsely populated areas, and alternative and less burdensome monitoring and compliance options for the same engines in populated areas. The EPA is also proposing to include a limited temporary allowance for existing stationary emergency area source engines to be used for peak shaving and non-emergency demand response as part of the pre-existing allowance for such engines to be used for non-emergency use for 50 hours annually. In addition, the EPA is proposing, in both the NESHAP and in the new source performance standards for stationary internal combustion engines to increase the hours that stationary emergency engines may be used for emergency demand response. The proposed amendments also correct minor mistakes in the pre-existing regulations. EPA has taken several actions over the past several years to reduce exhaust pollutants from stationary diesel engines, but believes that further reducing exhaust pollutants from stationary diesel engines, particularly existing stationary diesel engines that have not been4-2 subject to federal standards, is justified. Therefore, EPA is issuing this rulemaking that reconsiders the 2010 final rule requiring emissions reductions from existing stationary diesel engines. The full preamble for the final CI RICE NESHAP and the rule itself can be reviewed at http://www.epa.gov/ttn/atw/rice/fr03mr10.pdf

.

4.2 Summary of the Proposed Reconsideration Rule 4.2.1 Proposed Amendment - Emergency Demand Response/Peak Shaving 4.2.1.1 Background This action proposes to amend provisions in the RICE NESHAP that currently allow owners and operators to operate stationary emergency engines for up to 15 hours per year as part of a demand response program if the RTO or equivalent balancing authority and transmission operator have determined there are emergency conditions that could lead to a potential electrical blackout, such as unusually low frequency, equi pment overload, capacity or energy deficiency, or unacceptable voltage level. The final rule did not allow emergency engines to be used for purposes of peak shaving or other non-emergency purposes as part of a financial arrangement. These provisions were included in the RICE NESH AP when requirements for existing stationary CI engines were finalized on March 3, 2010 (75 FR 9648). Following the completion of that portion of the rule, the EPA received three main petitions for reconsideration. One petition was from CPower, Inc., EnergyConnect, Inc., EnerNOC, Inc., and Innoventive Power, LLC. (EnerNOC et al.)(EPA-HQ- OAR-2008-0708-0404). Another petition was received from the Delaware Department of Natural Resources and Environmental Control (DE DNREC) (EPAHQ-OAR-2008-0708-0400). The third petition wa s from the National Rural Electric Cooperative Association (NRECA) (OAR-2008-0708-0580). In addition to these main petitions the EPA received a substantial number of letters from others in the electric generation industry. The petition from EnerNOC, et al., asked that EPA increase the period of time permitted for emergency demand response operation in the rule to 60 hours per year, or the minimum number of hours required by the emergency demand response program. By contrast, the DE DNREC petition asked EPA to reconsider the emergency demand response provision because of the adverse effects that it believes would result from increased emissions from these engines. The petition from NRECA requested that the EP A eliminate the restriction on the use of4-3 stationary emergency engines for demand response purposes. The EPA granted the petitions from EnerNOC, et al., DE DNREC and NRECA, and issued a notice on December 7, 2010 (75 FR 75937), requesting comments on whether to amend the 15 hours per year limitation on the operation of stationary emergency RICE participating in emergency demand response programs. The EPA received more than 120 comments from a number of different entities including various state agencies, utilities, electric coop eratives and industry organizations. Many commenters expressed that 15 hours per year is not sufficient to meet current emergency demand response requirements for participation. For example, several emergency demand response programs have ISO tariff requirements greater than 15 hours per year, including the Electric Reliability Council of Texas emergency demand response program, which has a tariff requirement of 24 hours per year; the Pennsylvan ia Jersey Maryland (“PJM”) Interconnection, known as the Emergency Load Response Program, which has a tariff requirement of 60 hours per year; and the ISO New England (“ISO-NE”), which forecasts that backup resources would be expected for 55 hours over a 12-month period. Tariff requirements are developed to specify the mandatory time load resources (engines) must be willing and able to operate if the units are enrolled in the program. Conversely, some commenters urged the EPA to allow stationary emergency engines to only operate during true emergencies or when voltage or frequency varies beyond specified parameters. Based on the EPA’s review of the petitions and comments that the EPA has received, the EPA has found it appropriate to propose to amend the current rule to increase the allowance for stationary emergency engine participation in emergency demand response programs to up to 100 hours per year, which would be included as part of the pre-existing allowance of 100 hours for owners of emergency engines to test and maintain their emergency engines. The EPA believes that the emergency demand response programs that exist across the country are important programs that protect the reliability and stabilit y of the national electric service grid. Allowing stationary emergency engines to operate as part of emergency demand response programs can help prevent grid failure or blackouts, by allowing these engines to be used in circumstances of grid instability prior to the occurrence of blackouts. Preventing stationary emergency engines from being able to qualify and participate in emergency demand response programs without having to apply aftertreatment could force owners and operators to leave their engines out of these programs, which will impair the ability of ISOs and RTOs to use these relatively small, quick-starting and reliable sources of energy to protect the reliability of their systems. The EPA does not wish to potentially jeopardize electrical reliability or create a disincentive for stationary emergency engines to participate in these programs. The circumstances during which the EPA4-4 would allow stationary emergency engines to operate for emergency demand response purposes include periods during which the regional tran smission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency, plus during periods where there is a deviation of voltage or frequency of 5 percent or more below standard voltage or frequency. During EEA Level 2 alerts there is insufficient energy suppl y and a true potential for electrical blackouts. System operators must call on all available resources during EEA Level 2 alerts in order to stabilize the grid to prevent failure. Therefore, this situation is a good indicator of severe instability on the system. Consistent normal volta ge provided by the utility is often called power quality and is an important factor in local elect ric system reliability. Reliability of the system requires electricity being provided at a normal expected voltage. The American National Standards Institute standard C 84.1-1989 defines the maximum allowable voltage sag at below 5 percent. On the local distribution level local voltage levels are therefore important and a 5 percent or more change in the normal voltage or frequency is substantial and an indication that additional resources are needed to ensure local distribution system reliability. This situation would be indicative of severe instability on the system. Emergency demand response programs rely on agreements under which owners of engine agree to make their engines available to be called upon for a specific number of hours per year, as required by the relevant ISO or RTO tari ff, under specified circumstances considered to indicate emergencies. In order to be enrolled in an emergency demand response program, participants must qualify their engines and must be able to use their emergency engines for the number of hours the program requires. Engines are not generally called upon for the maximum hours required by the tariffs. However, even though the engine may not be called at all or may run for fewer hours than the program requires it to be available in a particular year, the engine must still be available for those theoretical number of hours in order to join the program. Demand response contracts require more hours than the 15 hours per year that is currently in the regulations, and the commenters state that the 15 hours per year is not a sufficient amount of time to ensure the reliability of the program; so me programs require up to 60 hours per year, as discussed earlier. For these reasons, the EPA believes it is appropriate to allow additional hours for emergency demand response operation in order for such programs to be accessible to stationary emergency engines. Consequently, the EPA is proposing amendments to the rule to increase the limitation on emergency demand response operation to 100 hours per year for stationary emergency engines. It is expected th at owners and operators of stationary emergency engines that seek to qualify their units as dema nd resources would with the proposed increase to4-5 100 hours per year be able to meet the operational and qualification requirements of the different ISOs and RTOs in the country. As stated, stationary emergency engines that participate in demand response programs may not be called upon at all, but must nonetheless be available to operate for the required amount stipulated by the specific program. The purpose of the limited allowance for demand response is to respond to emergencies, and the EPA is persuaded by the information that has been submitted that 15 hours per year is an insufficient amount of time to allow for emergency demand response needs, given past experience. The EPA believes 100 hours per year is sufficient to cover any potential demand response operation as well as the required maintenance and testing that is also included within the 100 hours of operation. The EPA has previously determined that stationary emergency engines typically operate well below 50 hours per year and more commonly about 1 to 2 hours per month. A survey conducted by the California Air Resources Board (CA ARB) indicated the average yearly operation for emergency diesel engines was 31 hours over a period of 3 years. The majority of those hours were for the purpose of maintenance and testing; less than 5 hours was for interruptible service contracts, and the remaining amount for emergency/standby operation (EPA-HQ-OAR-2005-0029-0011). Data from demand response programs in ISO-NE and PJM territories show that backup generation was dispat ched for less than 30 hours during the summers of 2008, 2009 and 2010. However, again, emergency units must be available to operate more than that in most cases to qualify for demand response programs. For instance, PJM requires a minimum ISO tariff of 60 hours per year of engine availability for pr ogram participation. Consequently, in order to ensure that a sufficient amount of operating time is available for maintenance and readiness testing, and for demand response operation, the EPA is proposing 100 hours of operation. A number of commenters requested that an allowance of 100 hours per year be allowed in order to provide adequate hours consistent with minimum required hours that customers must be available to operate and to address local distribution system emergencies. For instance, in Hawaii, the emergency demand response program operated by the Hawaiian Electric Company requires that emergency engines be able to operate for 100 hours per year in the event of an emergency in order to participate in the program. In order to provide a sufficient amount of time to cover annual maintenance and testing, which is typically more than 20 hours per year according to the survey conducted by CA ARB (see EPA-HQ-OAR-2005-0029-0011), plus to cover hours necessary for qualifying for emergency demand response programs or local distribution system emergencies, EPA believes an allowance of 100 hours per year would be4-6 appropriate for these activities. Taking into account that there may be situations where annual maintenance and testing could exceed the typical 1 to 2 hours per month and accounting for other emergency demand response programs that require more than 60 hours per year for program participation (e.g., the Hawaiian Electric Company), the EPA believes that 100 hours per year is appropriate for emergency demand response plus maintenance and testing. The proposed amendment to the rule would mean that stationary emergency engines could operate for a total of 100 hours per year for emergency demand response operation as part of the 100 hours already permitted for maintenance and readiness testing while maintaining their status as emergency units, rather than non-emergency units, and continue to meet the requirements that apply to emergency engines. On the issue of peak shaving and non-emergency demand response, the EPA is proposing to include a temporary limited allowance for peak shaving and other types of non-emergency use as part of a financial arrangement for existing stationary emergency engines at area sources of HAP, if the peak shaving is done as part of a peak shaving (or load management) program with the local distribution system operator. The power generated under this allowance can only be used at the facility or towards the local system. The EPA has determined that it is appropriat e to include the option for existing stationary emergency engines at area sources to operate for a small number (50) of hours per year for anynon-emergency reason to generate income locally and not be penalized or considered a nonemergency engine and subsequently required to install aftertreatment that could be prohibitively costly for these sources in the near term. The EPA is proposing that the 50-hour allowance for peak shaving for emergency engines at area sources be allowed for a limited period of time, but then removed after April 16, 2017. The peak shaving would also be limited to operation as part of a peak shaving (load management program) with the local distribution system operator. Owners would still have the pre-existing 50 hours per year allowance for non-emergency operation after April 16, 2017, but those 50 hours could no longer be used for peak shaving. The temporary allowance for peak shav ing would give sources time to address reliability issues and develop solutions to reliability issues while f acilities are coming into compliance with the National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units, which were promulgated on February 16, 2012 (77 FR 9304). ). This limited allowance would allow the owners and operators of these engine s more flexibility to run reliability critical units in order to minimize potential grid-related interruptions as coal- and oil-fired baseload power plants may be temporar ily shut down to install emission controls to comply with the NESHAP From Coal and Oi l-Fired Electric Utility Steam Generating Units.4-7 Including this allowance is important for small electric cooperatives and other entities located at area sources that use these engines to maintain voltage and electric reliability. Many rural electric cooperatives enter agreements with owners of small emergency engines and rely on the engines to reduce demand on the central power supply during periods of high , which reduces the cost of power during periods of high demand for the members of the cooperative. Commenters promoting the continued use of peak shaving programs said that maintaining the cost of power as low as possible is important acros s the country, but is particularly of significant importance to rural electric cooperatives that, according to the commenter, service customers in the most economically depressed areas of the co untry, where options are the most limited. The commenters argued that if small emergency engines would no longer be permitted to operate for peak shaving purposes without having to be reclassified as non-emergency engines and subsequently subject to costly emissions controls, owners could no longer af ford to participate in such programs. Cooperatives argued that this would lead to increased costs that would ultimately be passed along to the customers. Commenters also maintained that keeping peak shaving programs would not lead to additional public health risks or emissions because the operation for peak shaving is minimal. If peak shaving is not allowed under the rule, commenters said that this would lead to an increase in central power station capacity and possibly more transmission and distribution line capacity to accommodate the increase in demand resulting from eliminating small emergency engines from being used. This could lead to a larger impact on the environment and public health than allowing a small number of hours for peak shaving purposes. Certain small and remote facilities also rely on financial programs to generate ad ditional income in order to maintain their engines and st ay in operation. The additional f unds can be essential for many smaller facilities and operations. Providing a limited allowance for peak shaving and nonemergency demand response could generate sufficient income to prevent small facilities and owners from ceasing operation where these engines are in service. In order to further limit the operation of these engines to small, remote f acilities, the EPA is proposing that the power generated under this allowance can only be used at the facility or towards the local system. In addition, while the EPA is proposing this allo wance until the end of April 16, 2017, the EPA does not believe it is appropriate to continue the program beyond that time. Generators receive considerable compensation for their availability in peak shaving programs and the EPA believesthat it is not appropriate to allow these engines to continue receiving compensation for this nonemergency use beyond 2017 without having to redu ce their emissions. The generators must bythat time decide whether to restrict their use to emergency or limited non-compensated nonemergency use or to reduce the emissions from their engines. The EPA also encourages engine4-8 owners and operators, as well as larger system pl anners, to consider the use of alternative peak shaving options, such as load curtailments, lower emitting distributed generation, combined heat and power, and reduced line losses on the electricity grid. The previous estimate of emissions from stationary emergency engines is not expected to change due to this proposed limited allowance. To estimate emissions from stationary emergency engines, the EPA has previously estimated that emergency engines would on average operate for 50 hours per year. There is a wide range in how much these engines operate (some well below 50 hours per year), but on average and to be conservative, the EPA believes that 50 hours per year is still representative and consequently the environmental impact the EPA has calculated previously remains appropriate.In consideration of all these issues, the EPA is proposing amendments to the rule to prov ide a limited allowance for peak shaving for existing stationary emergency engines at area sources of HAP. Th e specific amendments the EPA is proposing are discussed below. 4.2.1.2. What are the Proposed Amendments? 4.2.1.2.1 Emergency Demand Response. The EPA is proposing to revise the current provisions for stationary engines used for emergency demand response operation. The provisions the EPA is proposing to amend are in §§63.6640(f) and 63.6675 of 40 CFR part 63, subpart ZZZZ. Currently, §63.6640(f)(1)(iii) allows a maximum of 15 hours per year to be spent towards demand response operation under certain qualifying conditions. Also, §63.6640(f)(1 )(ii) currently includes an allowance of 100 hours per year for purposes of maintenance checks and readiness testing. The EPA is proposing that owners and operators of stationary emergenc y RICE be permitted to operate their engines as part of an emergency demand response program within the 100 hours per year that is permitted for maintenance and testing in §63.6640(f)(1)(ii). Owners and operators of stationary emergency engines can operate for emergency demand response during periods in which the regional transmission authority or equivalent balancing au thority and transmission operator has declared an EEA Level 2 as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency and during periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. The hours spent for emergency demand response operation are added to the hours spent for maintenance and testing purposes and counted towards the 100 hours per year. If the total time spent for demand response operation and maintenance and testing exceeds 100 hours per year the engine will not be considered an emergency engine under this subpart and will need to meet all4-9 requirements for non-emergency engines. The EPA is recognizing that these engines may be called to operate not only by the regional transmission operator or equivalent to maintain the reliability of the bulk power system, but also by the local transmission and distribution system operators to support the local power systems. For stationary emergency engines above 500 HP that were installed prior to June 12, 2006, there is currently no emergency demand response allowance and there is no time limit on the use of emergency engines for routine testing and maintenance in §63.6640(f)(2)(ii). Those engines were not the focus of the 2010 RICE NESHAP amendments; therefore, the EPA did not make any changes to the requirements for those engines as part of the 2010 amendments. For consistency, the EPA is now also proposing that owners and operators of stationary emergency engines installed prior to June 12, 2006, be permitted to operate their engines as part of a demand response program as well for a total of 100 hours per year, including time spent for maintenance and testing. The EPA is also proposing to amend the NSPS for stationary CI and SI engines in 40 CFR part 60, subparts IIII and JJJJ, respectively, to provide the same allowance for stationary emergency engines for emergency demand response operation as for engines subject to the RICE NESHAP. The NSPS regulations currently do not include such an allowance for emergency demand response operation. For the reasons discussed as to why the EPA finds it appropriate to allow stationary emergency engines to participate in emergency demand response programs and remain being considered emergency units, and for consistency across engine regulations, the EPA is proposing to add an emergency demand response allowance under the NSPS regulations. Consequently, the EPA is proposing to revise the existing language in §§60.4211(f) and 60.4219 of 40 CFR part 60, subpart IIII, and §§60.4243(d) and 60.4248 of 40 CFR part 60, subpart JJJJ, to specify that emergency engines may participat e in demand response programs for up to 100 hours per year, including hours spent towards maintenance and testing of the emergency engines. 4.2.1.3 Peak Shaving and other Non-emergency Use as Part of a Financial Arrangement. In addition to the changes the EPA is prop osing related to emergency demand response operation, the EPA is also including a further provision for owners and operators of existing stationary emergency RICE located at area sources. Paragraph §63.6640(f) currently allows owners and operators of emergency stationary RICE to operate their engine for 50 hours per year in non-emergency situations. As currently wr itten, the 50 hours per year for non-emergency situations cannot be used for peak shaving or to generate income for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity;4-10 except that owners and operators of certain emergency engines may operate the engine for a maximum of 15 hours per year as part of an emergency demand response program. As discussed, the 15 hours per year allowance for emergency engines to participate in emergency demand response programs is being increased to 100 hours per year, but will also include hours spent towards maintaining and conducting readiness testing of the emergency engines. However, additionally, the EPA is also proposing that stationary emergency engines located at area sources be permitted to apply the 50 hours per year that is currently allowed under §63.6640(f) for nonemergency operation towards any non-emergency operation, including operation as part of a financial agreement with another entity. The peak shaving allowance would expire in 2017. The EPA is specifying that the power can only be used at the facility or towards the local system, and the engine can only be operated for peak shaving as part of a program with the local distribution system operator. The EPA is also clarifying th at an engine that exceeds the calendar year limitations on non-emergency operation, including emergency demand response or peak shaving, will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. 4.2.1.4. Proposed Amendment - Stationary Agricultural RICE in San Joaquin ValleyIn the 2010 amendments to the RICE NESHAP, the EPA required existing nonemergency CI engines above 300 HP to meet a standard of either 70 percent reduction of CO emissions or 49 ppmvd CO, for engines between 300 and 500 HP, or 23 ppmvd CO for engines above 500 HP. The requirements also included te sting and monitoring provisions. As with all requirements for existing engines in that rule, owners and operators were required to meet the requirements within 3 years of the effective date of the regulations (May 3, 2013). Since the finalization of the rule for existing stationary CI engines, stakeholders from the agricultural industry in the San Joaquin Valley area of California have expressed concern regarding the effect of certain of these requirements on engines in the San Joaquin Valley. The San Joaquin Valley Air Pollution Control Distri ct (APCD) has indicated that there are 17 stationary CI engines at area sources in San Joaqui n Valley certified to the Tier 3 standards in 40 CFR part 89 that were installed between January 1 and June 12, 2006. Under the NESHAP, stationary CI engines at area sources are existi ng if construction of the engine commenced prior to June 12, 2006. These 17 Tier 3 engines in the San Joaquin Valley, which were built to meet stringent emission standards, would not be able to comply with the ap plicable RICE NESHAP emission standards for existing engines without further testing and monitoring, and possible retrofit with further controls, due to differences in the emission standards and testing protocols in the RICE NESHAP versus the Tier 3 standards in 40 CFR part 89. However, an identical engine4-11 certified to the Tier 3 standards (or Tier 2 standards for engines above 560 kilowatts (kW)) in 40 CFR part 89 that was installed after June 12, 2006, would not have to be retrofit in order to comply with the NESHAP. Stationary CI engines installed after June 12, 2006, at area sources of HAP are required to comply with the NSPS for st ationary CI engines, which requires engines to be certified to the standards in 40 CFR parts 89, 94, 1039, and 1042, as applicable. Thus, a 2006 model year stationary CI engine installed after June 12, 2006, that is certified to the applicable standards would meet the requirements of the NESHAP without further controls or testing. While the EPA does not know if other certified Tier 3 engines besides these 17 engines in the San Joaquin Valley were installed prior to June 12, 2006, EPA believes the same rationale should apply to any such engine. The EPA believes that the Tier 3 standards (Tier 2 for engines above 560 kW) are technologically stringent regulations and believe s it is unnecessary to require further regulation of engines meeting these standards. In order to address this concern, the EPA is proposing changes to amend the requirements for any certified Tier 3 (Tier 2 for engines above 560 kW) stationary CI engine located at an area source and installed before June 12, 2006. The EPA is proposing amendments to specify that any existing certified Tier 3 (Tier 2 for engines above 560 kW) CI engine that was installed before June 12, 2006, is in compliance with the NESHAP. This amendment would include any existing stationary Tier 3 (Tier 2 for engines above 560 kW) certified CI engine located at an area source of HAP emissions. Another concern brought to the EPA’s attention by the San Joaquin Valley agricultural industry is that due to state and local requirements in the San Joaquin Valley, many of the Tier 1 and Tier 2 stationary CI engines that are regul ated as existing sources under the NESHAP must be replaced in the next few years, only a short time after the emission standards for existing engines must be met. Specifically, the San Joaquin Valley APCD rule for internal combustion engines (Rule 4702) requires Tier 1 and Tier 2 certified engines to meet Tier 4 standards by January 1, 2015, or 12 years after the installation date, but no later than June 1, 2018. The concern is that owners and operators of these e ngines would have to install aftertreatment by 2013 to meet the emission standards of the RICE NESHAP and then only a few years later be required to replace their engines per San Joaquin Valley APCD Rule 4702. The San Joaquin Valley APCD has identified 49 Tier 1 engines and 360 Tier 2 engines that are scheduled to be replaced under the local rule. The EPA has not identified any engines outside the San Joaquin Valley APCD area that are in the same or simila r situation (i.e., required to be replaced shortly after the compliance date for existing engines), bu t the EPA does not preclude the possibility that4-12 there are such engines in other areas, and requests comment and information on other areas that may have similar concerns. The EPA does not think it is appropriate to re quire emission controls on a stationary CI engine that is going to be retired only a short time after the rule goes into effect. Stationary CI engines would have to comply with this rule by May 3, 2013, and owners of engines above 300 HP are expected to have to install aftertreatment on their engines in order to meet the emission standards. The EPA estimates that the one-time cost to equip a 500 HP stationary CI engine with the controls necessary to meet the emission standards under this rule is close to $14,000 and more than $3,000 on a yearly basis, not accounting for additional costs associated with monitoring, testing, reco rdkeeping and reporting. These engines (equipped with aftertreatment) could end up being in operation for less than 2 years or at most only 5 years before having to be replaced with a certified Tier 4 engine, as required by San Joaquin Valley District Rule 4702. It would not be reasonable to require the engine owne r to invest in costly controls and monitoring equipment for an engine that will be replaced shortly after the installation of the controls. Consequently, the EPA is proposing amendments to existing stationary CI engines located at area sources of HAP emissions to a ddress this concern. The EPA is proposing to amend the requirements for existing stationary Ti er 1 and Tier 2 certified CI engines located at area sources that are greater than 300 HP that are s ubject to a state or local rule that requires the engine to be replaced. The EPA is proposing to allow these engines to meet management practices for a period of 2 years starting with the applicable May 3, 2013, compliance date. The EPA believes a period of 2 years is appropriate and provides owners enough time to replace their engines without mandating a possibl y cost prohibitive requirement to change all of the engines in a short amount of time, while still requiring that replacement of the engine or a retrofit of the engine occur relatively quickly after the owner would have to comply with the NESHAP. The EPA is proposing that these engines be subject to management practices until May 3, 2015, after which time the CO emission standards discussed above (and that are in Table 2d of the rule) apply. The management practices include requirements for when to inspect and replace the engine oil and filter, air cleaner, hoses and belts. The complete details of which management practices are required are shown in Table 2d of the rule. Owners and operators of these existing stationary CI engines located at area sources of HAP emissions that intend to meet management practices rather than the emission limits prior to May 3, 2015, must submit a notification by March 3, 2013, stating that they intend to use this provision and identifying the state or local regulation that the engine is subject to. 4.2.1.5 Proposed Amendments – for Remote Areas of Alaska4-13 4.2.1.5.1 Background for Proposed AmendmentsThe RICE NESHAP currently specifies less stringent requirements for existing nonemergency CI engines at area sources located in remote areas of Alaska. Remote areas are defined as those not accessible by the FAHS. The FAHS includes areas with year-round ferryservice that are not on the contiguous road system. Under the current regulation, stationary nonemergency CI engines at area sources in areas of Alaska that are not accessible by the FAHS are subject to management practices as oppos ed to numerical emission standards. Following the publication of the final rule in 2010, the EPA received requests to expand the definition of remote areas of Alaska. Stakeholde rs asserted that facilities in areas that are accessible by the FAHS but are not connected to the Alaska Railbelt grid face the same challenges as those in areas not accessible by the FAHS. The Alaska Railbelt Grid refers to the service areas of the six regulated public utilities that extend from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are the Golden Valley Electric Association, Chugach Electric Association, Matanuska Electric Association, Ho mer Electric Association, Anchorage Municipal Light & Power, and the City of Seward Electric System. According to the stakeholders, one reason for broadening the definition of remote areas in Alaska is high energy costs, which provide a natural incentive to run CI engines as little as possible. The cost of energy is utilities’ greatest concern in Alaska. Also, the stakeholders indicated that extreme weather conditions in certain areas of Alaska is another reason for includi ng additional areas in the definition of remote areas of Alaska. The climate issue is unique to remote areas of Alaska that experience some of the most extreme temperatures in the country. Heavy snowfall and high winds are not uncommon in several areas that are accessible by the FAHS. For instance, Copper Valley Electric Association (CVEA) is a utility accessible by the FAHS, but it includes areas that face the same challenges as other communities not acce ssible by the FAHS. The utility operates on an isolated grid and relies on diesel power generation. In one of CVEA’s territories, Valdez, Alaska, CVEA indicated that this area experiences brutal conditions and stated that Valdez is considered to have the greatest snowfall (326 inches per winte r) in any city of the United States. Also, winds at more than 100 miles per hour are not uncommon for Valdez, Alaska, according to CVEA. Temperatures between 40 and 50 below zero are also not abnormal, which emphasizes the extreme reliance on power, CVEA asserted. Travel times and accessibility are issues on a regular basis, but can be additionally exacerbated due to severe weather, which in some cases may lead to avalanches and road closings. In particular, even if a site is on the FAHS, in the event of poor weather conditions and road closings, there are in many cases no alternate roads to travel on. Further, access to specific isolated sites can also be problematic in particular remote areas of4-14 Alaska and the problems are unique to Alaska because of the infrastructure and environment. For example, communities made the case that sources along the AMHS that are only accessible by the AMHS should be treated the same way as communities not accessible by the FAHS. The AMHS primarily serves passengers and vehicles, and is not intended for transporting goods. Therefore, the same methods used to bring in goods to communities not on the FAHS are the same as those Alaskan villages served only by the AMHS. Goods are typically brought in to remote communities by barge and this is another ex ample of a scenario that is unique to Alaska. Other arguments for expanding the definition of remote areas of Alaska beyond those not accessible by the FAHS include very low population density in many other remote areas although accessible by the FAHS, and the fact that many of these areas are not connected to the electric grid and rely on back up diesel genera tion to support fluctuating renewable energy systems. The energy supply system is another ar ea that is particularly different in Alaska compared to the rest of the country whose majority of customers are connected to the grid.Lastly, if sources were to comply with requirements under the RICE NESHAP necessitating addon controls and associated monitoring, testing, and administrative requirements, compliance costs would be high and funds needed for sustai nable renewable energy goals would be diverted. Therefore, for the reasons discussed, the EPA is proposing expansion of the remote area source category. This proposal is supported by the Al aska Department of Environmental Conservation and communities with whom the EPA has discussed this issue. 4.2.1.5.2 What are the Proposed Amendments? The EPA is proposing to expand the current definition of remote areas of Alaska to extend beyond areas that are not accessible by the FAHS. Specifically, the EPA is proposing that areas of Alaska that are accessible by the FAHS and that meet all of the following criteria are also considered remote and subject to management practices under the rule: •The stationary CI engine is located in an area not connected to the Alaska Railbelt Grid, •At least 10 percent of the power generated by the engine per year is used for residential purposes, and •The system capacity is less than 12 megawatts, or the engine is used exclusively for backup power for renewable energy and is used less than 500 hours per year on a 10-year rolling average. The EPA is proposing limiting the remote classifica tion to engines that are used at least partially for residential purposes, where the impact of higher energy costs is of greatest concern. The4-15 classification is further limited to sources that are used infrequently as backup for renewable power, or that are at smaller cap acity facilities, which are generally in more sparsely populated

areas. 4.2.1.6 Compliance Date The EPA has received some questions regarding whether the compliance dates for engines impacted by the 2010 amendments and th is proposed reconsideration will be extended. Affected sources that may be impacted by this action have expressed concern about having sufficient time to comply with the rule by the compliance date, which is May 3, 2013, for existing stationary CI RICE and October 19, 2013, for existing stationary SI RICE. Sources impacted by this reconsideration are particularly concerned with compliance in the event that the EPA does not finalize changes that are substantially similar to the changes being proposed in this action. The EPA does not intend to extend the May 3, 2013, and October 19, 2013, compliance dates, because there are many engines that must meet those compliance dates that are not impacted by this reconsideration. However, we note that sources that are affected by the reconsideration and that may need additional ti me to install controls to comply with the applicable requirements can request up to an additional year to install controls, as specified in 40 CFR 63.6(i).

4.2.2 What Are the Pollutants Regulated by this Proposed Reconsideration Rule? The proposed reconsideration rule regulates emissions of HAP. Available emissions data show that several HAP, which are formed during the combustion process or which are contained within the fuel burned, are emitted from stationary engines. The HAP which have been measured in emission tests conducted on diesel fired RICE include: 1,3-butadiene, acetaldehyde, acrolein, benzene, ethylbenzene, formaldehyde, n-hexane, naphthalene, polycyclic aromatic hydrocarbons, polycyclic organic matter, styrene, toluene, and xylene. Metallic HAP from diesel fired stationary RICE that have been measured are: cadmium, chromium, lead, manganese, mercury, nickel, and selenium. EPA described the health effects of these HAP and other HAP emitted from the operation of stationary RICE in the preamble to 40 CFR part 63, subpart ZZZZ, published on June 15, 2004 (69 FR 33474). These HAP emissions are known to cause, or contribute significantly to air pollution, which may reasonably be anticipated to endanger public health or welfare. More4-16 details on the health effects of these HAP and other HAP emitted from oper ation of stationary RICE can be found in Section 7 of this RIA. The proposed amendments will continue to limit emissions of HAP through emissions standards for CO for existing stationary CI RICE in similar quantities as estimated for the 2010 final rule. Carbon monoxide has been shown to be an appropriate surrogate for HAP emissions from CI engines. For the NESHAP promulgated in 2004, EPA found that there is a relationship between CO emissions reductions and HAP emissi ons reductions from CI stationary engines. Therefore, because testing for CO emissions has many advantages over testing for HAP emissions, CO emissions were chosen as a surrogate for HAP emissions reductions for CI stationary engines. For the standards included in this action, EPA believes that previous decisions regarding the appropriateness of using CO in concentration (ppm) levels as has been done for stationary sources before as surrogates for HAP are still valid. 1 Therefore, the EPA is retaining the emission standards for CO for CI engines in order to regulate HAP emissions. In addition to reducing HAP and CO, the proposed amendments will result in the reduction of PM emissions from existing dies el engines. The aftertreatment technologies expected to be used to reduce HAP and CO emissions also reduce emissions of PM from dieselengines. Also, the proposed rule requires the use of ULSD for diesel-fueled stationary nonemergency CI engines greater than 300 hp with a displacement of less than 30 liters per cylinder. This will result in lower emissions of sulfur oxides (SO x ) and sulfate particulate from these engines by reducing the sulfur content in the fuel.

4.3 Cost Impacts 4.3.1 Introduction The cost impacts associated with this rule consist of different types of costs, which include the annual and capital costs of controls, costs associated with keeping records of information necessary to demonstrate compliance, costs associated with reporting requirements under the General Provisions of 40 CFR part 63, subpart A, costs of purchasing and operating equipment associated with continuous parame tric monitoring, and the cost of conducting performance testing to demonstrate compliance w ith the emission standards. The capital and

1 In contrast, mobile source emission standards for diesel engines (both nonroad and on-highway) are promulgated on a mass basis rather than concentration.4-17 annual costs presented in this section are calculated based on the control cost methodology presented in the EPA (2002) Air Pollution Control Cost Manual prepared by the U.S. Environmental Protection Agency. 2 This methodology sets out a procedure by which capital and annualized costs are defined and estimated, and this procedure is often used to estimate the costs of rulemakings such as this one. The capital costs presented in this section are annualized using a 7% interest rate, a rate that is consistent with the guidance provided in the Office of Management and Budget’s (OMB’s) (2003) Circular A-4. 3 The following sections describe how the various cost elements were estimated. Note that the methodologies and procedures presented in the following sections are the same as those used for the 2010 final rule. 4.3.1.1 Control Costs For engines that will need to add control t echnology to meet the emission standards, the following equations were used to estimate capital and annual cont rol costs as shown in Table 4- 3:

Table 4-1 : CI RICE Control Technologies and Costs Technology Capital Cost ($2008) Annual Cost ($2008) Diesel oxidation catalyst (DOC) $27.4 x hp

− $939 $4.99 x hp + $480 Open crankcase ventilation (OCV) $0.26 x hp + $997 $0.065 x hp + $254 The control costs for DOC were calculated using cost data obtained from a California Air Resources Board (CARB) study. 4 The study provided cost ranges for diesel engines ranging from 40 hp to 1400 hp. The average cost from the range was selected and was adjusted to 2008 dollars. The capital and annual cost were calculated using maintenance data from the CARB study and cost assumptions from the EPA Air Pollution Control Cost Manual. The control costs for the OCV system were calculated using 2008 cost data obtained from a diesel engine equipment vendor. An equipment life of 10 years was used to calculate the capital recovery factor (CRF) for developing the annual cost for each of the control devices. A linear regression equation was developed for the capital cost of the DOC and OCV using the capital cost data and the engine size in hp. This approach was used to develop a linear regression equation for annual cost.

2 Available on the Internet at http://epa.gov/ttn/catc/products.html#cccinfo

. 3 Available on the Internet at http://www.whitehouse.gov/o mb/circulars/a004/a-4.pdf

. 4 Diesel PM Control Technologies, Appendix IX, California Air Resource Board, October 2000. http://www.arb.ca.gov/diesel/documents/rrpapp9.pdf4-18 4.3.1.2 Recordkeeping Minimal recordkeeping costs were attributed to the requirement of following the manufacturer’s emission-related operation and maintenance (O&M) requirements or the owner or operator’s own maintenance plan. It is expected that the majority of owners and operators are already following some type of O&M requiremen ts and a small additional burden is expected. The EPA expects that at most 1 hour will be necessary per year in order to keep track of maintenance. Owners and operator of stationary emergency engines are required to keep track of the hours of operation and 1 hour per year was estimated to cover that recordkeeping activity. For emergency engines 1 hour is expected to cover tracking hours of operation plus recording maintenance activities. No cost is attributed to purchasing and installing an hour-meter since the majority of stationary engines already come equipped with such equipment. Labor costs associated with recording the hours of operati on of emergency engines are based on a technical labor rate of $68 per hour which was obtained from the Department of Labor Statistics web site. 5 The final total wage rate was based on the 2005 compensation rates for professional staff and adjusted by an overhead and profit rate of 167 percent. The year 2005 was used for consistency in order to have the same basis for all costs. All costs were later converted to 2008 dollars for purposes of presenting costs associated with the rule in present day terms. 4.3.1.3 Reporting Most engines affected by this rule will be subject to reporting requirements such as reading instructions, training personnel, subm itting an initial notification, submitting a notification of performance test(s), and submitting a compliance report. However, owners and operators of engines less than 100 HP, existing stationary emergency engines, and existing stationary engines less than 300 HP located at area sources are not subject to any specific reporting requirements. For stationary non-emergency limited use CI engines that operate less than 100 hours per year, EPA is finalizing less burdensome reporting requirements by requiring these engines to submit compliance reports on an annual basis, as opposed to semiannually as is required for other engines subject to numerical emission limitations. The reporting requirements are based on $68 per hour for technical labor to comply with the reporting requirements. It is estimated that a total of 14 hours will be needed, and 13 hours for limited use engines. 4.3.1.4 Monitoring The cost of monitoring includes the purchase of a continuous parametric monitoring system (CPMS). Non-emergency engines greater than 500 hp that have add-on controls are

5 U.S. Department of Labor, Employer Costs for Employee Compensation, http://www.bls.gov/news.release/ecec.toc.htm4-19 required to use a CPMS to monitor the catalyst inlet temperature and pressure drop across the catalyst to ensure those parameters do not exceed the operating limitations. The cost of purchasing and operating a CPMS was obtained from vendor quotes received for previous rulemaking and adjusted to 2008 dollars. 6 The capital cost of a CPMS for a large engine facility is $531. It is estimated that 30 hours per year is necessary to operate and maintain the CPMS and that 6 hours per year (or 0.5 hours per month) is needed to record information from the CPMS. It is assumed that all engines subject to continuous monitoring would be located at large engine facilities. 4.3.1.5 Performance Testing Initial performance testing is required for non-emergency engines greater than 100 hp at major sources and non-emergency engines greater than 300 hp located at area sources. The cost of conducting a performance test on a CI engine is based on cost information gathered for previous rulemakings. 7 The performance testing cost is based the use of a portable analyzer and was estimated to cost $1,000 per day of testing. This daily performance test cost was adjusted to 2008 dollars and was estimated to be $1,165. Because the regulation requires three-1 hour runs, EPA assumed that two engines could be tested at each facility in one day. Therefore, the estimated impacts performance testing cost will be assumed to be $583 per engine (or half of the $1,165 daily cost) using a portable analyzer. 4.3.1.6 Work Practices The costs for performing work practices for CI engines less than 100 hp located at a major source was assumed to be negligible and were not included in these impact calculations. The work practices are based on engine maintenance procedures that the owner/operators perform regardless of the regulation. These work practices include:

 Changing the oil and filter;

 Inspecting the air cleaner and replacing as necessary; and

 Inspecting all hoses and belts, and replacing as necessary. EPA believes that these work practices will limit HAP emissions from these engines, because these work practices ensure that the engi ne is operating efficiently. Owner/operators of these engines regularly perform these work practices as part of the preventive maintenance

6 Part A of the Supporting Statement for Standard Form 83 Stationary Reciprocating Internal Combustion Engines, November 17, 2003. 7 Memorandum from Bradley Nelson, Alpha-Gamma Technologies, Inc. to Sims Roy, EPA/OAQPS/ESD/Combustion Group, Portable Emissions Analyzer Cost Information, August 31, 2005.4-20 schedule for the engine. Therefore, EPA believes th at it is appropriate to not include these work practice costs in the impacts determination. 4.3.1.7 Management Practices The costs for performing management practices for non-emergency CI engines less than or equal to 300 hp located at area sources and all emergency engines located at area sources was assumed to be negligible and were not included in these impact calculations. The management practices are based on engine maintenance pr ocedures that the owner/operators perform regardless of the regulation. These management practices include:

 Changing the oil and filter;

 Inspecting the air cleaner, and replacing as necessary; and

 Inspecting all hoses and belts, and replacing as necessary. EPA believes that these work practices will limit HAP emissions from these engines, because these work practices ensure that the engi ne is operating efficiently. Owner/operators of these engines regularly perform these work practices as part of the preventive maintenance schedule for the engine. Therefore, EPA believes th at it is appropriate to not include these work practice costs in the impacts determination. 4.3.2 Major Sources The cost impacts for stationary RICE vary depending on the engine type and size. The following sections describe th e specific costs that apply to each subcategory of CI engines located at major sources. 4.3.2.1 All CI Engines hp < 100 The costs associated with CI engines less than 100 hp include minimal requirements. Owners and operators of engines less than 100 hp are required to follow the manufacturer’s emission-related O&M requirements or must develop their own maintenance plan to follow. Emergency engines must record the hours of operat ion, which is estimated at one hour per year at $72 per hour. 4.3.2.2 Non-emergency CI Engines 100 ≤ hp ≤ 300 hp The costs associated with nonemergency CI engines greater than or equal to 100 hp and less than or equal to 300 hp include the cost of an initial test, recordkeeping, and reporting. In addition, EPA assumes that some of these engines will be required to install a control device to4-21 meet the emissions standard. To estimate the numb er of CI engines that would be required to install control technology, EPA compared the emission rate of the test that was used to determine the MACT floor with the CI nonroad emission factors. 8 EPA found that only the emission factors for Tier 0 CI engines were greater than the 1.2 g/hp-hr value that was used to set the MACT floor. Therefore, it was assumed that Tier 1 engines and greater would be able to meet the final emission standard. The model year for Tier 1 engines begins in 1997 for 100 to 175 CI engines, and 1996 for 175 to 300 hp CI engines. Using the model year data in the population memorandum, EPA estimated that 35 percent of the existing CI engines greater than or equal to 100 hp and less than or equal to 300 hp are Tier 0 engines and would need to install control technology to meet the emission standard. The co st estimates for this subcategory of engines do not account for possible fuel price increases that may result from using ultra-low sulfur diesel (ULSD). EPA estimated the cost of lubricity additives to ULSD would increase the cost of the fuel by 0.2 cents per gallon, 9 which EPA believes is negligib le. In addition, there are no additional maintenance requirements for owner/oper ators using ULSD in existing diesel engines. Many owner/operators have found that time between oil changes can be extended for engines using ULSD fuel, which would decrease the overall cost of switching to ULSD fuel. Therefore, EPA believes that it is appropriate to not includ e any costs for switching to ULSD in the impacts for this NESHAP. 4.3.2.3 Nonemergency CI Engines > 300 hp The costs associated with non-emergency CI engines above 300 hp include the cost of installing and operating an oxidation catalyst for re ducing HAP, as well as the cost of installing an open crankcase ventilation system. Non-emer gency CI engines greater than 500 hp are also subject to continuous monitoring requirements. In addition, owners and operators must conduct an initial performance test to demonstrate complia nce with the emission limitation. Owners and operators of engines above 500 hp must conduct subsequent performance testing every 8,760 hours or 3 years, whichever comes first to demonstrate compliance. The cost estimates for this subcategory of engines do not account for possible fuel price increases that may result from using ULSD. EPA estimated the cost of lubricity additives to ULSD would increase the cost of the fuel by 0.2 cents per gallon, 10 which EPA believes is negligib le. In addition, there are no

8 Exhaust and Crankcase Emission Factors for Nonroad Engi ne Modeling--Compression-Ignition, U.S. EPA, Office of Transportation and Air Quality, Assessment and Stan dards Division, EPA420-P-04-009, Revised April 2004. http://www.epa.gov/oms/models/nonrdmdl/nonrdmdl2004/420p04009.pdf 9 Memorandum from Melanie Taylor and Brad Nelson, AGTI to Sims Roy, EPA OAQPS ESD Combustion Group, Lubricity of Ultra Low Sulfur Diesel Fuel, June 2, 2004. 10 Memorandum from Melanie Taylor and Brad Nelson, AGTI to Sims Roy, EPA OAQPS ESD Combustion Group, Lubricity of Ultra Low Sulfur Diesel Fuel, June 2, 2004.4-22 additional maintenance requirements for owner/oper ators using ULSD in existing diesel engines. Many owner/operators have found that time between oil changes can be extended for engines using ULSD fuel, which would decrease the overall cost of switching to ULSD fuel. Therefore, EPA believes that it is appropriate to not includ e any costs for switching to ULSD in the impacts for this NESHAP. 4.3.2.4 Emergency CI Engines The costs associated with emergency CI engines greater than 300 hp and less than or equal to 500 hp (emergency CI engines above 500 hp were subject to an earlier rule and are not subject to further regulation in this rule) include minimal recordkeeping requirements. The owners and operators must follow the manufacturer’s emission-related operating and maintenance (O&M) requirements or must develop their own maintenance plan to follow and must also keep records of the hours of operation. It is estimated that one hour per year at $68 per hour would be sufficient to record the hours of operation. No costs were included in the impacts for following the manufacturer’s emission-relat ed O&M plan, because it is expected that owner/operators will follow this plan regardless of the regulation. 4.3.3 Area Sources 4.3.3.1 All Emergency CI Engines The costs associated with emergency CI engines include recordkeeping requirements for tracking the hours of operation, but these engines are not subject to any performance testing. The owners and operators must follow the manufacturer’s emission-related O&M requirements or must develop their own maintenance plan to follow . It is estimated that one hour per year at $68 per hour would be sufficient to record the hours of operation. Emergency CI engines at areas sources will be subject to management practi ces, rather numerical emission limits. The management practices do not require aftertreatment controls. Therefore, no control costs have been estimated for these engines. These engines will be subject to management practices which are not included in the costs, because it is assumed that these management practices are performed regardless of the regulation. 4.3.3.2 Non-emergency CI Engines ≤ 300 hp The costs associated with nonemergency CI engines less than or equal to 300 hp are minimal and only include following the manufacturer’s emission-related O&M requirements or the owner or operator’s own maintenance plan. These engines are not subject to any numerical emission limitations, therefore no control costs apply and no performance testing is required.4-23 These engines will be subject to management practices which are not included in the costs, because it is assumed that these management practices are done regardless of the regulation. 4.3.3.3 Non-emergency CI Engines > 300 hp The costs associated with nonemergency CI engines above 300 hp include the cost of installing and operating an oxidation catalyst for re ducing HAP, as well as the cost of installing an open crankcase ventilation system. Nonemergency CI engines greater than 500 hp are also subject to continuous monitoring requirements. In addition, owners and operators must conduct an initial performance test to demonstrate compliance with the emission limitation and engines above 500 hp must conduct subsequent performance testing every 8,760 hours or 3 years, whichever comes first. The cost estimates for this subcategory of engines do not account for possible fuel price increases that may result from using ULSD. The cost estimates for this subcategory of engines do not account for possible fuel price increases that may result from using ULSD. EPA estimated the cost of lubricity additives to ULSD would increase the cost of the fuel by 0.2 cents per gallon, which EPA be lieves is negligible. In addition, there are no additional maintenance requirements for owner/oper ators using ULSD in existing diesel engines. Many owner/operators have found that time between oil changes can be extended for engines using ULSD fuel, which would decrease the overall cost of switching to ULSD fuel. Therefore, EPA believes that it is appropriate to not includ e any costs for switching to ULSD in the impacts for this NESHAP. A summary of the total costs associated with the rule by major source and area source categories is found in Table 4-2. A summary of the costs by NAICS codes is found in Table 4-3. Table 4-4 provides a summary of costs by engine size, and a presentation of the number of engines by engine size is in Table 4-5. All cost estimates are from “RICE NESHAP Reconsideration Amendment – Cost and Environmental Impacts RICE,” prepared by Tanya Parise, EC/R, Inc. for Melanie King, U.S. EPA, Office of Air Quality Planning and Standards.

### 4-24Table 4-2. Summary of Major Source and Area Source Costs for the CI RICE NESHAPaSizeRange(hp)Non-EmergencyCI CapitalControl CostNon-EmergencyCI AnnualControl Cost Initial Test Recordkeeping ReportingMonitoring –Capital CostMonitoring –Annual CostTotal AnnualCostsTotal CapitalCostsMajor Sources50–100 $0 $0 $0 $6,654,888 $0 $0 $0 $6,654,888 $0100–175 $24,057,778 $9,918,465 $14,150,269 $8,719,731 $5,973, 016 $0 $0 $38,761,480 $24,057,778175–300 $35,917,270 $10,740,189 $10,730,759 $6,612,548 $4,529,595 $0 $0 $32,613,092 $35,917,270300–500 $107,841,136 $26,722,727 $5,645,923 $3,479,152 $2,383,219 $0 $0 $38,231,021 $107,841,136500–600 $13,126,952 $3,020,849 $500,530 $61,688 $211,280 $481,765 $2,220,755 $6,015,102 $13,608,716600–750 $8,240,540 $1,824,295 $256,204 $31,576 $108,147 $246,599 $1,136,729 $3,356,951 $8,487,139>750 $26,903,091 $5,618,803 $565,163 $69,653 $238,563 $543,975 $2,507,521 $8,999,703 $27,447,066Total $216,086,768 $57,845,329 $31,848,848 $25,629,236 $13,443,820 $1,272,338 $5,865,005 $134,632,238 $217,359,106Area Sources50–100 $0 $0 $0 $9,183,746 $0 $0 $0 $9,183,746 $0100–175 $0 $0 $0 $12,033,196 5,231,824 $0 $0 $17,265,000 $0175–300 $0 $0 $0 $9,125,316 $3,967,529 $0 $0 $13,092,845 $0300–600 269, 176, 789 $64,764,947 $12,533,931 $7,180,954$5,290,738 $4,021,343 $18,536,893 $108,307,463$273,198,131600–750 67,576,980 $14,964,227 $2,101,015 $1,203,716$886,866 $674,082 $9,321,806 $28,473,630,$68,251,062,>750 177,179,667 $37,004,585 $3,722,077 $2,132,457$1,571,138 $1,194,178 $16,514,152 $60,944,409$178,373,845Total 513,933,435 $116,729,759 $18,357,024 $40,859,384$16,948, 096 $5,889,603 $44,372,851 $237,267,114$519,823,039Grand TotalTotal $730,020,203 $174,575,088 $50,205,872 $66,480,620 $30,391,916 $7,161,941 $50,237,856 $371,899,352 $737,182,145aCosts are presented in 2008 dollars.

### 4-25Table 4-3. Summary of Major Source and AreaSource NAICS Costs for the CI RICE NESHAPaNAICSMajor Source Area Source Total (Major + Area)Capital Cost Annual Cost Capital CostAnnual Cost Capital Cost Annual CostElectric Power Generation(2211)$161,766,376 $90,982,105 $464,947,798 $202,463,116 $626,714,174 $293,445,222Hospitals (622110)$20,220,797 $11,372,763$0$0 $20,220,797 $11,372,763Crude Petroleum & NGProduction (211111)$2,374,401 $3,807,478 $1,590,115 $2,597,836 $3,964,516 $6,405,314Natural Gas Liquid Producers(211112)$2,374,401 $3,807,478 $1,590,115 $2,597,836 $3,964,516 $6,405,314National Security (92811) $20,220,797 $11,372,763 $51,660,866 $22,495,902 $71,881,663 $33,868,665Hydro Power Units (335312)$0$16,637$0$22,959$0$39,597Irrigation Sets (335312) $10,294,073 $11,791,567$34,145 $5,208,084 $10,328218 $16,999,651Welders (333992)$108,260 $1,481,447$0 $1,881,380 $108,260 $3,362,827Total $217,359,106$134,632,238$519,823,039$237,267,114$737,182,145$371,899,352aCosts are presented in 2008 dollars.

### 4-26Table 4-4. Summary of Major Source and Area SourceNAICS Costs for the CI RICE NESHAP – by SizeaNAICSMajor Source Area Source Total (Major + Area)Capital Cost Annual Cost Capital CostAnnual Cost Capital Cost Annual CostElectric Power Generation (2211)50–100 hp$0 $3,396,123$0 $5,272,480$0 $8,668,603100–175 hp$13,406,919 $21,600,998 $0 $10,824,132 $13,406,919 $32,425,129175–300 hp$23,012,914 $20,895,861$0 $9,437,454 $23,012,914 $30,333,314300–600 hp$96,907,266 $35,304,866 $245,239,035 $97,223,277 $342,146,301 $132,528,144600–750 hp$6,789,032 $2,685,292 $61,419,814 $25,623,705 $68,208,846 $28,308,997>750 hp$21,650,245 $7,098,966 $158,288,950 $54,082,069 $179,939,195 $61,181,035Total 2211$161,766,376 $90,982,105 $464,947,798 $202,463,116 $626,717,174 $293,445,222Hospitals (622110)50–100hp$0 $424,515 $0 $0 $0 $424,515100–175 hp$1,675,865 $2,700,125$0$0 $1,675,865 $2,700,125175–300 hp$2,876,614 $2,611,983$0$0 $2,876,614 $2,611,983300–600 hp$12,113,408 $4,413,108$0$0 $12,113,408 $4,413,108600–750 hp$848,629 $335,662$0$0 $848,629 $335,662>750 hp$2,706,281 $887,371$0$0 $2,706,281 $887,371Total 622110$20,220,797 $11,372,763$0$0 $20,220,797 $11,372,763Crude Petroleum & NG Production (211111)50–100 hp$0 $420,256$0 $579,954$0 $1,000,210100–175 hp$2,026,868 $3,265,655 $0 $1,454,578 $2,026,868 $4,720,233175–300 hp$3,592$3,261$0$1,309$3,592$4,571300–600 hp$151,812 $55,308 $341,498 $135,384 $493,310 $190,692600–750hp$0 $0 $0 0 $0 $0>750 hp$192,129 $62,998 $1,248,617 $426,611 $1,440,746 $489,609Total 211111$2,374,401 $3,807,478 $1,590,115 $2,597,836 $3,964,516 $6,405,314(continued)

### 4-27Table 4-4. Summary of Major Source and Area SourceNAICS Costs for the CI RICE NESHAP – by Sizea(continued)NAICSMajor Source Area Source Total (Major + Area)Capital Cost Annual Cost Capital CostAnnual Cost Capital Cost Annual CostNatural Gas Liquid Producers (211112)50–100 hp$0 $420,256$0 $579,954$0 $1,000,210100–175 hp$2,026,868 $3,265,655 $0 $1,454,578 $2,026,868 $4,720,233175–300 hp$3,592$3,261$0$1,309$3,592$4,571300–600 hp$151,812 $55,308 $341,498 $135,384 $493,310 $190,692600–750hp0 0 0 0 $0 $0>750 hp$192,129 $62,998 $1,248,617 $426,611 $1,440,746 $489,609Total 211112$2,374,401 $3,807,478 $1,590,115 $2,597,836 $3,964,516 $6,405,314National Security (92811)50–100 hp$0 $424,515$0 $585,831$0 $1,010,346100–175 hp$1,675,865 $2,700,125 $0 $1,202,681 $1,675,865 $3,902,806175–300 hp$2,876,614 $2,611,983 $0 $1,048,606 $2,876,614 $3,660,589300–600 hp$12,113,408 $4,413,108 $27,248,782 $10,802,586 $39,362,190 $15,215,695600–750 hp$848,629 $335,662 $6,824,424 $2,847,078 $7,673,053 $3,182,740>750 hp$2,706,281 $887,371 $17,587,661 $6,009,119 $20,293,942 $6,896,489Total 92811$20,220,797 $11,372,763 $51,660,866 $22,495,902 $71,881,663 $33,86,665Hydro Power Units (335312)50–100 hp$0 $16,637$0 $22,959$0 $39,597100–175hp$0 $0 $0 $0 $0 $0175–300hp$0 $0 $0 $0 $0 $0300–600hp$0 $0 $0 $0 $0 $0600–750hp$0 $0 $0 $0 $0 $0>750hp$0 $0 $0 $0 $0 $0Total 335312$0 $16,637$0 $22,959$0 $39,597(continued)

### 4-28Table 4-4. Summary of Major Source and Area SourceNAICS Costs for the CI RICE NESHAP – by Sizea(continued)NAICSMajor Source Area Source Total (Major + Area)Capital Cost Annual Cost Capital CostAnnual Cost Capital Cost Annual CostIrrigation Sets (335312)50–100 hp$0 $245,565$0 $338,880$0 $584,446100–175 hp$3,137,134 $5,054,497 $0 $2,251,359 $3,137,134 $7,305,856175–300 hp$7,143,945 $6,486,744 $0 $2,604,167 $7,143,945 $9,090,911300–600 hp$12,145 $4,425 $27,320 $10,831 $39,465 $15,255600–750hp$849 $336 $6,825 $2,847 $7,674 $3,183>750hp$0 $0 $0 $0 $0 $0Total 335312$10,294,073 $11,791,567 $34,145 $5,208,984 $10,328,218 $16,999,651Welders (333992)50–100 hp$0 $1,307,020$0 $1,803,688$0 $3,110,708100–175 hp$108,260 $174,427$0 $77,693 $108,260 $252,119175–300hp$0 $0 $0 $0 $0 $0300–600hp$0 $0 $0 $0 $0 $0600–750hp$0 $0 $0 $0 $0 $0>750hp$0 $0 $0 $0 $0 $0Total 333992$108,260 $1,481,447$0 $1,881,380 $108,260 $3,362,827Grand TotalTotal $217,359,106$134,632,238$519,823,039$237,267,114$737,182,145$371,899,352aCosts are presented in 2008 dollars.

### 4-29Table 4-5. Summary of Major Source and Area Source NAICSCosts for the CI RICE NESHAP – by Number of EnginesaNAICSNumber of Engines Total (Major + Area)MajorAreaTotal Capital Cost Annual CostElectric Power Generation (2211)50–100 hp47,32479,859127,183$0 $8,668,603100–175 hp67,713114,266181,980 $13,406,919 $32,425,129175–300 hp59,03999,627158,666 $23,012,914 $30,333,314300–600 hp42,11397,919140,032 $342,146,301 $132,528,144600–750 hp1,76016,45518,215 $68,208,846 $28,308,997>750 hp3,82828,74632,574 $179,939,195 $61,181,035Total 2211221,777436,872658,649 $626,717,174 $293,445,222Hospitals (622110)50–100 hp 5,916 0 5,916 $0 $424,515100–175 hp8,46408,464$1,675,865 $2,700,125175–300 hp7,38007,380$2,876,614 $2,611,983300–600 hp5,26405,264 $12,113,408 $4,413,108600–750 hp2200220$848,629 $335,662>750 hp4790479$2,706,281 $887,371Total 62211027,722027,722 $20,220,797 $11,372,763Crude Petroleum & NG Production (211111)50–100 hp 5,856 8,784 14,640 $0 $1,000,210100–175 hp10,23715,35525,592$2,026,868 $4,720,233175–300 hp91423$3,592$4,571300–600 hp66136202$493,310 $190,692600–750 hp000$0$0>750 hp34227261$1,440,746 $489,609Total 21111116,20224,51740,719$3,964,516 $6,405,314(continued)

### 4-30Table 4-5. Summary of Major Source and Area Source NAICSCosts for the CI RICE NESHAP – by Number of Enginesa(continued)NAICSNumber of Engines Total (Major + Area)MajorAreaTotal Capital Cost Annual CostNatural Gas Liquid Producers (211112)50–100 hp5,8568,78414,640$0 $1,000,210100–175 hp10,23715,35525,592$2,026,868 $4,720,233175–300 hp91423$3,592$4,571300–600 hp66136202$493,310 $190,692600–750 hp000$0$0>750 hp34227261$1,440,746 $489,609Total 21111216,20224,51740,719$3,964,516 $6,405,314National Security (92811)50–100 hp5,9168,87314,789$0 $1,010,346100–175 hp8,46412,69621,160$1,675,865 $3,902,806175–300 hp7,38011,07018,450$2,876,614 $3,660,589300–600 hp5,26410,88016,144 $39,362,190 $15,215,695600–750 hp2201,8282,048$7,673,053 $3,182,740>750 hp4793,1943,672 $20,293,942 $6,896,489Total 9281127,72248,54176,263 $71,881,663 $33,868,665Hydro Power Units (335312)50–100 hp 232 348 580 $0 $39,597100–175 hp000$0$0175–300 hp000$0$0300–600 hp000$0$0600–750 hp000$0$0>750 hp000$0$0Total 335312232348580$0$39,597(continued)

### 4-31Table 4-5. Summary of Major Source and Area Source NAICSCosts for the CI RICE NESHAP – by Number of Enginesa(continued)NAICSNumber of Engines Total (Major + Area)MajorAreaTotal Capital Cost Annual CostIrrigation Sets (335312)50–100 hp3,4225,1338,555$0 $584,446100–175 hp15,84523,76739,611$3,137,134 $7,305,856175–300 hp18,32727,49145,819$7,143,945 $9,090,911300–600 hp51116$39,465$15,255600–750 hp022$7,674$3,183>750 hp000$0$0Total 33531237,59956,40394,003 $10,328,218 $16,999,651Welders (333992)50–100 hp18,21327,31945,532$0 $3,110,708100–175 hp5478201,367$108,260 $252,119175–300 hp000$0$0300–600 hp000$0$0600–750 hp000$0$0>750 hp000$0$0Total 33399218,76028,14046,899$108,260 $3,362,827Grand TotalTotal 366,217 619,337 957,832 $737,182,145$371,899,352aCosts are presented in 2008 dollars.4-32 4.4 Baseline Emissions and Emission Reductions The emissions reductions associated with the proposed reconsidered rule are based on requiring emission standards that are based on applying add-on controls to non-emergency CI engines greater than 500 HP. Baseline emissions from the current population of stationary RICE less than or equal to 500 HP at major sources and existing stationary RICE at area sources were calculated based on non-emergency CI engines operating 1,000 hrs/yr, and emergency CI engines operating 50 hrs/yr. While the amendments the EPA is proposing for stationary emergency engines increases the time allowed for participation in emergency demand response programs and for certain engines to operate for peak shaving or other income-generating activities, the EPA believes that 50 hours per y ear is still representative of emergency engine operation. There is a wide range in how much stationary emergency engines operate. Some emergency units operate well below 50 hrs/yr, while some emergency engines are run above 50 hrs/yr. However, on average and to be conservative, the EPA believes that 50 hrs/yr is still representative and consequently to estimate em issions from stationary emergency engines, the EPA has retained the assumption that 50 hrs/ yr is appropriate. The following additional assumptions were used:

Emission Factors: Engine HAP (lb/hp-hr) CO (lb/hr) PM (lb/hp-hr) SO 2 (lb/hp-hr) CI 1.07x10 -4 6.96x10 -1 7.00x10 -4 0.00809xS 1 * *Obtained from AP-42, section 3.4 where S 1 is sulfur content.

Control Efficiencies: Technology HAP CO PM Oxidation catalyst 70% 70% 30%

Based on the above assumptions and the existing population of engines shown earlier in this section, the HAP, CO, and PM baseline emissions and reductions were calculated The estimated baseline emissions for each HAP and criteria pollutant in tons per year (tpy) for the final rule are shown in Table 4-6. The estimated emission reductions for each HAP and criteria pollutant reductions in tons per year (tpy) as a result of the final rule are shown in Table 4-7. In addition, it is expected that additional PM re ductions will be achieved by the requirement to use ULSD for CI engines that install a DOC. The use of ULSD reduces the4-33 formation of sulfates in the exhaust gas, ther efore reducing the emission of these sulfate PM emissions from the exhaust. EPA has estimated that the use of ULSD can reduce PM emissions by 5 to 30 percent depending on the sulfur concentr ation of the diesel fuel that is being replaced. Because EPA has no information on the type of fuel that CI engines are currently using, the PM reductions from switching to ULSD were not quantified and included in this summary. The EPA is proposing that existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are subject to state and locally enforceable rules requiring replacement of the engine by January 1, 2018 can meet management practices under the RICE NESHAP for a period of 2 years until May 3, 2015. The San Joaquin Valley APCD has identified 49 Tier 1 engines and 360 Tier 2 engines that are scheduled to be replaced under the local rule. The EPA has not identified any engines outside the San Joaquin Valley APCD area that are in the same or similar situation and although the EPA does not preclude the possibility that there are additional such engines, the EP A has no information on this. Therefore, for purposes of estimating reductions under the proposed amendments, the EPA has subtracted only those 409 engines from the previous control cost estimate and assumed that an additional 409 engines will be meeting management practices under the rule. The EPA is also proposing to specify that any existing certified Tier 3 CI engine that was installed before June 12, 2006, is in compliance with the NESHAP. This amendment would include any existing stationary Tier 3 certified CI engine located at an area source of HAP emissions. There are 17 Tier 3 engines (2006 m odel year) located in San Joaquin Valley that were installed between January 1 and June 12, 2006. The EPA does not know if there are additional engines in other areas that in a si milar situation and the EPA has no information indicating how many such engines there could be in the rest of the country. Therefore, for purposes of calculating reductions, the EPA has included 17 less engines from the control cost estimate. These 17 engines would under the proposed amendments be subject to management practices. The work practice requirement of using an op en crankcase ventilation system to control metallic HAP emissions is expected to achieve additional HAP reductions from CI engines. However, the metallic HAP emission reduction cannot be quantified because of the difficulty of measuring metallic HAP from the crankcase exhaust. Therefore, the metallic HAP reductions are not included in the total emission reductions. Also, all PM emissions are assumed to be in the fine particle emissions; th us all emissions and PM emission reductions are assumed to be PM 2.5 .4-34 Table 4-6. Summary of Major Source and Area Source Baseline Emissions for the CI RICE NESHAP in 2013

Summary of Major Source and Area Source Baseline Emissions for the RICE NESHAP Size Range (HP) Baseline Emissions (tpy) HAP CO NO x PM SO 2 VOC Major Sources 50-100 89 7,745 18,361 584 338 2,412 100-175 215 10,148 44,107 1,403 811 5,794 175-300 281 7,696 57,774 1,838 1,062 7,589 300-500 249 4,049 51,196 1,629 941 6,725 500-600 25 299 5,201 165 115 683 600-750 16 153 3,267 104 72 429

>750 52 338 10,677 340 236 1,402 Total 927 30,428 190,583 6,064 3,575 25,035 Area Sources 50-100 132 11,424 27,083 862 498 3,558 100-175 316 14,969 65,058 2,070 1,196 8,546 175-300 414 11,351 85,217 2,711 1,567 11,194 300-600 613 8,857 106,551 4,009 2,083 16,550 600-750 154 1,485 26,791 1,008 589 4,161

>750 404 2,630 70,314 2,645 1,546 10,921 Total 2,034 50,717 381,015 13,305 7,479 54,930

Grand Total 2,961 81,145 571,598 19,369 11,053 79,9654-35 Table 4-7. Summary of Major Source and Area Source Emissions Reductions for the CI RICE NESHAP in 2013

Summary of Major Source and Area Source Emis sion Reductions for the CI RICE NESHAP

Size Range (HP) Emission Reductions (tpy) HAP CO PM VOC Major Sources 50-100 0 0 0 0 100-175 44 2,072 123 1,183 175-300 57 1,571 161 1,549 300-500 145 2,362 407 3,923 500-600 18 209 50 478 600-750 11 107 31 300

>750 36 236 102 982 Total 312 6,558 874 8,416 Area Sources 50-100 0 0 0 0 100-175 0 0 0 0 175-300 0 0 0 0 300-600 363 5,244 1,017 9,798 600-750 91 879 256 2,463

>750 239 1,557 671 6,466 Total 693 7,680 1,944 18,727 Total 1,005 14,238 2,818 27,142 28 PM Estimate for 2010 Final CI Rule 1,014 14,342 2,844 27,395 Difference 9 104 26 253

Note: All emission reduction estimates are from “ RICE NESHAP Reconsideration Amendments- Cost and Environmental Impacts ,” prepared by Tanya Pari se, Ec/R, Inc. for Melanie King, U.S. EPA, Office of Air Quality Planning and Standards

.5-1 SECTION 5 ECONOMIC IMPACT ANALYSIS, ENERGY IMPACTS, AND SOCIAL COSTS The EIA provides decision makers with social cost estimates and enhances understanding of how the costs may be distributed across stakeholders (EPA, 2010). Although several economic frameworks can be used to estimate social costs for regulations of this size and sector scope, OAQPS has typically used partial equilibrium market models. However, the current data do not provide sufficient details to develop a mark et model; the data that are available have little or no sector/firm detail and are reported at the na tional level. In addition, some sectors have unique market characteristics (e.g., hospitals) that make developing partial equilibrium models difficult. Given these constraints, we believed the direct compliance costs as a reasonable approximation of total social costs. In addition, we also provide a qualitative analysis of the proposed rule’s economic impact on stakeholder decisions, a qu alitative discussion on if unfunded mandates occur as a result of this pr oposed rule, and a qualitative discussion of the potential distribution of social costs between consumers and producers. 5.1 Compliance Costs of the Final Rule For the year 2013, EPA’s engineering cost analysis estimates the total annualized costs of the final rule are $372 million (in 2008 dollars) (EC/R, 2012). As shown in Figure 5-1, the majority of the costs fall on the electric power sector (79%), followed by national security (9%). The remaining industries each account for 5% or less of the total annualized cost. The industrial classification for each engine is taken from the Power Systems Research (PSR) database, which is the major source of data for the engines affected by the final rule. The PSR database used as a basis for the analyses in this RIA contains information on both mobile and stationary onroad and nonroad engines, among other data, and does so not only for the U.S. but worldwide. PSR has collected such data for more than 30 years. The Office of Transportation and Air Quality (OTAQ) uses this database frequently in the development of their mobile source rules. The annualized compliance costs per engine vary by the engine size (see Figure 5-2). For 300 hp engines or less, the annualized per-engine costs are below $215 per engine. Per-engine costs for higher horsepower (hp) engines range between $950 and $1,900. The final rule will affect approximately one m illion existing stationary diesel engines. As shown in Figure 5-3, most of the affected engines fall within the 100 to 175 hp category (31%).5-2 The next highest categories are 50 to 100 hp (24%) and 175 to 300 hp (23%). The remaining engines are concentrated in the 300 to 600 hp category (16%).

Figure 5-1. Distribution of Annualized Direct Compliance Costs by Industry: 2013 79%

3% 2% 2% 9%

0% 5%

1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Electric Power Generation(2211)Hospitals (622110)Crude Petroleum & NGProduction (211111)Natural Gas Liquid Producers(211112)National Security (92811)Hydro Power Units (335312)Irrigation Sets (335312)Welders (333992)5-3 Figure 5-2. Average Annualized Cost per Engine by Horsepower Group: 2013 ($2008)

Figure 5-3. Distribution of Engine Population by Horsepower Group: 2013 $68 $198 $212 $952 $1,549 $1,877

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000

50-100 hp 100-175 hp 175-300 hp 300-600 hp 600-750 hp >750 hp

24% 31%

23%

16%

2% 4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

50-100 hp 100-175 hp 175-300 hp 300-600 hp 600-750 hp >750 hp5-4 To assess the size of the compliance cost relative to the value of the goods and services for industries using affected engines, we collected Census data for selected industries. At the industry level, the annualized costs represent a very small fraction of revenue (less than 0.07%) (Table 5-1). These industry level cost-to-sales ratios can be interpreted as an average impact on potentially affected firms in these industries. Based on the cost-to-sales ratios, we can conclude that the annualized cost of this rule should be no higher than 1% of the sales on average for a firm in each of these industries. Table 5-1. Selected Industry-Level Annualized Compliance Costs as a Fraction of Total Industry Revenue: 2008

Industry (NAICS) Industry Name Total Annualized Costs ($ million) a Sales, Shipments, Receipt, or Revenue ($ Billion) Cost-to-Sales Ratio ($2007) ($2008) 2211 Electric Power Generation $293.4 $440.4 $449.8 0.07% 622110 Hospitals $11.4 $663.6 $677.8 0.00% 211111 Crude Petroleum & NG Production $6.4 $214.2 $218.8 0.00%

211112 Natural Gas Liquid Producers $6.4 $42.4 $43.3 0.02%

92811 National Security $33,9 #N/A #N/A #N/A 333992 Welders $3.4 $5.2 $5.3 0.06% 111 and 112 Agriculture using irrigation systems a $17.0 $27.9 $28.5 0.05%

a Irrigation engine costs assumed to be passed on to agricultural sectors that use irrigation systems. N/A: receipts are Not Available for National Security Sources: U.S. Census Bureau; generated by RTI Internationa l; using American FactFinder; “Sector 00: All sectors:

Geographic Area Series: Economy-Wide Key Statistics: 2007” <http://factfinder.census.gov>; (January 4th , 2010). U.S. Department of Agriculture (USDA), National Agri cultural Statistics Service (NASS). 2009. “2008 Farm and

Ranch Irrigation Survey.” Washington, DC: USDA-NASS. Nelson, B., EC/R Inc. February 17, 2010. Memorandum to Melanie King, U.S. Environmental Protection

Agency. Impacts Associated with NES HAP for Existing Stationary CI RICE. 5.2 Social Cost Estimate As shown in Table 5-1, the compliance costs are only a small fraction of the affected product value; this suggests that shift of the supply cu rve may also be small and result in small changes in market prices and consumption. EPA believes the national annualized compliance cost estimates provide a reasonable approximation of the social cost of this proposed rule. EPA believes this approximation is better for indus tries whose markets are well characterized as5-5 perfectly competitive. This approximation is less well understood for industries where the characterization of markets is not always perfect ly competitive such as electric power generation whose legal incidence of this rule is approximately 80 percent of the annualized compliance cost. However, given the data limitation noted earlier, EPA believes the accounting for compliance cost is a reasonable approximation to inform policy discussion in this rulemaking. To shed more light on this issue, EPA ran hypothetical analyses and the results are later in the RIA in Tables 5- 2 and 5-3. 5.3 How Might People and Firms Respond? A Partial Equilibrium Analysis Markets are composed of people as consum ers and producers trying to maximize utility (consumers) and maximize profits (producers) they can given their economic circumstances. One way economists illustrate behavioral responses to pollution control costs is by using market supply and demand diagrams. The market supply curve describes how much of a good or service firms are willing and able to sell to people at a particular price; this curve is typically upward sloping because some production resources are fixed. As a result, the cost of producing an additional unit typically rises as more units are made. The market demand curve describes how much of a good or servi ce consumers are willing and able to buy at some price. Holding other factors constant, the quantity demand is assumed to fall when prices rise. In a perfectly competitive market, equilibrium price (P 0 ) and quantity (Q 0 ) is determined by the intersection of the supply and demand curves (see Figure 5-4). 5.3.1 Changes in Market Prices and Quantities To qualitatively assess how the regulation may influence the equilibrium price and quantity in the affected markets, we assumed the market supply function shifts up by the additional cost of producing the good or service; the unit cost increase is typically calculated by dividing the annual compliance cost estimate by the baseline quantity (Q 0 ) (see Figure 5-4). As shown, this model makes two predictions: the pri ce of the affected goods and services are likely to rise and the consumption/production levels are likely to fall.5-6 consumer surplus = –[fghd + dhc] producer surplus = [fghd – aehb] – bdc total surplus = consumer surplus + producer surplus = –[aehb + dhc + bdc] Figure 5-4. Market Demand and Supply Model: With and Without Regulation

The size of these changes depends on two f actors: the size of the unit production cost increase (supply shift) and differences in how each side of the market (supply and demand) responds to changes in price. Economists measur e responses using the concept of price elasticity, which represents the percentage change in quantity divided by the percentage change in price. This dependence has been expressed in the following formula: 1 

##   Demand) of Elasticity Price -Supply of Elasticity Price Supply of Elasticity Price

 cost production uniter- Share of p

As a general rule, a higher share of the per-unit cost increases will be passed on to consumers in markets where

 goods and services are necessities and people do not have good substitutes that they can switch to easily (demand is inelastic) and

1 For examples of similar mathematical models in the public finance literature, see Nicholson (1998), pages 444–447, or Fullerton and Metcalf (2002).5-7  suppliers have excess capacity and can easily adjust production levels at minimal costs, or the time period of analysis is long enough that suppliers can change their fixed resources; supply is more elastic over longer periods. Short-run demand elasticities for energy goods (electricity and natural gas), agricultural products, and construction are often inelastic. Sp ecific estimates of short-run demand elasticities for these products can be obtained from existing literature. For the short-run demand of energy products, the National Energy Modeling System (NEMS) buildings module uses values between 0.1 and 0.3; a 1% increase in price leads to a 0.1 to 0.3% decrease in energy demand (Wade, 2003). For the short-run demand of agriculture and construction, the EPA has estimated elasticities to be 0.2 for agriculture and approximately 1 for construction (EPA, 2004). As a result, a 1% increase in the prices of agriculture products would lead to a 0.2% decrease in demand for those products, while a 1% increase in construction prices would lead to approximately a 1% decrease in demand for construction. Given these demand elasticity scenarios (shaded in gray), approximately a 1% increase unit costs would result in a price increase of 0.1 to 1% (Table 5-2). As a result, 10 to 100% of the unit cost increase could be passed on to consumers in the form of higher goods/services prices. This price increase would correspond to a 0.1 to 0.8% decline in consumption in these markets (Table 5-3). Table 5-2. Hypothetical Price Increases for a 1% Increase in Unit Costs

Market Demand Elasticity Market Supply Elasticity 0.1 0.3 0.5 0.7 1 1.5 3

− 0.1 0.5% 0.8% 0.8% 0.9% 0.9% 0.9% 1.0%

− 0.3 0.3% 0.5% 0.6% 0.7% 0.8% 0.8% 0.9%

− 0.5 0.2% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9%

− 0.7 0.1% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8%

− 1.0 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.8%

− 1.5 0.1% 0.2% 0.3% 0.3% 0.4% 0.5% 0.7%

− 3.0 0.0% 0.1% 0.1% 0.2% 0.3% 0.3% 0.5%

5.3.2 Regulated Markets: The Electric Power Generation, Transmission, and Distribution Sector Given that the electric power sector bears majority of the estimated compliance costs (Figure 5-1) and the industry is also among the last major regulated energy industries in the United States (EIA, 2000), the competitive model is not necessarily applicable for this industry.5-8 Table 5-3. Hypothetical Consumption Decreases for a 1% Increase in Unit Costs

Market Demand Elasticity Market Supply Elasticity 0.1 0.3 0.5 0.7 1 1.5 3

− 0.1

− 0.1%

− 0.1% − 0.1% − 0.1% − 0.1% − 0.1% − 0.1%

− 0.3

− 0.1% − 0.2% − 0.2% − 0.2% − 0.2% − 0.3% − 0.3%

− 0.5

− 0.1% − 0.2% − 0.3% − 0.3% − 0.3% − 0.4% − 0.4%

− 0.7

− 0.1%

− 0.2% − 0.3% − 0.4% − 0.4% − 0.5% − 0.6%

− 1.0

− 0.1% − 0.2% − 0.3% − 0.4% − 0.5% − 0.6% − 0.8%

− 1.5

− 0.1% − 0.3% − 0.4% − 0.5% − 0.6% − 0.8% − 1.0%

− 3.0

− 0.1%

− 0.3% − 0.4% − 0.6% − 0.8% − 1.0% − 1.5%

Although the electricity industry continues to go through a process of restructuring, whereby the industry is moving toward a more competitiv e framework (see Figure 5-5 for the status of restructuring by state), 2 in many states, electricity prices continue to be fully regulated by Public Service Commissions. As a result, the rules an d processes outlined by these agencies would ultimately determine how these additional regulatory costs would be recovered by affected entities. 5.3.3 Partial Equilibrium Measures of Social Cost: Changes Consumer and Producer Surplus In partial equilibrium analysis, the social co sts are estimated by measuring the changes in consumer and producer surplus, and these values can be determined using the market supply and demand model (Figure 5-4). The change in consumer surplus is measured as follows:



CS = – [  Q 1 ×  p ] + [0.5 ×  Q ×  p ]. (5.1) Higher market prices and lower quantities lead to consumer welfare losses. Similarly, the change in producer surplus is measured as follows:



PS = [  Q 1 ×  p ] – [  Q 1 × t] – [0.5 ×  Q × (  p – t)]. (5.2) Higher unit costs and lower production level reduce producer surplus because the net price change (  p – t) is negative. However, these losses are mitigated because market prices tend to rise.

2 http://tonto.eia.doe.gov/energy_in_brief/print_pages/electricity.pdf.5-9 Figure 5-5. Electricity Restructuring by State Source. U.S. Energy Information Administration. 2010a.

<http://www.eia.doe.gov/cneaf/electricity/page/restruct uring/restructure_elect.html>. Last updated September 2010. 5.4 Energy Impacts Executive Order 13211 (66 FR 28355, May 22, 2001) provides that agencies will prepare and submit to the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, a Statement of Energy Effects for certain actions identified as “significant energy actions.” Section 4(b) of Executive Order 13211 defines “significant energy actions” as any action by an agency (normally published in the Federal Register ) that promulgates or is expected to lead to the prom ulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1) (i) that is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action.5-10 This rule is not a significant energy action as designated by the Administrator of the Office of Information and Regulatory Affairs because it is not likely to have a significant adverse impact on the supply, distribution, or use of en ergy. EPA has prepared an analysis of energy impacts that explains this conclusion as follows below. With respect to energy supply and prices, the analysis in Table 5-1 suggests at the industry level, the annualized costs represent a very small fraction of revenue (less than 0.7%). As a result, we can conclude supply and price impacts should be small. To enhance understanding regarding the regulation’s influence on energy consumption, we examined publicly available data describing energy consumption for the electric power sector that will be affected by this rule. The Annual Energy Outlook 2011 (EIA, 2011) provides energy consumption data. As shown in Table 5-4, this in dustry account for about 0.3% of the U.S. total liquid fuels and less than 8% of natural gas. As a result, any energy consumption changes attributable to the regulatory program should no t significantly influence the supply, distribution, or use of energy. 5.5 Unfunded Mandates Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538, requires Federal agencies, unless otherwise prohibited by law, to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains a Federal mandate that may result in expe nditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one year. Accordingly, EPA has prepared under section 202 of the UMRA a written statement which is summarized below in this section.5-11 Table 5-4. U.S. Electric Power a Sector Energy Consumption (Quadrillion BTUs): 2013

Quantity Share of Total Energy Use Distillate fuel oil 0.09 0.1% Residual fuel oil 0.22 0.2% Liquid fuels subtotal 0.31 0.3% Natural gas 7.63 7.9% Steam coal 17.37 18.0% Nuclear power 8.50 8.8% Renewable energy b 4.63 4.8% Electricity Imports 0.12 0.1%

Total Electric Power Energy Consumption c 38.77 40.1% Delivered Energy Use 70.56 73.2% Total Energy Use 96.66 100.0%

a Includes consumption of energy by electricity-only and co mbined heat and power plants whose primary business is

to sell electricity, or electricity and heat, to the pu blic. Includes small power producers and exempt wholesale generators. b Includes conventional hydroelectric, geothermal, wood and wood waste, biogenic municipal solid waste, other

biomass, petroleum coke, wind, photovoltaic and solar thermal sources. Excludes net electricity imports.

c Includes non-biogenic municipal waste not included above. Source: U.S. Energy Information Administration. 2011a . Supplemental Tables to the Annual Energy Outlook 2011,

projections for 2013. Available at: http://www.eia. gov/oiaf/aeo/tablebrowser/#release=EARLY2012&subject=6- EARLY2012&table=2-EARLY2012®ion=1-0&cases=full2011-d020911a,early2012-d121011b 5.5.1 Future and Disproportionate Costs The UMRA requires that we estimate, where accurate estimation is reasonably feasible, future compliance costs imposed by the rule and any disproportionate budgetary effects. Our estimates of the future compliance costs of the final rule are discussed previously in Section 4 of this RIA. We do not believe that there will be any disproportionate budgetary effects of the final rule on any particular areas of the country, State or local governments, types of communities (e.g., urban, rural), or particular industry segments. 5.5.2 Effects on the National Economy The UMRA requires that we estimate the effect of the proposed rule on the national economy. To the extent feasible, we must estimate the effect on productivity, economic growth, full employment, creation of productive jobs, and international competitiveness of the U.S. goods and services if we determine that accurate estimates are reasonably feasible and that such effect is relevant and material. The nationwide economic impact of the proposed rule is presented earlier in this RIA chapter. This analysis provides estimates of the effect of the5-12 proposal rule on most of the categories mentioned above, and these estimates are presented earlier in this RIA chapter. In addition, we have determined that the proposed rule contains no regulatory requirements that might significan tly or uniquely affect small governments. Therefore, today’s rule is not subject to the requirements of section 203 of the UMRA. 5.6 Environmental Justice

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health orenvironmental effects of their programs, policies, and activities on minority populations and lowincome populations in the United States. EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it increases the level of environmental protection fo r all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. This rule is a nationwide standard that reduces air toxics emissions from existing statio nary CI engines, thus decreasing the amount of such emissions to which all affected populations are exposed.

5.7 Employment Impact Analysis In addition to addressing the costs and benefits of the proposed rule, EPA has analyzed the impacts of this rulemaking on employment, which are presented in this section. While a standalone analysis of employment impacts is not included in a standard cost-benefit analysis, such an analysis is of particular concern in the current economic climate of sustained high unemployment. Executive Order 13563, states, “Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation” (emphasis added). Therefore, and consistent with recent efforts to characterize the employment effects of economically significant rules, the Agency has provided this analysis to inform the discussion of labor demand and employment impacts. The analysis includes estimates of certain short-term and on-going labor requirements (increase in labor demand) associated with reporting and recordkeeping, and the installation, Comment [A1]: Please correct.5-13 operating and maintenance of control devices. EPA estimates that approximately 1,300 fulltime equivalents (FTEs) will be created or supported in the short-term (the compliance period of the regulation) and approximately 2,000 FTEs will be created or supported annually on a permanent basis. EPA also provides a qualitati ve discussion of other potential employment effects, including both increases and decreases. Because of the uncertainties involved, these sets of estimates should not be added in an attempt to characterize the overall employment effect. We have not quantified the rule’s net effects on the over all labor market , or the potential changes to workers’ incomes. EPA continues to explore the relevant theoretical and empirical literature and to seek public comments in order to ensure that such estimates are as accurate, useful and informative as possible. From an economic perspective, labor is an input into producing goods and services; if regulation requires that more labor be used to produce a given amount of output, that additional labor is reflected in an increase in the cost of production. 3 When an increase in employment occurs as a result of a regulation, it is a cost to firms. Moreover, when the economy is at full employment, we would not expect an environmental regulation to have an impact on overall employment because labor is being shifted from one sector to another. On the other hand, in periods of high unemployment, an increase in labor demand due to regulation may result in a short-term net increase in overall employment due to the potential hiring of previously unemployed workers by the regulated sector to he lp meet new requirements (e.g., to install new equipment) or by the environmental protection sector to produce new abatement capital. When significant numbers of workers are unemployed, th e opportunity costs associated with displacing jobs in other sectors are likely to be smaller. And, in general, if a regulation imposes high costs and does not increase the demand for labor, it may lead to a decrease in employment. To provide a partial picture of the employment consequences of this rule, EPA takes two approaches. First, EPA uses information such as monitoring, recordkeeping, and reporting estimates derived from its cost analysis documentation to generate estimates of employment impacts. Second, the analysis considers the results of Morgenstern, Pizer, and Shih (2002) in estimating the effects of the regulation on the regulated industry. This approach has been used by EPA previously in recent Regulatory Impact Analyses. EPA is interested in public comments on

3 It should be noted that if more labor must be used to produce a given amount of output, then this implies a decrease in labor productivity. A decrease in labor productivity wi ll cause a short-run aggregat e supply curve to shift to the left, and businesses will produce le ss, all other things being equal. Deleted: jobs Deleted: jobs

Deleted: in other sectors not regulated by the proposed rule Deleted: effects induced by Deleted: in Deleted: What follows is an overview of the various ways that environmental regulation can affect employment, followed by a discussion of the estimated impacts of this rule.5-14 the merits of including information derived in this fashion for assessing the employment consequences of regulations.

5.7.1 Employment Impacts from Pollution Control Requirements Regulations set in motion new orders for pollution control equipment and services. When a new regulation is promulgated, one typical res ponse of industry is to order pollution control equipment and services in order to comply with the regulation when it becomes effective, while closure of plants that choose not to comply is assumed to occur after the compliance date. With such a response by industry as a basis, this section presents estimates for short term labor requirement needed associated with the monitoring, recordkeeping, and reporting requirements for this proposed rule. Environmental regula tion may increase revenue and employment in the environmental technology industry. While these increases represent gains for that industry, they are costs to the regulated industries required to in stall the equipment. As with any pool of labor, the gross size of the labor pool does not refl ect the net impact on overall employment after adjusting for shifts in other sectors. Regulated firms may hire workers to design and build pollution controls. Once the equipment is installed, regulated firms may hire workers to operate and maintain the pollution control equipment – much like they may hire workers to produce more output. Of course, these firms may also reassign existing employees to do these activities. A study by Bezdek, Wendling, and DiPernab (2008) found that “investments in environmental protection create jobs and displace jobs, but the net effect on employment is positive.” 4 Once the equipment is installed, regulated firms may hire workers to operate and maintain the pollution control equipment – much like they may hire workers to produce more output. The focus of this part of the analysis is on labor requirements related to the compliance actions of the affected entities within the affected sector The employment analysis uses a bottom-up engineering-based methodology to estimate employment impacts. The engineering cost analysis summarized in Section 4 of this RIA includes estimates of the labor requirements associated with implementing the proposed regulations. Each of these labor changes may either be required as part of an initial effort to comply with the new regulation or required as a continuous or annual effort to maintain

4 Environmental protection, the economy, and jobs: National and regional analyses , Roger H. Bezdek, Robert M. Wendling and Paula DiPerna, Journal of Environmental Management Volume 86, Issue 1 , January 2008, Pages 63-79. Deleted: New categories of employment have been created in the process of implementing regulations. Deleted: s Deleted: employment Deleted: Environmental regulations also support employment in many basic industries. In addition to the increase in employment in the pollution control industry (to fill increased orders for pollution control equipment placed by the regulated sector), environmental regulations also support employment in industries that provide intermediate goods to the pollution control industry. For example, an investment in capital expenditures to reduce air pollution involves the purch ase of abatement equipment. The equipment manufacturers, in turn, order steel, tanks, vessels, blowers, pumps, and chemicals to manufacture and install the equipment. Comment [A2]: This study is very limited in scope. Suggest including language “A study of the XYZ sector in ABC State in 19XX by Bezdek..” Otherwise it suggests that the results are more representative than they are.

Deleted: The majority of the jobs associated with added pollution controls (e.g., boilermakers, general construction workers, etc.) will provide domestic employment opportunities, but some goods and services demanded and/or provided to the pollution control industry (e.g., steel, cement, etc.) are internationally traded goods.

Formatted: Space After: 6 pt, Line spacing: At least 12 pt Deleted: Morgenstern¶ et al. (2002) examined how regulated industries respond to regulation. The authors found that,¶ ... [1]

Formatted: Space After: 0 pt Deleted: . We do not estimate any potential¶ changes in labor outside of the affected sector. It is important to highlight that unlike the typical case where to reduce a ... [2]5-15 compliance. We estimate up-front and continual, annual labor requirements by estimating hours of labor required and converting this number to full-time equivalents (FTEs) by dividing by 2,080 (40 hours per week multiplied by 52 weeks) . We note that this type of FTE estimate cannot be used to make assumptions about the specific number of people involved or whether new jobs are created for new employees. The results of this employment estimate are presented in Table 5-5 for the proposed NESHAP. The tables breaks down the installation, operation, and maintenance estimates by type of pollution control evaluated in the RIA and pr esent both the estimated hours required and the conversion of this estimate to FTE. For the proposed NESHAP, reporting and recordkeeping requirements were estimated requirements were estimated for the entire rule rather than by anticipated control requirements; the reporting and recordkeeping estimates are consistent with estimates EPA submitted as part of its Information Collection Request (ICR) that is in the Supporting Statement for the proposed reconsideration rule. The up-front labor requirement is estimated at 1,269 FTEs for the proposed reconsidered NESHAP. These up-front FTE labor requirements can be viewed as short-term labor requirements required for affected entities to comply with the new regulation. Ongoing requirements are estimated at about 1,978 FTEs for the proposed reconsidered NESHAP. These ongoing FTE labor requirements can be viewed as sustained labor requirements required for affected entities to continuously comply with the ne w regulation. All of this data is found in the cost memorandum for this proposed reconsidered rule, and can be found in the docket for the rulemaking. It is important to recognize that these seemingly precise estimates are not to be assumed to be exact measures of the employment impacts of this rulemaking. They represent a rough approximation of the small positive impa cts that this rule may have on employment.

Table 5-5. Labor-based Employment Estimates for Reporting and Recordkeeping and Installing, Operating, and Maintaining Cont rol Equipment Requirements for Proposed Reconsideration CI RICE NESHAP

Source Emission Control Measure Projected No. of Affected Units Per-UnitOneTime Labor Estimate (Hours) TotalOneTime Labor Estimate (Hours) Per-Unit Annual Labor Estimate (Hours) Total Annual Labor Estimate (Hours) One-Time Full-Time Equivalent Annual Full-Time Equivalent

All CI RICE -O&M Recordkeeping N/A 366,217 N/A N/A 1 366,217 N/A 176 Non-Emergency CI RICE 100- Comment [A3]: Is EPA confident about 4 significant digits?

Comment [A4]: Is EPA confident about 4 significant digits?5-16 300 HP -Testing Oxidation Catalyst 54,697 11 593,496 2 738,404 285 355 -Reporting 8 Non-Emergency CI RICE > 300 HP 3.5 -Testing Oxidation Catalyst + Crankcase Ventilation 11,966 47 563,170 5 636,134 271 306 -Reporting 8 -CPMS Install 3.5 -CPMS O&M 1 -CPMS Recording 30 Area Sources 6 All CI RICE -O&M Recordkeeping Non-Emergency CI RICE 100- 300 HP N/A 569,364 N/A N/A 1 569,364 N/A 274 -Testing N/A 64,095 N/ A N/A 2 128,190 N/A 62 -Reporting Non-Emergency CI RICE > 300 HP Oxidation Catalyst + Crankcase Ventilation + CPMS 31,526 47 1,483,695 5 1,675,922 713 806

-Testing 8 -Reporting 3.5 --CPMS Install 1 CPMS O&M 30 -CPMS Recording 6 Total 105 2,640,361 124 4,114,232 1,269 1,978 Note : Full-time equivalents (FTE) are estimated by first mult iplying the projected number of affected units by the per unit labor requirements and then dividing by 2,080 (40 hours multiplied by 52 weeks). Totals may not sum due to independent rounding. CPMS = Continuous Parameter Measurement System HP = horsepower N/A = Not Applicable. O&M = Operating and Maintenance

5.7.2 Employment Impacts within the Regulated Industry

In recent RIAs we have applied estimates from a study by Morgenstern, Pizer and Shih (2002) 5 to derive the employment effects of new regulations within the regulated

5 Morgenstern, R. D., W. A. Pizer, and J. S. Shih. 2002. Jobs versus the Environment: An Industry-Level Perspective. ‖ Journal of Environmental Economics and Management 43(3):412-436.5-17 industry. (See, for example, the Regulatory Impact Analyses for the recently released final MATS and final CSAPR regulations). Determining the direction of employment effects in the regulated industry is also challenging due to competing effects. Complying with the new or more stringent regulation requ ires additional inputs , including labor, and may alter the relative proportions of labor and capital used by regulated firms in their production processes. Morgenstern, et al. (2002) demonstrate that environmental regulations can be understood as requiring regulated firms to add a new output (environmental quality) to their product mixes. Although legally compelled to satisfy this new demand, regulated firms have to finance this additional production with the proceeds of sales of their other (market) products. Sa tisfying this new demand requires additional inputs, including labor, and may alter the rela tive proportions of labor and capital used by regulated firms in their production processes.

More specifically, Morgenstern, Pizer, and Shih (2002) decompose the effect of regulation on net employment in the regulated sector into the following three subcomponents:

 The Demand Effect : higher production costs from complying with the regulation will raise market prices, reducing consumption (and production), thereby reducing demand for labor within the regulated industry. The “extent of this effect depends on the cost increase passed on to consumers as well as the demand elasticity of industry output.” (p. 416)

 The Cost Effect : Assuming that the capital/labor ratio in the production process is held fixed, as “production costs rise, more inputs, including labor, are used to produce the same amount of output,” (p. 416). For example, to reduce pollutant emissions while holding output levels constant, regula ted firms may require additional labor.

 The Factor-Shift Effect : Regulated firms’ production technologies may be more or less labor intensive after complying with the regulation (i.e., more/less labor is required relative to capital per dollar of output). “Environmental activities may be more labor intensive than conventional production,” meaning that “the amount of labor per dollar of output will rise.” Howe ver, activities may, instead, be less labor intensive because “cleaner operations could involve automation and less employment, for example.” (p. 416)5-18 The demand effect is expected to have an unambiguously negative effect on employment, the cost effect to have an unambiguously pos itive effect on employment, and the factor-shift effect to have an ambiguous effect on employment. Without more information with respect to the magnitudes of these three competing effect s, it is not possible to predict the net environmental employment effect in the regulated sector. Using plant-level Census information between the years 1979 and 1991, Morgenstern et al. estimate the effects of pollution abatement expenditures on net employment in four highly polluting/regulated sectors (pulp and paper, plastics, steel, and petroleum refining). They conclude that increased abatement expenditures generally have not caused a significant change in net employment in those sectors. More specifically, their results show that, on average across the industries studied, each additional $1 million (in 1987$) spent on po llution abatement results in a (statistically insignificant) net increase of 1.55 (+/- 2.24) jobs. As a result, the authors conclude that increases in pollution abatement expenditures can have positive effects on employment and do not necessarily cause economically significant employment changes. The conclusion is similar to Berman and Bui (2001), who found that increased air quality regulation in Los Angeles did not cause large employment changes. Ideally, the EPA would first apply the methodology of Morgenstern et al. to current pollution expenditure and market data for the regula ted firms to identify the relationship between abatement costs and employment, then use this relationship to extrapolate the effect of new projected abatement costs on these firms. Unfort unately, current firm-level abatement cost and market characteristics are not available. In addition, there are important differences in the markets and regulatory settings analyzed in their study and the setting presented here that lead us to conclude that it is inappropriate to utili ze their quantitative estimates to estimate the employment impacts from this reconsideration proposal. The differences between the underlying regulations motivating the abatement expenditures studied in Morgenstern et al. are potentially too many to allow for the direct transfer of thei r quantitative estimates for use in analysis of the proposed rule. There are also important differe nces between the industries affected by this proposed rule and the four manufacturing industries studied by Morgenstern et al. For these reasons, we conclude there are too many uncertainties as to the comparability of the Morgenstern et al. study to apply their estimates to quantif y the employment impacts within the regulated sector for this proposed regulation. Comment [A5]: Is this result statistically significant?5-196-1 SECTION 6 SMALL ENTITY SCREENING ANALYSIS The Regulatory Flexibility Act as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities as defined by the Small Business Administration (SBA) include small businesses, small governmental jurisdictions, and small not-for-profit enterprises. After considering the economic impact of the proposed reconsideration rule on small entities, the screening analysis indicates that this proposed rule will not have a significant economic impact on a substantial number of small entities (or “SISNOSE”). Under the primary cost analyses EPA considered, sales and revenue tests for establishments owned by model small entities are less than 3% and only one group of establishments (irrigated farms with receipts less than $25,000) has a ratio exceeding 1%. These results are identical to those from the small entity analysis done for the final CI RICE rule promulgated in March 2010. 6.1 Small Entity Data Set The industry sectors covered by the proposed rule were identified during the development of the cost analysis (Nelson, 2012). The SUSB provides national information on the distribution of economic variables by industry and enterprise size (U.S. Census, 2006a, b). 1 The Census Bureau and the Office of Advocacy of the SBA supported and developed these files for use in a broad range of economic analyses. 2 Statistics include the total number of establishments and receipts for all entities in an industry; however, many of these entities may not necessarily be covered by the final rule. SUSB also provides statistics by enterprise employment and receipt size. The Census Bureau’s definitions used in the SUSB, which are stated in Section 3 and restated here for clarity of presentation, are as follows:

 Establishmen t: An establishment is a single physical location where business is conducted or where services or industrial operations are performed.

1 The SUSB data do not provide establishment information fo r the national security NAICS code (92811) or irrigated farms. Since most national security installations are owne d by the federal government (e.g., military bases), EPA assumes these entities would not be considered small. For irrigated farms, we relied on receipt data provided in the 2008 Farm and Irrigati on Survey (USDA, 2009). 2 See http://www.census.gov/csd/susb/ and http://www.sba. gov/advo/research/data.html for additional details.6-2  Receipts : Receipts (net of taxes) are defined as the revenue for goods produced, distributed, or services provided, including revenue earned from premiums, commissions and fees, rents, interest, divi dends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes.

 Enterprise : An enterprise is a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multiestablishment company forms one enterprise—the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments. Because the SBA’s business size definitions (SBA, 2010) apply to an establishment’s “ultimate parent company,” we assumed in this anal ysis that the “enterprise” definition above is consistent with the concept of ultimate parent company that is typically used for SBREFA screening analyses and the terms are used interchangeably. 6.2 Small Entity Economic Impact Measures The analysis generated a set of establishment sales tests (represented as cost-to-receipt ratios) 3 for NAICS codes associated with sectors listed in Table 6-1. Although the appropriate SBA size definition should be applied at the pare nt company (enterprise) level, we can only compute and compare ratios for a model establishment owned by an enterprise within an SUSB size range (employment or receipts). Using the SUSB size range helps us account for receipt differences between establishments owned by large and small enterprises and also allows us to consider the variation in small business de finitions across affected industries. Using establishment receipts is also a conservative approach, because an establishment’s parent company (the “enterprise”) may have other economic resources that could be used to cover the costs of the final rule. 6.2.1 Model Establishment Receipts and Annual Compliance Costs The sales test compares a representative establishment’s total annual engine costs to the average establishment receipts for enterprises in several size categories. 4 For industries with SBA

3 The following metrics for other small entity economic impa ct measures (if applicable) would potentially include

• small governments (if applicable): “revenue” test; annua lized compliance cost as a percentage of annual government revenues and

• small nonprofits (if applicable): “expenditure” test; a nnualized compliance cost as a percentage of annual operating expenses, 4 For the 1 to 20 employee category, we excluded SUSB data for enterprises with zero employees. These enterprises did not operate the entire year.6-3 employment size standards, we calculated average establishment receipts for each enterprise employment range (Table 6-2). 5 For industries with SBA receipt size standards, we calculated Table 6-1. Final NESHAP for Existing Stationary CI Reciprocating Internal Combustion Engines (RICE): Affected Sectors and SBA Small Business Size Standards

Industry Description Corresponding NAICS SBA Size Standard for Businesses (effective November 5 , 2010) Type of Small Entity Electric power generation 2211 a Business and government Natural Gas Transmission 48621 $7.0 million in annual receipts Business General medical & surgical hospitals 622110 $34.5 million in annual receipts Business and government

Crude petroleum and natural gas production 211111 500 employees Business

Natural gas liquid producers 211112 500 employees Business

National security 92811 NA Government Hydro power units See NAICS 2211 a Business and government Irrigation sets Affects NAICS 111 and 112 Generally $750,000 or less in annual receipts Business

Welders Affects industries that use heavy equipment such as construction,

mining, farming Varies by 6-digit NAICS code; Example industry: NAICS 238 = $14 million in annual receipts Business

a NAICS codes 221111, 221112, 221113, 221119, 221121, 221122: A firm is small if, including its affiliates, it is

primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours. Source: U.S. Small Business Administration (SBA). 2010. “Table of Small Business Si ze Standards Matched to

North American Industry Classification System Codes.” Effective November 5nd, 2010. Downloaded 2/16/12. average establishment receipts for each enterprise receipt range (Table 6-3). We included the utility sector in the second group , although the SBA size standard fo r this industry is defined in terms of physical units (megawatt hours) versus receipts. Crop and animal production (NAICS 111 and 112) also have an SBA receipt size stan dard that defines a small business as receiving $750,000 or less in receipts per year. However, SUSB data were not available for these industries. Therefore, we conducted the sales test using the following range of establishment

5 We use 2007 Economic Census data in estimating number of establishments by industry. The release schedules for different types of 2007 Economic Census data are at http://www.census.gov/econ/census07/pdf/EconCensusScheduleByDate.pdf

.6-4 receipts: farms with annual receipts of $25,000 or less, farms with annual receipts of $100,000 or less, farms with annual receipts of $500,000 or less, and farms with annual receipts of $750,000 or less.

### 6-5Table 6-2. Average Receipts for Affected Industryby Enterprise: 2009 ($2008 Million/establishment)SBA SizeStandardfor Businesses(effectiveNovember 5,2010)Owned By Enterprises with Employee Range:NAICS NAICS DescriptionAllEnterprises1–20Employees20–99Employees100–499Employees500+Employees211111 Crude petroleum &natural gas extraction500 employees $30.22 $2.15 $33.02 $151,76 1,570211112 Natural gas liquidextraction500 employees $172.81 $0.30 NA $11.88 NA335312 Motor & generator mfg 1,000 employees $18.58 $1.37 $6.14 $15.96 $29.47333992 Welding & solderingequipment mfg500 employees $18.51 $1.56 $6.60 $33.25 NA .NA = Not available.Source: U.S. Census Bureau. 2012a. “Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail Employment Sizes: 2009.”<http://www.census.gov/csd/susb/ Downloaded 2/22/12.

### 6-6Table 6-3. Average Receipts for Affected Industry byEnterprise Receipt Range: 2007 ($2008 /establishment)SBA Size Standardfor Businesses(effective November5, 2010)Owned By Enterprises with Receipt Range:NAICS NAICS DescriptionAllEnterprises0–99KReceipts100–499.9KReceipts500–999.9KReceipts1,000–4,999.9KReceipts5,000,000–9,999,999KReceipts<10,000KReceipts10,000–49,999KReceipts50,000–99,999KReceipts100,000K+Receipts2211 Electric PowerGenerationa$261.0 $31.2 $272.5 $724.9 $2,399.5 $7,330.5 $2,617.7 $24,786.9$67,706.8$1,394,051.0622110 Hospitals$34.5 million in annualreceipts$202,058.7 NA $23.82 NA $3,255.0 $7,291.0 $4,692.1$23,481.9$67,545,6$508,705.8237310Highway , street, andbride construction$33.5 million inAnnual Receipts$7.74$0.06$0.32$0.84$2.74$8.11$2.00$22.62$56.48$56.81237110Water and sewer lineand related structures,construction$33.5 million inAnnual Receipts$3.89$0.06$0.32$0.85$2.73$8.17$1.84$20.62$45.05$47.27237130Powerandcommunicationline and relatedstructures construction$33.5 million inAnnual Receipts$3.39$0.06$0.31$0.83$2.52$7.75$1.32$16.84$34.50$23.86237990zOther heavy andcivil engineeringconstruction$33.5 million inAnnual Receipts$2.66$0.06$0.30$0.83$2.48$7.76$0.99$18.72$40.53$42.3592811 National Security NA NA NA NA NA NA NA NA NA NA NANotes: . National Security is included in this table but does not have size standards.aNAICS codes 221111, 221112, 221113, 221119, 221121, 221122: A firm in these industries is defined as small by SBA if, including its affiliates, it isprimarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did notexceed 4 million megawatt hours.NA = Not available. SUSB did not report thisdata for disclosure or other reasons.Source: U.S. Census Bureau. 2009a. “Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail Employment Sizes: 2009.”<http://www.census.gov/csd/susb/6-7 Annual entity compliance costs vary depending on the size of the diesel engines used at the affected establishment. Absent facility-specific information, we computed per-entity compliance costs based for three different cases based on representative establishments—Cases 1, 2, and 3 (see Table 6-4). Each representative establishment differs based on the size and number of diesel engines being used. Compliance costs are calculated by summing the total annualized compliance costs for the relevant engine categories, dividing the sum by the total existing population of those engines, and multiplying the average engine cost by the number of engines assumed to be at the establishment. Since NAICS 2211 and 622110 are fundamentally different than other industries considered in this analysis, we used different assumptions about what constitutes the representative establishmen t and report these assumptions separately.

 Case 1: The representative establishment for all industries uses three 750+ hp engines with an average compliance cost of $1,878 per engine, resulting in a total annualized compliance cost of approximately $5,634 for this representative establishment.

 Case 2: The representative establishment in NACIS 2211 and 622110 uses two 50 to 750+ hp engines with an average compliance cost of $419 per engine, resulting in a total annualized compliance cost of $838 for this representative establishment. For all other industries, the representative establishm ent uses two 50 to 300 hp engines with an average compliance cost of $146 per engine, resulting in a total compliance cost of $292 for this representative establishment.

 Case 3: The representative establishment for all industries uses two 50 to 100 hp engines with an average compliance cost of $68 per engine, resulting in a total compliance cost of $137 for this representative establishment. EPA believes that small entities are most likely to face costs similar to Case 2 (columns shaded in gray in Table 6-4) because most of the engines to be affected by this proposal in NAICS 335312, 333992, 211111, and 211112 are under 300 hp capacity, and most small entities in these industries will own engines of this size or smaller. This is corroborated by Figure 6-1 and 6-2 which shows the distribution of engine population and compliance costs by engine size for all industries. However, it is difficult to make a similar claim for NAICS 2211 and 622110 based on the existing distribution of engines in these industries. 6 As noted earlier in the RIA, only 20 percent of the existing distribution of engines is expected to be classified as nonemergency.

6 This claim also cannot be made for NAICS 92811: Natio nal Security. However, since most national security installations are owned by the federal government (e.g., military bases), EPA assumes these entities would not be considered small.6-8 For the sales test, we divided the represen tative establishment compliance costs reported in Table 6-4 by the representative receipts reported in Tables 6-2 and 6-3. This is known as the cost-to-receipt (i.e., sales) ratio, or the “sal es test.” The “sales test” is the impact Table 6-4. Representative Establishment Costs Used for Small Entity Analysis ($2008)

Case 1 Case 2 Case 3 NAICS 2211,

622110 (+750 hp

only) All Other NAICS (+750 hp

only) NAICS 2211, 622110 (50–750+ hp) All Other NAICS (50–300 hp) NAICS 2211, 622110 (50–100 hp

only) All Other NAICS (50–100 hp

only) Total Annualized Costs ($) $62,068,406 $7,875,707 $304,817,985 $40,407,406 $9,093,118 $6,745,516 Engine Population 33,052 4,194 727,090 276,374 133,099 98,736 Average Engine Cost ($/engine) $1,878 $1,878 $419 $146 $68 $68

Assumed Engines Per Establishment 3 3 2 2 2 2

Total Annualized Costs per Establishment $5,634 $5,634 $838 $292 $137 $137

* Engine population estimates taken from “Impacts Associ ated with NESHAP for Existing Stationary CI RICE,”

prepared by Bradley Nelson, EC/R, Inc. for Melanie King, U.S. EPA, Office of Air Quality Planning and Standards, February 19, 2010.6-9 Figure 6-1. Distribution of Engine Po pulation by Size for All Industries 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Electric Power Generation

(2211) Hospitals (622110) Crude Petroleum & NG Production

(211111) Natural Gas Liquid Producers

(211112) National Security (92811) Hydro Power Units (335312) Irrigation Sets (335312) Welders (333992) >750 hp 600

‐ 750 hp 300

‐ 600 hp 175

‐ 300 hp 100

‐ 175 hp 50

‐ 100 hp6-10 Figure 6-2. Distribution of Compliance Costs by Engine Size for All Industries

methodology EPA employs in analyzing small entity impacts as opposed to a “profits test,” in which annualized compliance costs are calculated as a share of profits. This is because revenues or sales data are commonly available data for entities normally impacted by EPA regulations and profits data normally made available are often not the true profit earned by firms because of accounting and tax considerations. Revenues as typically published are usually correct figures and are more reliably reported when compared to profit data. The use of a “sales test” for estimating small business impacts for a rulemaking such as this one is consistent with guidance offe red by EPA on compliance with SBREFA 7 and is consistent with guidance published by the U.S. SBA’s Office of Advocacy that suggests that cost as a

7 The SBREFA compliance guidance to EPA ru lewriters regarding the types of small business analysis that should be considered can be found at http://www.epa.gov/sbre fa/documents/rfafinalguidance06.pdf, pp. 24-25. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Electric Power Generation

(2211) Hospitals (622110) Crude Petroleum & NG Production

(211111) Natural Gas Liquid Producers

(211112) National Security (92811) Hydro Power Units (335312) Irrigation Sets (335312) Welders (333992) >750 hp 600

‐ 750 hp 300

‐ 600 hp 175

‐ 300 hp 100

‐ 175 hp 50

‐ 100 hp6-11 percentage of total revenues is a metric for evaluating cost increases on small entities in relation to increases on large entities. 8 If the cost-to-receipt ratio is less than 1%, th en we consider the final rule to not have a significant impact on the establishment company in question. We summarize the industries with cost-to-receipt ratios exceeding 1% below: Primary Analysis:

 Case 2 : NAICS 2211

 Case 3 : No industries Sensitivity Analysis (unlikely):

 Case 1 : NAICS 211111, 211112, with less than 20 employees, NAICS 2211 with receipts less than $500,000 per year, NAICS 234 with receipts less than $500,000 per year, and irrigated farms with receipts of $500,000 or less per year In the Case 2 primary analysis, only establishments in NAICS 2211 with receipts less than $100,000 per year have cost-to-receipt ratios above 1%. These establishments represent less than 5 percent of affected small establishments. However, establishments earning this level of receipts are likely to be using smaller engines than those assumed in Case 2, such as 50 to 100 hp engines. The results of our Case 3 analysis demonstrate that these establishments are not significantly impacted when taking this engine size into account. After considering the economic impacts of this proposed rule on small entities, we certify that this action will not have a significant economic impact on a substantial number of small entities. This certification is based on the economi c impact of this proposal action to all affected small entities across all industries affected. The percentage of small entities impacted by this proposal having annualized costs greater than 1 percent of sales is less than 2 percent according to this analysis. We thus conclude that there is no significant economic impact on a substantial number of small entities (SISNO SE) for this proposed rule. Although the proposed rule would not have a significant economic impact on a substantial number of small entities, EPA nonetheless tried to reduce the impact of the rule on small entities. When developing the revised standa rds, EPA took special steps to ensure that the burdens imposed on small entities were minimal. EPA conducted several meetings with industry

8 U.S. SBA, Office of Advocacy. A Guide for Governme nt Agencies, How to Comply with the Regulatory Flexibility Act, Implementing the President’s Small Business Agenda and Executive Order 13272, May 2003.6-12 trade associations to discuss regulatory options and the corresponding burden on industry, such as recordkeeping and reporting. In addition, as mentioned earlier in this preamble, EPA proposes to reduce regulatory requirements for a variety of area sources affected under this RICE rule with amendments to the final RICE rules promulgated in 2010. We continue to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

6.3 Small Government Entities The rule also covers sectors that include entities owned by small and large governments. However, given the uncertainty and data li mitations associated with identifying and appropriately classifying these entities, we co mputed a “revenue” test for a model small government, where the annualized compliance cost is a percentage of annual government revenues (U.S. Census, 2005a,b). The use of a “revenue test” for estimating impacts to small governments for a rulemaking such as this one is consistent with guidance offered by EPA on compliance with SBREFA, 9 and is consistent with guidance published by the US SBA’s Office of Advocacy. 10 For example, from the 2002 Census (in 2008 dollars), the average revenue for small governments (counties and municipalities) with populations fewer than 10,000 are $3 million per entity, and the average revenue for local governments with populations fewer than 50,000 is $8 million per entity. For the smallest group of local governments (<10,000 people), the cost-to-revenue ratio would be 0.2% or less under each case. For the larger group of governments (<50,000 people), the cost-to-revenue ratio is 0.1% or less under all cases.

9 The SBREFA compliance guidance to EPA rule writers rega rding the types of small business analysis that should be considered can be found at http://www.epa.gov/sbrefa/docum ents/rfafinalguidance06.pdf , pp. 24-25. 10 U.S. SBA, Office of Advocacy. A Guide for Government Agencies, How to Comply with the Regulatory Flexibility Act, Implementing the President’s Small Business Agenda and Executive Order 13272, May 2003.7-1 SECTION 7 HUMAN HEALTH BENEFITS OF EMISSIONS REDUCTIONS Synopsis

Implementation of emissions controls required by the proposed CI RICE NESHAP reconsideration is expected to reduce emissions of hazardous air pollutants (HAP) and have ancillary co-benefits that would lower ambient concentrations of PM 2.5 and ozone. In this section, we quantify the monetized co-benefits for this rule associated with reducing exposure to ambient fine particulate matter (PM 2.5 ) by reducing emissions of precursors. We estimate the total monetized co-benefits to be $770 million to $1.9 billion at a 3% discount rate and $690 million to $1.7 billion at a 7% discount rate in 2013. All estimates are in 2010$. These estimates reflect the monetized human health benefits of reducing cases of morbidity and premature mortality among populations exposed to PM 2.5 reduced by this rule. These estimates reflect EPA’s most current interpretation of the scientific literatur e. Higher or lower estimates of benefits are possible using other assumptions; examples of this are provided in Figure 7-2. Data, resource, and methodological limitations prevented EP A from monetizing the benefits from several important benefit categories, including benefits from reducing exposure to HAP, carbon monoxide, and ozone, as well as visibility impairment. In addition to reducing emissions of PM precursors, this rule would reduce 1,000 tons of HAP and 14,000 tons of carbon monoxide each year. 7.1 Calculation of PM 2.5 -Related Human Health Co-Benefits

This proposed reconsideration would reduce emissions of directly emitted particles and VOCs. Because these emissions are precursors to PM 2.5, reducing these emissions would also reduce PM 2.5 formation, human exposure and the incidence of PM 2.5 -related health effects. Due to analytical limitations, it was not possible to provide a comprehensive estimate of PM 2.5 -related benefits or provide estimates of the health bene fits associated with exposure to HAP, CO, or ozone. Instead, we used the “benefit-per-ton” approach to estimate these benefits. The methodology employed in this analysis is simila r to the work described in Fann, Fulcher, and Hubbell (2009), but represents an improvement that EPA believes would provide more reliable estimates of PM 2.5 -related health benefits for emissions reductions in specific sectors. The key assumptions are described in detail below. These PM 2.5 benefit-per-ton estimates provide the total monetized human health benefits (the sum of premature mortality and premature morbidity) of reducing one ton of PM 2.5 from a specified source. EPA has used the benefit per-ton technique in several previous RIAs, including the recent SO 2 NAAQS RIA (U.S. EPA, 2010).7-2 The Integrated Science Assessment (ISA) for Particulate Matter (U.S. EPA, 2009b) identified the human health effects associated with ambient PM 2.5, which include premature morality and a variety of morbidity effects associated with acute and chronic exposures. Table 7- 1 shows the quantified and unquantified benefits captured in those benefit-per-ton estimates, but this table does not include entries for the unquantif ied health effects associated with exposure to HAP, CO, or ozone nor welfare effects such visibility impairment that are described in section 7.2. It is important to emphasize that the list of unquantified benefit categories is not exhaustive, nor is quantification of each effect complete.7-3 Table 7-1: Human Health Effects of PM 2.5

Category Specific Effect Effect Has Been Quantified Effect Has Been Monetized More Information

(refers to CSAPR RIA) Improved Human Health Reduced incidence of premature mortality from exposure to PM 2.5 Adult premature mortality based on cohort study estimates and expert elicitation estimates (age >25 or age >30)   Section 5.4 Infant mortality (age <1)   Section 5.4

Reduced incidence of morbidity from exposure to PM 2.5 Non-fatal heart attacks (age > 18)   Section 5.4 Hospital admissions—respiratory (all ages)   Section 5.4 Hospital admissions—cardiovascular (age >20)   Section 5.4 Emergency room visits for asthma (all ages)   Section 5.4 Acute bronchitis (age 8-12)   Section 5.4 Lower respiratory symptoms (age 7-14)   Section 5.4 Upper respiratory symptoms (asthmatics age 9-11)   Section 5.4 Asthma exacerbation (asthmatics age 6- 18)   Section 5.4 Lost work days (age 18-65)   Section 5.4 Minor restricted-activity days (age 18-65)   Section 5.4 Chronic Bronchitis (age >26)   Section 5.4 Emergency room visits for cardiovascular effects (all ages) -- -- Section 5.4 Strokes and cerebrovasc ular disease (age 50-79) -- -- Section 5.4 Other cardiovascular effects (e.g., other ages) -- -- PM ISA 2 Other respiratory effects (e.g., pulmonaryfunction, non-asthma ER visits, nonbronchitis chronic diseases, other ages and populations) -- -- PM ISA 2

Reproductive and developmental effects (e.g., low birth weight, pre-term births, etc) -- -- PM ISA 2,3 Cancer, mutagenicity, and genotoxicity effects -- -- PM ISA 2,3

1 We assess these benefits qualitatively due to time and resource limitations for this analysis. 2 We assess these benefits qualitatively because we do not have sufficient confidence in available data or methods. 3 We assess these benefits qualitatively because current ev idence is only suggestive of causality or there are other significant concerns over the strength of the association.

Consistent with the Portland Cement NESHAP (U.S. EPA, 2009a), the benefits estimates utilize the concentration-response functions as reported in the epidemiology literature, as well as the 12 functions obtained in EPA’s expert elicitation study as a sensitivity analysis.7-4  One estimate is based on the concentration-response (C-R) function developed from the extended analysis of American Cancer Society (ACS) cohort, as reported in Pope et al. (2002), a study that EPA has previously used to generate its primary benefits estimate. When calculating the estimate , EPA applied the effect coefficient as reported in the study without an adjustment for assumed concentration threshold of 10 μg/m 3 as was done in recent (2006-2009) Office of Air and Radiation RIAs.

 One estimate is based on the C-R function developed from the extended analysis of the Harvard Six Cities cohort, as reported by Laden et al (2006). This study, published after the completion of the Staff Paper for the 2006 PM 2.5 NAAQS, has been used as an alternative estimate in the PM 2.5 NAAQS RIA and PM 2.5 benefits estimates in RIAs completed since the PM 2.5 NAAQS. When calculating the estimate, EPA applied the effect coefficient as reported in the study without an adjustment for assumed concentration threshold of 10 μg/m 3 as was done in recent (2006-2009) RIAs.

 Twelve estimates are based on the C-R functions from EPA’s expert elicitation study (Roman et al., 2008) on the PM 2.5 -mortality relationship and interpreted for benefits analysis in EPA’s final RIA for the PM 2.5 NAAQS. For that study, twelve experts (labeled A through L) provided independent estimates of the PM 2.5 -mortality concentration-response function. EPA pr actice has been to develop independent estimates of PM 2.5 -mortality estimates corresponding to the concentration-response function provided by each of the twelve experts, to better characterize the degree of variability in the expert responses.

The effect coefficients are drawn from epidemiology studies examining two large population cohorts: the American Cancer Society cohort (Pope et al., 2002) and the Harvard Six Cities cohort (Laden et al., 2006). 1 These are logical choices for anchor points in our presentation because, while both studies are well designed and peer reviewed, there are strengths and weaknesses inherent in each, which we believe argues for using both studies to generate benefits estimates. Previously, EPA had calculated benefits based on these two empirical studies, but derived the range of benefits, including the minimum and maximum results, from an expert elicitation of the rela tionship between exposure to PM 2.5 and premature mortality (Roman

1 These two studies specify multi-pollutant models that control for SO 2 , among other co-pollutants.7-5 et al., 2008). 2 Within this assessment, we include the benefits estimates derived from the concentration-response function provided by each of the twelve experts to better characterize the uncertainty in the concentration-response function for mortality and the degree of variability in the expert responses. Because the experts used these cohort studies to inform their concentration-response functions, benefits estima tes using these functions generally fall between results using these epidemiology studies (see Figure 7-2). In general, the expert elicitation results support the conclusion that the benefits of PM 2.5 control are very likely to be substantial.

Readers interested in reviewing the general methodology for creating the benefit-per-ton estimates used in this analysis should consu lt the draft Technical Support Document (TSD) on estimating the benefits per ton of reducing PM 2.5 and its precursors in the “Other Non-EGU Point” category (U.S. EPA, 2012). 3 The primary difference between the estimates used in this analysis and the estimates reported in Fann, Fulcher, and Hubbell (2009) is the air quality modeling data utilized. In this analysis, we apply these national benefit-per-ton estimates calculated for this category for directly emitted particles and multiply them by the corresponding emission reductions.

These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. Directly emitted particles are the primary PM 2.5 precursors affected by this rule. Even though we assume that all fine particles have equivalent health effects, the benefit-per-ton estimates vary between precursors depending on the location and magnitude of their impact on PM 2.5 levels, which drive population exposure. The sector-specific modeling does not provide estimates of the PM 2.5 -related benefits associated with reducing VOC emissions, but these unquantified benefits are generally small compared to other PM 2.5 precursors (U.S. EPA, 2012). The benefit-per-ton coefficients in this analysis were derived using modified versions of the health impact functions used in the PM NAAQS Regulatory Impact Analysis (U.S. EPA, 2006). Specifically, this analysis uses the method first applied in the Portland Cement NESHAP

2 Please see the Section 5.2 of the Portland Cement RIA in Appendix 5A for more information regarding the change in the presentation of benefits estimates. 3 Stationary engines are included in the other non-EGU point source category. If the affected stationary engines are more rural than the average of the non-EGU sources modeled, then it is possible that the benefits may be somewhat less than we have estimated here. The TSD provides the geographic distribution of the air quality changes associated with this sector. It is important to emphasize that this modeling represents the best available information on the air quality impact on a per ton basis for these sources.7-6 RIA (U.S. EPA, 2009a), which applied the functions directly from the epidemiology studies without an adjustment for an assumed threshold. Removing the threshold assumption is a key difference between the method used in this analysis of PM benefits and the methods used in RIAs prior to Portland Cement proposal, and we now calculate incremental benefits down to the lowest modeled PM 2.5 air quality levels. 4

Based on our review of the current body of scientific literature, EPA now estimates PMrelated mortality without applying an assumed concentration threshold. EPA’s Integrated Science Assessment for Particulate Matter (U.S. EPA, 2009b), which was reviewed by EPA’s Clean Air Scientific Advisory Committee (U.S . EPA-SAB, 2009a; U.S. EPA-SAB, 2009b), concluded that the scientific literature consiste ntly finds that a no-threshold log-linear model most adequately portrays the PM-mortality concentration-response relationship while recognizing potential uncertainty about the exact shape of the concentration-response function. Consistent with this finding, we have conformed the previous threshold sensitivity analysis to the current state of the PM science by incorporating a “Lowest Measured Level” (LML) assessment, which is a method EPA has employed in several recent RIAs including the Cross-State Air Pollution Rule (U.S. EPA, 2011b). This information allows readers to determine the portion of population exposed to annual mean PM 2.5 levels at or above the LML of each study; in general, our confidence in the estimated PM mortality decreases as we consider air quality levels further below the LML in major coho rt studies that estimate PM-related mortality. While an LML assessment provides some insight in to the level of uncertainty in the estimatedPM mortality benefits, EPA does not view the LML as a threshold and continues to quantify PMrelated mortality impacts using a full range of mode led air quality concentrations. It is important to emphasize that we have high confidence in PM 2.5 -related effects down to the lowest LML of the major cohort studies, which is 5.8 μg/m 3 . Just because we have greater confidence in the benefits above the LML, this does not mean that we have no confidence that benefits occur below the LML. For a summary of the scientific review statements regarding the lack of a threshold in the PM 2.5 -mortality relationship, see the T echnical Support Document (TSD) entitled Summary of Expert Opinions on the Existe nce of a Threshold in the ConcentrationResponse Function for PM 2.5 -related Mortality (U.S. EPA, 2010b). For this analysis, policy-specific air quality data is not available due to time or resource limitations. For these rules, we are unable to estimate the percentage of premature mortality associated with this specific rule ’s emission reductions at each PM 2.5 level. However, we believe

4 Additional updates since the Cement RIA include a revised VSL and updated baseline incidence rates.7-7 that it is still important to characterize the distri bution of exposure to baseline air quality levels. As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the source apportionmen t modeling used to calculate the benefit-per-ton estimates for this sector. It is im portant to note that baseline exposure is only one parameter in the health impact function, alon g with baseline incidence rates population, and change in air quality. In other words, the percentage of the population exposed to air pollution below the LML is not the same as the percentage of the population experiencing health impacts as a result of a specific emission reduction policy. The most important aspect, which we are unable to quantify for rules without rule-specific air quality modeling, is the shift in exposure associated with this specific rule. Therefore, caution is warranted when interpreting the LML assessment for this rule. The results of this analysis are provided in Section 7.3. As is the nature of RIAs, the assumptions and methods used to estimate air quality benefits evolve over time to reflect the Agency’s most current interpretation of the scientific and economic literature. For a period of time (2004-2008), the Office of Air and Radiation (OAR) valued mortality risk reductions using a value of statistical life (VSL) estimate derived from a limited analysis of some of the available studi es. OAR arrived at a VSL using a range of $1 million to $10 million (2000$) consistent with tw o meta-analyses of the wage-risk literature. The $1 million value represented the lower end of the interquartile range from the Mrozek and Taylor (2002) meta-analysis of 33 studies. The $10 million value represented the upper end of the interquartile range from the Viscusi and Aldy (2003) meta-analysis of 43 studies. The mean estimate of $5.5 million (2000$) 5 was also consistent with the mean VSL of $5.4 million estimated in the Kochi et al. (2006) meta-analy sis. However, the Agency neither changed its official guidance on the use of VSL in rulemakings nor subjected the interim estimate to a scientific peer-review process through the Scie nce Advisory Board (SAB) or other peer-review group. During this time, the Agency continued work to update its guidance on valuing mortality risk reductions, including commissioning a repo rt from meta-analytic experts to evaluate methodological questions raised by EPA and the SAB on combining estimates from the various data sources. In addition, the Agency consulted several times with the Science Advisory Board Environmental Economics Advisory Committee (SAB-EEAC) on the issue. With input from the meta-analytic experts, the SAB-EEAC advised the Agency to update its guidance using specific, appropriate meta-analytic techniques to combine estimates from unique data sources and

5 After adjusting the VSL for a different currency year (2010$) and to account for income growth to 2015 of the $5.5

million value, the VSL is $8.0 million.7-8 different studies, including those using differe nt methodologies (i.e., wage-risk and stated preference) (U.S. EPA-SAB, 2007).

Until updated guidance is available, the Agency determined that a single, peer-reviewed estimate applied consistently best reflects the SAB-EEAC advice it has received. Therefore, the Agency has decided to apply the VSL that was vetted and endorsed by the SAB in the Guidelines for Preparing Economic Analyses (U.S. EPA, 2000) 6 while the Agency continues its efforts to update its guidance on this issue. This approach calculates a mean value across VSL estimates derived from 26 labor market and contingent valuation studies published between 1974 and 1991. The mean VSL across thes e studies is $6.3 million (2000$). 7 The Agency is committed to using scientifically sound, appropriately reviewed evidence in valuing mortality risk reductions and has made significant progress in responding to the SAB-EEAC’s specific recommendations.

In implementing these rules, emission controls may lead to reductions in ambient PM 2.5 below the National Ambient Air Quality Standards (NAAQS) for PM in some areas and assist other areas with attaining the PM NAAQS. Be cause the PM NAAQS RIAs also calculate PM benefits, there are important differences worth noting in the design and analytical objectives of each RIA. The NAAQS RIAs illustrate the potential costs and benefits of attaining a new air quality standard nationwide based on an array of emission control strategies for different sources. In short, NAAQS RIAs hypothesize, but do not pr edict, the control strategies that States may choose to enact when implementing a NAAQS. Th e setting of a NAAQS does not directly result in costs or benefits, and as such, the NAAQS RIAs are merely illustrative and are not intended to be added to the costs and benefits of other regulations that result in specific costs of control and emission reductions. However, some costs and benefits estimated in this RIA account for the same air quality improvements as estimated in the illustrative PM 2.5 NAAQS RIA. By contrast, the emission reductions for implementation rules are from a specific class of well-characterized sources. In general, EPA is more confident in the magnitude and location of the emission reductions for implementation rule s rather than illustrative NAAQS analyses. Emission reductions achieved under these and other promulgated rules will ultimately be reflected in the baseline of future NAAQS analyses, which would reduce the incremental costs

6 In revised Economic Guidelines (U.S. EPA, 2010c), EPA retained the VSL endorsed by the SAB with the understanding that further updates to the mortality risk va luation guidance would be forthcoming in the near future. Therefore, this report does not re present final agency policy. 7 This value is $4.8 million in 1990$. In this analysis, we adjust the VSL to account for a different currency year ($2010) and to account for inco me growth to 2015. After applying these adjustments to the $6.3 million value, the VSL is $9.2 million.7-9 and benefits associated with attaining the NAAQS. EPA remains forwar d looking towards the next iteration of the 5-year review cycle for the NAAQS, and as a result does not issue updated RIAs for existing NAAQS that retroactively update the baseline for NAAQS implementation. For more information on the relationship between the NAAQS and rules such as analyzed here, please see Section 1.2.4 of the SO 2 NAAQS RIA (U.S. EPA, 2010a).7-10 Figure 7.1 illustrates the relative breakdown of the monetized PM 2.5 health benefits.

Figure 7-1: Breakdown of Monetized PM 2.5 Health Benefits using Mortality Function from Pope et al. (2002)* *This pie chart breakdown is illustrative, using the results based on Pope et al. (2002) as an example. Using the Laden et al. (2006) function for premature mortality, the percentage of total monetized benefits due to adult mortality would be 97%. This chart shows the breakdown us ing a 3% discount rate, and the results would be similar if a 7% discount rate was used. Table 7-2 provides a general summary of the monetized PM-related health benefits by precursor, including the emission reductions and benefit-per-ton estimates at discount rates of 3% and 7%. 8 Table 7-3 provides a summary of the reductions in health incidences as a result of the pollution reductions. In Table 7-4, we provide the benefits using our anchor points of Pope et al. and Laden et al. as well as the results from the expert elicitation on PM mortality. Figure 7-2 provides a visual representation of the range of PM 2.5 -related benefits estimates using

8 To comply with Circular A-4, EPA provides monetized be nefits using discount rates of 3% and 7% (OMB, 2003). These benefits are estimated for a specific analysis year (i.e., 2013), and most of the PM benefits occur within that year with two exceptions: acute myocardial infa rctions (AMIs) and premature mortality. For AMIs, we assume 5 years of follow-up medical costs and lost wage s. For premature mortality, we assume that there is a “cessation” lag between PM exposures and the total rea lization of changes in health effects. Although the structure of the lag is uncertain, EPA follows the advice of the SAB-HES to assume a segmented lag structure characterized by 30% of mortality reductions in the first year, 50% over years 2 to 5, and 20% over the years 6 to 20 after the reduction in PM 2.5 (U.S. EPA-SAB, 2004). Changes in the lag assumptions do not change the total number of estimated deaths but rather the timing of t hose deaths. Therefore, discounting only affects the AMI costs after the analysis year and the va luation of premature mortalities that o ccur after the analys is year. As such, the monetized benefits using a 7% discount rate are onl y approximately 10% less than the monetized benefits using a 3% discount rate.

Adult Mortality ‐ Pope et al. 93% Chronic Bronchitis 4% AMI 2% Acute Respiratory Symptoms 0.5%

Infant Mortality 0.4%

Work Loss Days 0.2%

Hospital Admissions, Cardio 0.2% Hospital Admissions, Resp 0.04% Asthma Exacerbation 0.01% Acute Bronchitis 0.01% Upper Resp Symp 0.00% Lower Resp Symp 0.00% ER Visits, Resp 0.00% Other 1%7-11 concentration-response functions supplied by experts. Figure 7-3 shows a breakdown of monetized benefits by engine size.

The benefit-per-ton estimates shown in this RIA are different than the benefit-per-ton estimates cited in the 2010 final SI RICE RIA fo r two reasons. First, these estimates are basedon updated air quality modeling, which results in slightly higher benefits per ton for other nonEGU point sources than the previous modeling. Second, these estimates have been inflated to 2010$. Third, the new air quality modeling did not provide estimates associated with reducing VOCs.

Table 7-2: General Summary of Monetized PM 2.5 -Related Health Co-Benefits Estimates for the Proposed CI RICE NESHAP Reconsideration (millions of 2010$) *

Pollutant Emissions Reductions

(tons) Benefit per ton (Pope, 3%) Benefit per ton (Laden,

3%) Benefit per ton (Pope, 7%) Benefit per ton (Laden,

7%) Total Monetized Benefits (millions of 2010$ at 3%) Total Monetized Benefits (millions of 2010$ at 7%)

PM 2.5 Precursors Direct PM 2.5 2,818 $270,000 $670,000 $240,000 $610,000 $770 to $1,900 $690 to $1,700

Total $770 to $1,900 $690 to $1,700

* All estimates are for the analysis year (2013), and are rounded to two significant figures so numbers may not sum across columns. It is important to note that the monetized benefits do not include reduced health effects from direct exposure to NO 2 , ozone exposure, ecosystem effects, or visibility im pairment. All fine partic les are assumed to have equivalent health effects, but the benefit per ton estimate s vary because each ton of precu rsor reduced has a different propensity to form PM 2.5 . The monetized benefits incorporate the conversion from precursor emissions to ambient fine particles. Confidence intervals are unavailable for this analysis because of the benefit-per-ton methodology.7-12 Table 7-3: Summary of Reductions in Health Incidences from PM 2.5- Related Co-Benefits for Proposed CI RICE NESHAP Reconsideration*

Avoided Premature Mortality

Pope et al. 85 Laden et al. 220 Avoided Morbidity

Chronic Bronchitis 59 Emergency Department Visits, Respiratory 66 Hospital Admissions, Respiratory 16 Hospital Admissions, Cardiovascular 35 Acute Bronchitis 130 Lower Respiratory 1,700 Upper Respiratory 1,300 Minor Restricted Activity Days 68,000 Work Loss Days 12,000 Asthma Exacerbation 2,800 Acute Myocardial Infarction 94 * All estimates are for the analysis year (2013) and are rounded to whole numbers with two significant figures. All fine particles are assumed to have equivalent health effects because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type . Confidence intervals are unavailable for this analysis because of the benefit-per-ton methodology.7-13 Table 7-4: All PM 2.5 Co-Benefits Estimates for the Proposed CI RICE NESHAP Reconsideration at discount rates of 3% and 7% in 2013 (in millions of 2010$)*

3% 7% Benefit-per-ton Coefficients Derived from Epidemiology Literature

Pope et al. $770 $690 Laden et al. $1,900 $1,700 Benefit-per-ton Coefficients Derived from Expert Elicitation

Expert A $2,000 $1,800 Expert B $1,500 $1,400 Expert C $1,500 $1,400 Expert D $1,100 $970 Expert E $2,500 $2,200 Expert F $1,400 $1,200 Expert G $920 $820 Expert H $1,200 $1,000 Expert I $1,500 $1,400 Expert J $1,200 $1,100 Expert K $290 $260 Expert L $1,000 $910

* All estimates are rounded to two significant figures. The be nefits estimates from the Expert Elicitation are provided as a reasonable characterization of the uncertainty in th e mortality estimates associated with the concentrationresponse function. Confidence intervals are unavailable fo r this analysis because of the benefit-per-ton methodology7-14 Figure 7-2: Total Monetized PM 2.5 Co-Benefits of Proposed CI RICE NESHAP Reconsideration in 2013 *This graph shows the estimated benefits at discount rates of 3% and 7% using effect coefficients derived from the Pope et al. study and the Laden et al study, as well as 12 effect coefficients derived fr om EPA’s expert elicitation on PM mortality. The results shown are not the direct results fro m the studies or expert elicitation; rather, the estimates are based in part on the concentration-response function provided in those studies. $0 $500 $1,000 $1,500 $2,000 $2,500

Pope et al. Laden et al.Millions(2010$)

PM 2.5 mortality benefits estimates derived from 2 epidemiology functions and 12 expert functions 3% DR 7% DR7-15 Figure 7-3: Breakdown of Total Monetized PM 2.5 Co-Benefits of Proposed CI RICE NESHAP Reconsideration by Engine Size

7.2 Unquantified Benefits The monetized benefits estimated in this RIA only reflect a subset of benefits attributable to the health effect reductions associated with ambient fine particles. Data, time, and resource limitations prevented EPA from quantifying the impacts to, or monetizing the benefits from several important benefit categories, including benefits from reducing exposure to HAP, CO, and ozone exposure, as well as ecosystem effects, and visibility impairment. This does not imply that there are no benefits associated with these emission reductions. These benefits are described qualitatively in this section. 7.2.1 HAP Benefits Even though emissions of air toxics from all sources in the U.S. declined by approximately 42% since 1990, the 2005 National-Scale Air Toxi cs Assessment (NATA) predicts that most Americans are exposed to ambient concentrations of air toxics at levels that have the potential to cause adverse health effects (U.S. EPA, 2011c). 9 The levels of air toxics to which people are exposed vary depending on where people live and work and the kinds of activities in which they engage. In order to identify and prioritize air toxics, emission source types and locations that are

9 The 2005 NATA is available on the Internet at http://www.epa.gov/ttn/atw/nata2005/. Major <500 HP 25%

Major >500 HP 6%

Area <600 HP 36% Area >600 HP 33%7-16 of greatest potential concern, U.S. EPA conducts the NATA. 10 The most recent NATA was conducted for calendar year 2005 and was released in March 2011. NATA includes four steps: 1) Compiling a national emissions inventory of air toxics emissions from outdoor sources 2) Estimating ambient and exposure concentrations of air toxics across the United States 3) Estimating population exposures across the United States 4) Characterizing potential public health risk due to inhalation of air toxics including both cancer and noncancer effects Based on the 2005 NATA, EPA estimates that about 5% of census tracts nationwide have increased cancer risks greater than 100 in a million. The average national cancer risk is about 50 in a million. Nationwide, the ke y pollutants that contribute most to the overall cancer risks are formaldehyde and benzene. 11 Secondary formation (e.g., formaldehyde forming from other emitted pollutants) was the largest contributor to cancer risks, while stationary, mobile and background sources contribute almost equal portions of the remaining cancer risk. Noncancer health effects can result from chronic, 12 subchronic, 13 or acute 14 inhalation exposures to air toxics, and include neurological , cardiovascular, liver, kidney, and respiratory effects as well as effects on the immune and reproductive systems. According to the 2005 NATA, about three-fourths of the U.S. population was exposed to an average chronic concentration of air toxics that has the potential for adverse noncancer respiratory health effects. Results from the 2005 NATA indicate that acrolein is the primary driver for noncancer respiratory risk.

10 The NATA modeling framework has a number of limitations that prevent its use as the sole basis for setting regulatory standards. These limitations and uncertaintie s are discussed on the 2005 NATA website. Even so, this modeling framework is very useful in identifying air toxic pollutants and sources of greatest concern, setting regulatory priorities, and informing the decision making process. U.S. EPA. (2011) 2005 National-Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata2005/ 11 Details about the overall confidence of certainty ranking of the individual pieces of NATA assessments including both quantitative (e.g., model-to-moni tor ratios) and qualitative (e.g., quality of data, review of emission inventories) judgments can be found at ht tp://www.epa.gov/ttn/atw/nata/roy/page16.html. 12 Chronic exposure is defined in the glossary of the Integrated Risk Information (IRIS) database (http://www.epa.gov/iris) as repeated exposure by th e oral, dermal, or inhalation route for more than approximately 10% of the life span in humans (more than approximately 90 days to 2 years in typically used laboratory animal species). 13 Defined in the IRIS database as repeated exposure by the oral, dermal, or inhalation route for more than 30 days, up to approximately 10% of the life span in humans (more than 30 days up to approximately 90 days in typically used laboratory animal species). 14 Defined in the IRIS database as exposure by the or al, dermal, or inhalation route for 24 hours or less.7-17 Figure 7-4 and Figure 7-5 depict the estimated census tract-level carcinogenic risk and noncancer respiratory hazard from the assessment. It is important to note that large reductions in HAP emissions may not necessarily translate into significant reductions in health risk because toxicity varies by pollutant, and exposures may or may not exceed levels of concern. For example, acetaldehyde mass emissions are more than double acrolein emissions on a national basis, according to EPA’s 2005 National Emissions Inventory (NEI). However, the Integrated Risk Information System (IRIS) reference concentr ation (RfC) for acrolein is considerably lower than that for acetaldehyde, suggesting that acrolein could be potentially more toxic than acetaldehyde. Thus, it is important to account for the toxicity and exposure, as well as the mass of the targeted emissions.

Figure 7-4 Estimated Chronic Census Tract Carcinogenic Risk from HAP exposure from outdoor sources (2005 NATA) Deleted: Figure Deleted: Figure7-18 Figure 7-5 Estimated Chronic Census Tract Noncancer (Respiratory) Risk from HAP exposure from outdoor sources (2005 NATA) Due to methodology and time limitations under the court-ordered schedule, we were unable to estimate the benefits associated with the hazardous air pollutants that would be reduced as a result of these rules. In a few previous analyses of the benefits of reductions in HAP, EPA has quantified the benefits of potential reductions in the incidences of cancer and non-cancer risk (e.g., U.S. EPA, 1995). In those analyses, EPA relied on unit risk factors (URF) developed through risk assessment procedures. 15 These URFs are designed to be conservative, and as such, are more likely to represent the high end of the di stribution of risk rather than a best or most likely estimate of risk. As the purpose of a benefit analysis is to describe the benefits most likely to occur from a reduction in pollution, use of high-end, conservative risk estimates would overestimate the benefits of the regulation. While we used high-end risk estimates in past analyses, advice from the EPA’s Science Advisory Board (SAB) recommended that we avoid

15 The unit risk factor is a quantitative estimate of the car cinogenic potency of a pollutant, often expressed as the probability of contracting cancer from a 70-year lifetime continuous expo sure to a concentration of one μg/m 3 of a pollutant.7-19 using high-end estimates in benefit analyses (U.S. EPA-SAB, 2002). Since this time, EPA has continued to develop better methods for anal yzing the benefits of reductions in HAP. As part of the second prospective analysis of the benefits and costs of the Clean Air Act (U.S. EPA, 2011a), EPA conducted a case study analysis of the health effects associated with reducing exposure to benzene in Houston from implementation of the Clean Air Act (IEc, 2009). While reviewing the draft report, EPA’s Advisory Council on Clean Air Compliance Analysis concluded that “the challenges for assessing pr ogress in health improvement as a result of reductions in emissions of hazardous air pollutants (HAPs) are daunting...due to a lack of exposure-response functions, uncertainties in emissions inventories and background levels, the difficulty of extrapolating risk estimates to low doses and the challenges of tracking health progress for diseases, such as cancer, that have long latency periods” (U.S. EPA-SAB, 2008). In 2009, EPA convened a workshop to address the inherent complexities, limitations, and uncertainties in current methods to quantify the benefits of re ducing HAP. Recommendations from this workshop included identifying research priorities, focusing on susceptible and vulnerable populations, and improving dose-response relationships (Gwinn et al., 2011). In summary, monetization of the benefits of reductions in cancer incidences requires several important inputs, including central estimate s of cancer risks, estimates of exposure to carcinogenic HAP, and estimates of the value of an avoided case of cancer (fatal and non-fatal). Due to methodology and time limitations under the court-ordered schedule, we did not attempt to monetize the health benefits of reductions in HAP in this analysis. Instead, we provide a qualitative analysis of the health effects associat ed with the HAP anticipated to be reduced by these rules.EPA remains committed to improving methods for estimating HAP benefits by continuing to explore additional concepts of benefits, including changes in the distribution of risk. Although numerous HAP may be emitted from CI RICE, a few HAP account for over 90% of the total mass of HAP emissions emitted. These HAP are formaldehyde (72%), acetaldehyde (8%), acrolein (7%), methanol (3%), and benzene (3%). Although we do not have estimates of emission reductions for each HAP, this rule for existing CI engines is anticipated to reduce 1,000 tons of HAP each year. Below we describe the health effects associated with the top 5 HAP by mass emitted from CI RICE.7-20 Formaldehyde Since 1987, EPA has classified formaldehyde as a probable human carcinogen based on evidence in humans and in rats, mice, hamsters, and monkeys. 16 Substantial additional research since that time informs current scientific unders tanding of the health effects associated with exposure to formaldehyde. These include recently published research conducted by the National Cancer Institute (NCI) which found an incr eased risk of nasopharyngeal cancer and lymphohematopoietic malignancies such as leukemia among workers exposed to formaldehyde. 17,18 In an analysis of the lymphohematopoietic cancer mortality from an extended follow-up of these workers, NCI confirmed an association between lymphohematopoietic cancer risk and peak formaldehyde exposures. 19 A recent NIOSH study of garment workers also found increased risk of death due to leukemia among workers exposed to formaldehyde. 20 Extended follow-up of a cohort of British chemical wo rkers did not find evidence of an increase in nasopharyngeal or lymphohematopoietic cancers, but a continuing statistically significant excess in lung cancers was reported. 21 In the past 15 years there has been substantial research on the inhalation dosimetry for formaldehyde in rodents and primates by the Ch emical Industry Institute of Toxicology (CIIT, now renamed the Hamner Institutes for Health Sciences), with a focus on use of rodent data for refinement of the quantitative cancer dose-response assessment. 22 , 23 , 24 CIIT’s risk assessment of

16 U.S. EPA. 1987. Assessment of Health Risks to Garm ent Workers and Certain Home Residents from Exposure to Formaldehyde, Office of Pesticides and Toxic Substances, April 1987. Docket EPA-HQ-OAR-2010-0162. 17 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2003. Mortality from lymphohematopoetic malignancies among workers in formaldehyde industries. Journal of the National Cancer Institute 95: 1615- 1623. Docket EPA-HQ-OAR-2010-0162. 18 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2004. Mortality from solid cancers amongworkers in formaldehyde industries. American Journal of Epidemiology 159: 1117-1130. Docket EPA-HQOAR-2010-0162. 19 Beane Freeman, L. E.; Blair, A.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Hoover, R. N.; Hauptmann, M. 2009. Mortality from lymphohematopoietic malignancies among workers in formaldehyde industries: The National Cancer Institute cohort. J. National Cancer Inst. 101: 751-761. Docket EPA-HQ-OAR-2010-0162. 20 Pinkerton, L. E. 2004. Mortality among a cohort of garment workers exposed to formaldehyde: an update. Occup. Environ. Med. 61: 193-200. Docket EPA-HQ-OAR-2010-0162. 21 Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Exte nded follow-up of a cohort of British chemical workers exposed to formaldehyde. J National Cancer Inst. 95:1608-1615. Docket EPA-HQ-OAR-2010-0162. 22 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Kalisak, J Preston, and FJ Miller. 2003. Biologically motivated computational modeling of formaldehyde carci nogenicity in the F344 rat. Tox Sci 75: 432-447. Docket EPA-HQ-OAR-2010-0162. 23 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Ka lisak, J Preston, and FJ Miller. 2004. Human respiratory tract cancer risks of inhaled formaldehyde: Dose-respo nse predictions derived from biologically-motivated computational modeling of a combined rodent and huma n dataset. Tox Sci 82: 279-296. Docket EPA-HQ-OAR2010-0162.7-21 formaldehyde incorporated mechanistic and dosimetric information on formaldehyde. These data were modeled using a biologically-motivated two-stage clonal growth model for cancer and also a point of departure based on a Benchmark Dose approach. However, it should be noted that recent research published by EPA indicates that when two-stage modeling assumptions are varied, resulting dose-response estimates can vary by several orders of magnitude. 25 , 26 , 27 , 28 These findings are not supportive of interpreting the CIIT model results as providing a conservative (health protective) estimate of human risk. 29 EPA research also examined the contribution of the two-stage modeling for formaldehyde towards characterizing the relative weights of key events in the mode-of-action of a carcinogen. For example, the model-based inference in the published CIIT study that formaldehyde’s direct mutagenic action is not relevant to the compound’s tumorigenicity was found not to hold un der variations of modeling assumptions. 30 Based on the developments of the last decade, in 2004, the working group of the IARC concluded that formaldehyde is carcinogenic to humans (Group 1), on the basis of sufficient evidence in humans and sufficient evidence in experimental animals - a higher classification than previous IARC evaluations. After reviewing the currently available epidemiological evidence, the IARC (2006) characterized the human evidence for formaldehyde carcinogenicity as “sufficient,” based upon the data on nasopharyngeal cancers; the epidemiologic evidence on leukemia was characterized as “strong.” 31 Formaldehyde exposure also causes a range of noncancer health effects, including irritation of the eyes (burning and watering of th e eyes), nose and throat. Effects from repeated

24 Chemical Industry Institute of Toxicology (CIIT).199 9. Formaldehyde: Hazard charact erization and dose-response assessment for carcinogenicity by the r oute of inhalation. CIIT, Septembe r 28, 1999. Research Triangle Park, NC. Docket EPA-HQ-OAR-2010-0162. 25 U.S. EPA. Analysis of the Sensitivity and Uncertainty in 2-Stage Clonal Growth Models for Formaldehyde with Relevance to Other Biologically-Based Dose Response (BBDR) Models. U.S. Environmental Protection Agency, Washington, D.C., EPA/600/R-08/103, 2008. Docket EPA-HQ-OAR-2010-0162. 26 Subramaniam, R; Chen, C; Crump, K; .et .al. (2008) Uncertainties in biologically-based modeling of formaldehyde-induced cancer risk: id entification of key issues. Risk An al 28(4):907-923. Docket EPA-HQOAR-2010-0162. 27 Subramaniam RP; Crump KS; Van Landingham C; et. al. (2007) Uncertainties in the CIIT model for formaldehyde-induced carcinogenicity in the rat: A limi ted sensitivity analysis–I. Risk Anal, 27: 1237–1254. Docket EPA-HQ-OAR-2010-0162. 28 Crump, K; Chen, C; Fox, J; .et .al. (2008) Sensitivity analysis of biologically motivated model for formaldehydeinduced respiratory cancer in humans. Ann Occup Hyg 52:481-495. Docket EPA-HQ-OAR-2010-0162. 29 Crump, K; Chen, C; Fox, J; .et .al. (2008) Sensitivity analysis of biologically motivated model for formaldehydeinduced respiratory cancer in humans. Ann Occup Hyg 52:481-495. Docket EPA-HQ-OAR-2010-0162. 30 Subramaniam RP; Crump KS; Van Landingham C; et. al. (2007) Uncertainties in the CIIT model for formaldehyde-induced carcinogenicity in the rat: A limi ted sensitivity analysis–I. Risk Anal, 27: 1237–1254. Docket EPA-HQ-OAR-2010-0162. 31 International Agency for Research on Cancer (2006) Formaldehyde, 2-Butoxyethanol and 1-tert-Butoxypropan-2- ol. Monographs Volume 88. World Health Organization, Lyon, France. Docket EPA-HQ-OAR-2010-0162.7-22 exposure in humans include respiratory tract irri tation, chronic bronchitis and nasal epithelial lesions such as metaplasia and loss of cilia. An imal studies suggest that formaldehyde may also cause airway inflammation – including eosinophil infiltration into the airways. There are several studies that suggest that formaldehyde may increase the risk of asthma – particularly in the young. 32 , 33 The above-mentioned rodent and human studies, as well as mechanistic information and their analyses, were evaluated in EPA’s recent Draft Toxicological Review of Formaldehyde – Inhalation Assessment through the Integrated Risk Information System (IRIS) program. This draft IRIS assessment was released in June 20 10 for public review and comment and external peer review by the National Research Council (NRC). The NRC released their review report in April 2011 ( http://www.nap.edu/catalog.php?record_id=13142 ). The EPA is currently revising the draft assessment in response to this review. Acetaldehyde Acetaldehyde is classified in EPA’s IRIS database as a probable human carcinogen, based on nasal tumors in rats, and is considered toxic by the inhalation, oral, and intravenous routes. 34 Acetaldehyde is reasonably anticipated to be a human carcinogen by the U.S. Department of Health and Human Services (DHHS) in the 11 th Report on Carcinogens and is classified as possibly carcinogenic to humans (Group 2B) by the IARC. 35,36 The primary noncancer effects of exposure to acetaldehyde vapors include irritation of the eyes, skin, and respiratory tract. 37

32 Agency for Toxic Substances and Disease Registry (A TSDR). 1999. Toxicological profile for Formaldehyde. Atlanta, GA: U.S. Department of Health a nd Human Services, Public Health Service. http://www.atsdr.cdc.gov/toxprofiles/tp111.html . Docket EPA-HQ-OAR-2010-0162. 33 WHO (2002) Concise International Chemical Assessment Do cument 40: Formaldehyde. Published under the joint sponsorship of the United Nations Environment Programme, the International Labour Organization, and the World Health Organization, and produced within the framework of the Inter-Organization Programme for the Sound Management of Chemicals. Geneva. Docket EPA-HQ-OAR-2010-0162. 34 U.S. Environmental Protection Agency (U.S. EPA). 1991. Integrated Risk Information System File of Acetaldehyde. Research and Development, National Ce nter for Environmental Assessment, Washington, DC. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm. 35 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: http://ntp .niehs.nih.gov/go/16183. 36 International Agency for Research on Cancer (IARC). 1999. Re-evaluation of some organic chemicals, hydrazine, and hydrogen peroxide. IARC Monographs on the Eval uation of Carcinogenic Risk of Chemical to Humans, Vol 71. Lyon, France. 37 U.S. Environmental Protection Agency (U.S. EPA). 1991. Integrated Risk Information System File of Acetaldehyde. Research and Development, National Ce nter for Environmental Assessment, Washington, DC. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm.7-23 Acrolein EPA determined in 2003 that the human carcinogenic potential of acrolein could not be determined because the available data were inadequate. No information was available on the carcinogenic effects of acrolein in humans and the animal data provided inadequate evidence of carcinogenicity. 38 The IARC determined in 1995 that acrolein was not classifiable as to its carcinogenicity in humans. 39 Acrolein is extremely acrid and irritating to humans when inhaled, with acute exposure resulting in upper respiratory tract irritation, mucus hypersecretion and congestion. The intense irritancy of this carbonyl has been demonstrated during controlled tests in human subjects, who suffer intolerable eye and nasal mucosal sensory reactions within minutes of exposure. 40 These data and additional studies regarding acute effects of human exposure to acrolein are summarized in EPA’s 2003 IRIS Human Health Assessment for acrolein. 41 Evidence available from studies in humans indicate that levels as low as 0.09 ppm (0.21 mg/m 3 ) for five minutes may elicit subjective complaints of eye irritation with increasing concentrations leading to more extensive eye, nose and respiratory symptoms. 42 Lesions to the lungs and upper respiratory tract of rats, rabbits, and hamsters have been observed after subchronic exposure to acrolein. 43 Acute exposure effects in animal studies report bronchial hyper-responsiveness. 44 In a recent study, the acute respiratory irritant effects of exposure to 1.1 ppm acrolein were more pronounced in mice with allergic airway disease by comparison to non-diseased mice which also showed decreases in

38 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. Research and Development, National Center for Environm ental Assessment, Washington, DC. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 39 International Agency for Research on Cancer (IARC). 1995. Monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 63, Dry cleaning, some chlo rinated solvents and other industrial chemicals, World Health Organization, Lyon, France. 40 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. EPA/635/R-03/003. p. 10. Research and Developmen t, National Center for Environmental Assessment, Washington, DC. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 41 U.S. Environmental Protection Agency (U.S. EPA). 2003. In tegrated Risk Information System File of Acrolein. 2003. Research and Development, National Center for Environmental Assessment, Washington, DC. EPA/635/R-03/003. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 42 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. Research and Development, National Center for E nvironmental Assessment, Washington, DC. EPA/635/R03/003. p. 11. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 43 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. Research and Development, National Center for E nvironmental Assessment, Washington, DC. EPA/635/R03/003. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf. 44 U.S. Environmental Protection Agency (U.S. EPA). 2003. Integrated Risk Information System File of Acrolein. Research and Development, National Center for E nvironmental Assessment, Washington, DC. EPA/635/R03/003. This material is available at http://www.epa.gov/iris/toxreviews/0364tr.pdf.7-24 respiratory rate. 45 Based on these animal data and demonstration of similar effects in humans (i.e., reduction in respiratory rate), individuals with compromised respiratory function (e.g., emphysema, asthma) are expected to be at increased risk of developing adverse responses to strong respiratory irritants such as acrolein.

Benzene The EPA’s IRIS database lists benzene as a known human carcinogen (causing leukemia) by all routes of exposure, and concludes that exposure is associated with additional health effects, including genetic changes in both humans and animals and increased proliferation of bone marrow cells in mice. 46,47,48 EPA states in its IRIS database that da ta indicate a causal relationship between benzene exposure and acute lymphocytic leukemia and suggest a relationship between benzene exposure and chronic non-lymphocytic leukemia and chronic lymphocytic leukemia. The IARC has determined that benzene is a human carcinogen and the DHHS has characterized benzene as a known human carcinogen. 49,50 A number of adverse noncancer health effects including blood disorders, such as preleukemia and aplastic anemia, have also been associated with long-term exposure to benzene. 51,52

45 Morris JB, Symanowicz PT, Olsen JE, et al. 2003. Immediate sensory nerve-mediated respiratory responses to irritants in healthy and allergic airway-diseased mice. J Appl Physiol 94(4):1563-1571. 46 U.S. Environmental Protection Agency (U.S. EPA). 2000. Integrated Risk Information System File for Benzene. Research and Development, National Center for Environm ental Assessment, Washington, DC. This material is available electronically at: http://www.epa.gov/iris/subst/0276.htm. 47 International Agency for Research on Cancer, IARC monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 29, Some industrial chemic als and dyestuffs, International Agency for Research on Cancer, World Health Organization, Lyon, France, p. 345-389, 1982. 48 Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry, V.A. (1992) Synergistic action of the benzene metabolite hydroquinone on myelopoietic stimulating activity of granul ocyte/macrophage colony-stimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691-3695. 49 International Agency for Research on Cancer (IARC). 1987. Monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 29, Supplement 7, Some industrial chemicals and dyestuffs, World Health Organization, Lyon, France. 50 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: http://ntp .niehs.nih.gov/go/16183. 51 Aksoy, M. (1989). Hematotoxicity and carcinogenici ty of benzene. Environ. Health Perspect. 82: 193-197. 52 Goldstein, B.D. (1988). Benzene toxicity. Occupati onal medicine. State of the Art Reviews. 3: 541-554.7-25 Methanol Exposure of humans to methanol by inhalatio n or ingestion may result in central nervous system depression and degenerative changes in the brain and visual systems. After inhaled or ingested, methanol is converted to formate, a high ly toxic metabolite that within the course of a few hours can cause narcosis, metabolic acidosis, headaches, severe abdominal and leg pain and visual degeneration that can lead to blindness. 53 Methanol has been demonstrated to cause developmental toxicity in rats and mice, and reproductive and developmental toxicity in monkeys. A number of studies have reported adverse effects in the offspring of rats and mice exposed to methanol by inhalation including reduced weight of brain pituitary gland, thymus, thyroid, reduced overall fetal body weight and increased incidence of extra ribs and cleft palate. 54,55,56 Methanol inhalation stud ies using rhesus monkeys have reported a decrease in the length of pregnancy, and limited evidence of impaired learning ability in offspring. 57,58,59,60 EPA has not classified methanol with respect to its carcinogenicity.

Other Air Toxics In addition to the compounds described above, other toxic compounds might be affected by these rules. Information regarding the health effects of those compounds can be found in EPA’s IRIS database. 61

53 Rowe, VK and McCollister, SB. 1981. Alcohols. In: Patty's Industrial Hygiene and Toxicology, 3rd ed. Vol. 2C, GD Clayton, FE Clayton, Eds. John Wiley & Sons, New York, pp. 4528-4541. 54 New Energy Development Organization (NEDO). 1987. Toxicological research of methanol as a fuel for power station: summary report on tests with monkeys, rats and mice. Tokyo, Japan. 55 Nelson, BK; Brightwell, WS; MacKenzie, DR; Khan, A; Burg, JR; Weigel, WW; Goad, PT. 1985. Teratological assessment of methanol and ethanol at high inha lation levels in rats. Toxicol Sci, 5: 727-736. 56 Rogers, JM; Barbee, BD; Rehnberg, BF. 1993. Critical pe riods of sensitivity for the developmental toxicity of inhaled methanol. Teratology, 47: 395. 57 Burbacher, T; Grant, K; Shen, D; Damian, D; Ellis, S; Liberato, N. 1999. Reproducti ve and offspring developmental effects following maternal inhalation e xposure to methanol in nonhuman primates Part II: developmental effects in infants exposed prenatally to methanol. Health Effects Institute. Cambridge, MA. 58 Burbacher, T; Shen, D; Grant, K; Sheppard, L; Damian, D; Ellis, S; Liberato, N. 1999. Reproductive and offspring developmental effects following maternal inhalation e xposure to methanol in nonhuman primates Part I: methanol disposition and reproductive toxicity in a dult females. Health Effects Institute. Cambridge, MA. 59 Burbacher, TM; Grant, KS; Shen, DD; Sheppard, L; Damian, D; Ellis, S; Liberato, N. 2004. Chronic maternal methanol inhalation in nonhuman primates (Macaca fasc icularis): reproductive performance and birth outcome. Neurotoxicol Teratol, 26: 639-650. 60 Burbacher, TM; Shen, DD; Lalovic, B; Gr ant, KS; Sheppard, L; Damian, D; Ellis, S; Liberato, N. 2004. Chronic maternal methanol inhalation in nonhuman primates (Macaca fascicularis): exposure and toxicokinetics prior to and during pregnancy. Neurotoxicol Teratol, 26: 201-221. 61 U.S. EPA Integrated Risk Information System (I RIS) database is available at: www.epa.gov/iris7-26 7.2.2 Ozone Co-Benefits In the presence of sunlight, NOx and VOCs can undergo a chemical reaction in the atmosphere to form ozone. Reducing ambien t ozone concentrations is associated with significant human health benefits, including mo rtality and respiratory morbidity (U.S. EPA, 2008a). Epidemiological researchers have associated ozone exposure with adverse health effects in numerous toxicological, clinical and epidemiol ogical studies (U.S. EPA, 2006c). These health effects include respiratory morbidity such as fewer asthma attacks, hospital and ER visits, school loss days, as well as premature mortality. 7.2.3 Carbon Monoxide Co-Benefits Carbon monoxide in ambient air is formed primarily by the incomplete combustion of carbon-containing fuels and photochemical reactions in the atmosphere. The amount of CO emitted from these reactions, relative to carbon dioxide (CO 2 ), is sensitive to conditions in the combustion zone, such as fuel oxygen content, burn temperature, or mixing time. Upon inhalation, CO diffuses through the respiratory system to the blood, which can cause hypoxia (reduced oxygen availability). Carbon monoxide can elicit a broad range of effects in multiple tissues and organ systems that are dependent upon concentration and duration of exposure. The Integrated Science Assessment for Carbon Monoxide (U.S. EPA, 2010a) concluded that short-term exposure to CO is “likely to have a causal relationship” with cardiovascular morbidity, particularly in individuals with coronary heart disease. Epidemiologic studies associate short-term CO exposure with increased risk of emergency department visits and hospital admissions. Coronary heart disease includes those who have angina pectoris (cardiac chest pain), as well as those who have experienced a heart attack. Other subpopulations potentially at risk include individuals with diseases such as chronic obstructive pulmonary disease (COPD), anemia, or diabetes, and individuals in very early or late life stages, such as older adults or the developing young. The evidence is suggestive of a causal relationship between short-term exposure to CO and respiratory morbidity and mortality. The evidence is also suggestive of a causal relationship for birth outcomes and developmental effects following long-term exposure to CO, and for central nervous system effects li nked to short- and long-term exposure to CO. 7.2.4 Visibility Impairment Co-Benefits Reducing secondary formation of PM 2.5 would improve visibility throughout the U.S. Fine particles with significant light-extinction efficiencies include sulf ates, nitrates, organic carbon, elemental carbon, and soil (Sisler, 1996). Suspended particles and gases degrade visibility by scattering and abso rbing light. Higher visibility impa irment levels in the East are due to generally higher concentrations of fine particles, particularly sulfates, and higher average7-27 relative humidity levels. Visibility has direct significance to people’s enjoyment of daily activities and their overall sense of wellbeing. Good visibility increases the quality of life where individuals live and work, and where they engage in recreational activities. Previous analyses (U.S. EPA, 2006; U.S. EPA, 2011a; U.S. EPA, 2011b) show that visibility benefits are a significant welfare benefit category. Without air quality modeling, we are unable to estimate visibility related benefits, nor are we able to determine whether VOC emission reductions would be likely to have a significant impact on visibility in urban areas or Class I areas. 7.3 Characterization of Uncertainty in the Monetized Co-Benefits In any complex analysis, there are likely to be many sources of uncertainty. Many inputs are used to derive the final estimate of economi c benefits, including emission inventories, air quality models (with their associated paramete rs and inputs), epidemiological estimates of concentration-response (C-R) functions, estima tes of values, population estimates, income estimates, and estimates of the future state of the world (i.e., regulations, technology, and human behavior). For some parameters or inputs it may be possible to provide a statistical representation of the underlying uncertainty distribution. For other parameters or inputs, the necessary information is not available. As discussed in the PM 2.5 NAAQS RIA (Table 5.5) (U.S. EPA, 2006), there are a variety of uncertainties associated with these PM benefits. Therefore, the estimates of annual benefits should be viewed as representative of the magnitude of benefits expected, rather than the actual benefits that would occur every year. It is important to note that the monetized benefit-per-ton estimates used here reflect specific geographic patterns of emissions redu ctions and specific air quality and benefits modeling assumptions. For example, these estimates do not reflect local variability in population density, meteorology, exposure, baseline health in cidence rates, or other local factors. Use of these $/ton values to estimate benefits may lead to higher or lower benefit estimates than if benefits were calculated based on direct air quality modeling. Great care should be taken in applying these estimates to emission reductions occurring in any specific location, as these are all based on national or broad regional emission reduction programs and therefore represent average benefits-per-ton over the entire Unite d States. The benefits-per-ton for emission reductions in specific locations may be very different than the estimates presented here. For more information, see the TSD describing the calcula tion of the new benefit-per-ton estimates (U.S. EPA, 2012).7-28 PM 2.5 mortality benefits are the largest benefit category that we monetized in this analysis. To better characterize the uncertainty associated with mortality impacts that are estimated to occur in areas with low baseline levels of PM 2.5 , we included the LML assessment. For this analysis, policy-specific air quality data is not available due to time or resource limitations, thus we are unable to estimate the pe rcentage of premature mortality associated with this specific rule’s emission reductions at each PM 2.5 level. As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the source apportionment modeling used to calculate the benefit-per-ton estimates for this sector. A very large proportion of the population is exposed at or above the lowest LML of the cohort studies (Figures 7-6 and 7-7), increasing our confidence in the PM mortality analysis. Figure 7-6 shows a bar chart of the percentage of the populati on exposed to various ai r quality levels in the pre- and post-policy policy. Figure 7-7 shows a cumulative distribution function of the same data. Both figures identify the LML for each of the major cohort studies. As the policy shifts the distribution of air quality levels, fewer people are exposed to PM 2.5 levels at or above the LML. Using the Pope et al. (2002) study, the 77% of the population is exposed to annual mean PM 2.5 levels at or above the LML of 7.5 μg/m 3 . Using the Laden et al. (2006) study, 25% of the population is exposed above the LML of 10 μg/m 3

. As we model avoided premature deaths among populations exposed to levels of PM 2.5 , we have lower confidence in levels below the LML for each study. It is important to emphasize that we have high confidence in PM 2.5 -related effects down to the lowest LML of the major cohort studies. Just because we have greater confidence in the benefits above the LML, this does not mean that we have no confidence that benefits occur below the LML. A large fraction of the baseline exposure o ccurs below the level of the National Ambient Air Quality Standard (NAAQS) for annual PM 2.5 at 15 μg/m 3 , which was set in 2006. It is important to emphasize that NAAQS are not set at a level of zero risk. Instead, the NAAQS reflect the level determined by the Administrator to be protective of public health within an adequate margin of safety, taki ng into consideration effects on susceptible populations. While benefits occurring below the standard may be less certain than those occurring above the standard, EPA considers them to be legitimate components of the total benefits estimate.7-29 Figure 7-6. Percentage of Adult Population by Annual Mean PM 2.5 Exposure in the Baseline7-30 Figure 7-7. Cumulative Distribution of Adult Population by Annual Mean PM 2.5 Exposure in the Baseline

Above we present the estimates of the total benefits, based on our interpretation of the best available scientific literature and methods and supported by the SAB-HES and the NAS (NRC, 2002). The benefits estimates are subject to a number of assumptions and uncertainties. For example, for key assumptions underlying the estimates for premature mortality, which typically account for more than 90% of the total benefits, we we re able to quantify include the following:

1. PM 2.5 benefits were derived through benefit per-ton estimates, which do not reflect local variability in population density, meteorology, exposure, baseline healthincidence rates, or other local factors that might lead to an over-estimate or underestimate of the actual benefits of controlling directly emitted fine particulates. We do not have data on the specific location of the air quality changes associated with this rulemaking; as such, it is not feasible to es timate the proportion of benefits occurring in different locations, such as designated nonattainment areas. In addition, the benefit-per-ton estimates are based on emissi ons from existing sources. To the extent7-31 that the geographic distribution of the emissi ons reductions for this rule are different than the modeled emissions, the benefits ma y be underestimated or overestimated. In general, there is inherently more uncer tainty for new sources, which may not be included in the emissions inventory, than existing sources. 2. We assume that all fine particles, rega rdless of their chemical composition, are equally potent in causing premature mortality. This is an important assumption, because PM 2.5 produced via transported precursors emitted from EGUs may differ significantly from direct PM 2.5 released from diesel engines and other industrial sources, but no clear scientific grounds exist for supporting differential effects estimates by particle type. 3. We assume that the health impact function for fine particles is linear down to the lowest air quality levels modeled in this an alysis. Thus, the estimates include health benefits from reducing fine particles in areas with varied concentrations of PM 2.5, including both regions that are in attainment with fine particle standard and those that do not meet the standard down to the lowest modeled concentrations. 4. To characterize the uncertainty in the relationship between PM 2.5 and premature mortality (which typically accounts for 85% to 95% of total monetized benefits), we include a set of twelve estimates based on results of the expert elicitation study in addition to our core estimates. Even these multiple characterizations omit the uncertainty in air quality estimates, baseline incidence rates, populations exposed and transferability of the effect estimate to diverse locations. As a result, the reported confidence intervals and range of estimates give an incomplete picture about the overall uncertainty in the PM 2.5 estimates. This information should be interpreted within the context of the larger uncertainty surrounding the entire analysis. For more information on the uncertainties associated with PM 2.5 benefits, please consult the PM 2.5 NAAQS RIA (Table 5.5).

This RIA does not include the type of deta iled uncertainty assessment found in the PM NAAQS RIA because we lack the necessary air quality input and monitoring data to run the benefits model. In addition, we have not conducted any air quality modeling for this rule. Moreover, it was not possible to develop benefit-per-ton metrics and associated estimates of uncertainty using the benefits estimates from the PM RIA because of the significant differences between the sources affected in that rule and those regulated here. However, the results of the Monte Carlo analyses of the health and welfare benefits presented in Chapter 5 of the PM RIA can provide some evidence of the uncertainty surrounding the benefits results presented in this analysis.7-32 7.4 Comparison of Co-Benefits and Costs Using a 3% discount rate, we estimate the total combined monetized co-benefits of the reconsidered CI RICE NESHAP proposal to be $770 million to $1.9 billion in theimplementation year (2013). Using a 7% discount rate, we estimate the total monetized cobenefits of the reconsidered CI RICE NESHAP pr oposal to be $690 million to $1.7 billion. The annualized social costs of the proposed NESHAP are $373 million (2010$) at a 7% interest rate. 62 The annualized social costs of the proposed NESHAP are $372 million in 2008$. Thus, the net benefits are $400 million to $1.5 billion at a 3% discount rate and $320 million to $1.3 billion at a 7% discount rate. All estimates are in 2010$ for the year 2013. Table 7-5 shows a summary of the monetized co-benefits, social costs, and net benefits for the CI RICE NESHAP, respectively. Figures 7-8 and 7-9 show the full range of net benefits estimates (i.e., annual co-benefits minus an nualized costs) utilizing the 14 different PM 2.5 mortality functions at discount rates of 3% and 7%. In addition, the benefits from reducing 109,000 tons of carbon monoxide and 6,000 tons of HAP each year from existing SI RICE have not been included in these estimates. EPA believe s that the co-benefits are likely to exceed the costs under this rulemaking even when taking in to account uncertainties in the cost and benefit estimates. Table 7-5. Summary of the Annualized Monetized Benefits, Social Costs, and Net Benefits for the Proposed Reconsidered CI RICE NESHAP in 2013 (millions of 2010$) 1

3% Discount Rate 7% Discount Rate Final Major Source NESHAP Total Monetized Benefits 2 $770 to $1,900 $690 to $1,700 Total Compliance Costs 3 $373 $373 Net Benefits $400 to $1,500 $320 to $1,300

Non-monetized Benefits Health effects from HAP exposure Health effects from PM 2.5 exposure from VOC emissions Ecosystem effects Visibility impairment 1 All estimates are for the implementation year (2013), and are rounded to two significant figures. The annual ized

compliance costs are $372 million in 2008$ as noted earlier in this RIA. Compliance costs are used as an approximation for social costs in this RIA.

62 For more information on the annualized social costs, please refer to Section 5 of this RIA.7-33 2 The total monetized benefits reflect the human heal th benefits associated with reducing exposure to PM 2.5 through

reductions of PM 2.5 precursors such as directly emitted fine particle s. Human health benefits are shown as a range from Pope et al. (2002) to Laden et al. (2006). These mode ls assume that all fine particles, regardless of their chemical composition, are equally potent in causing prematur e mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. Because these estimates were generated using benefit-per-ton estimates, we do not break down the to tal monetized benefits into specific components here. See Figure 7-1 for an illustration of the breakdown, or the RIA for the final Cross-States Air Pollution Rule (EPA, 2011) for more information.

3 The engineering compliance costs are annualized using a 7 percent discount rate.7-34 Figure 7-8. Net Benefits for Proposed CI RICE NESHAP Reconsideration at 3% discount rate* *Net Benefits are quantified in terms of PM 2.5 at a 3% discount rate for 2013 and are in 2010$. This graph shows 14 benefits estimates combined with the cost estimate. All fine particles are assumed to have equivalent health effects, but the benefit per ton estimates vary because each ton of precursor reduced has a different propensity to become PM 2.5 . The monetized benefits incorporate the conversion from precursor emissions to ambient fine particles. ‐ $100

‐ $80 ‐ $60 ‐ $40 ‐ $20

$0 $20 $40 $60 $80 $100

Pope et al. Laden et al.Millions(2010$)

Cost estimate combined with total monetized benefits estimates derived from 2 epidemiology functions and 12 expert functions ‐ $500

$0 $500 $1,000 $1,500 $2,000 $2,500

Pope et al. Laden et al.Millions(2010$)

Cost estimate combined with total monetized benefits estimates derived from 2 epidemiology functions and 12 expert functions7-35 Figure 7-9. Net Benefits for Proposed CI RICE NESHAP Reconsideration at 7% discount rate* *Net Benefits are quantified in terms of PM 2.5 benefits at a 7% discount rate at a 7% discount rate for 2013 and are in 2010$. This graph shows 14 benefits estimates combined wi th the cost estimate. All fine particles are assumed to have equivalent health effects. The monetized benefits incorporate the conversion from precursor emissions to ambient fine particles. ‐ $500

$0 $500 $1,000 $1,500 $2,000 $2,500

Pope et al. Laden et al.Millions(2010$)

Cost estimate combined with total monetized benefits estimates derived from 2 epidemiology functions and 12 expert functions7-36 7.5 References Fann, N., C.M. Fulcher, B.J. Hubbell. 2009. “The influence of location, source, and emission type in estimates of the human health bene fits of reducing a ton of air pollution.” Air Qual Atmos Health 2:169–176. Gwinn, M.R., J. Craig, D.A. Axelrad, R. Cook, C. Dockins, N. Fann, R. Fegley, D.E. Guinnup, G. Helfand, B. Hubbell, S.L. Mazur, T. Palma, R.L. Smith, J. Vandenberg, and B. Sonawane. 2011. “Meeting report: Estimating the benefits of reducing hazardous air pollutants—summary of 2009 worksh op and future considerations.” Environ Health Perspect . Jan; 119(1): p. 125-30. Kochi, I., B. Hubbell, and R. Kramer. 2006. “An Empirical Bayes Approach to Combining Estimates of the Value of Statistical Life for Environmental Policy Analysis .” Environmental and Resource Economics. 34: 385-406. Krewski D, Jerrett M, Burnett RT, Ma R, Hughes E, Shi, Y, et al. 2009. Extended follow-up and spatial analysis of the American Cancer Soci ety study linking particulate air pollution and mortality. HEI Research Report, 140, Health Effects Institute, Boston, MA. Laden, F., J. Schwartz, F.E. Speizer, and D.W. Dockery. 2006. Reduction in Fine Particulate Air Pollution and Mortality. American Journal of Respiratory and Critical Care Medicine. 173: 667-672. Mrozek, J.R., and L.O. Taylor. 2002. “What Determines the Value of Life? A Meta-Analysis.” Journal of Policy Analysis and Management 21(2):253-270. National Research Council (NRC). 2002. Estimating the Public Health Benefits of Proposed Air Pollution Regulations . Washington, DC: The National Academies Press. National Research Council (NRC). 2009. Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use. National Academies Press. Washington, DC. Office of Management and Budget (OMB). 2003. Circular A-4: Regulatory Analysis. Washington, DC. Available on the Internet at http://www.whitehouse.gov/omb /circulars/a004/a-4.html

. Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D. Krewski, K. Ito, and G.D. Thurston. 2002. “Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine Particulate Air Pollution.” Journal of the American Medical Association 287:1132-1141. Roman, Henry A., Katherine D. Walker, Tyra L. Walsh, Lisa Conner, Harvey M. Richmond, Bryan J. Hubbell, and Patrick L. Kinney. 2008. “Expert Judgment Assessment of the Mortality Impact of Changes in Ambient Fine Particulate Matter in the U.S.” Environ. Sci. Technol ., 42(7):2268-2274.7-37 Sisler, J.F. 1996. Spatial and seasonal patterns and long-t erm variability of the composition of the haze in the United States: an analysis of data from the IMPROVE network . CIRA Report, ISSN 0737-5352-32, Colorado State University. U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2007. SAB Advisory on EPA’s Issues in Valuing Mortality Risk Reduction. EPA-SAB-08-001. October. 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Available at < http://www.epa.gov/ttn/ecas/regdata /RIAs/Chapter%205--Benefits.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2008a. Regulatory Impact Analysis, 2008 National Ambient Air Quality Stand ards for Ground-level Ozone , Chapter 6. Available at < http://www.epa.gov/ttn/ecas/regdata/RIAs/6-ozoneriachapter6.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2008c. Integrated Science Assessment for Oxides of Nitrogen - Health Criteria (Final Report). National Center for Environmental Assessment, Research Triangle Park, NC. July. Available at at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=194645>. U.S. Environmental Protection Agency (U.S. EPA). 2008d. Integrated Science Assessment for Oxides of Nitrogen and Sulfur–Ecological Criteria National (Final Report). National Center for Environmental Assessment, Research Tria ngle Park, NC. EPA/600/R-08/139. December. Available at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=201485>. U.S. Environmental Protection Agency (U.S. EPA). 2009a . Regulatory Impact Analysis: National Emission Standards for Hazardous Ai r Pollutants from the Portland Cement Manufacturing Industry . Office of Air Quality Planning and Standards, Research Triangle Park, NC. April. Available on the Internet at < http://www.epa.gov/ttn/ecas/regdata/R IAs/portlandcementria_4-20-09.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2009b. Integrated Science Assessment for Particulate Matter (Final Report) . EPA-600-R-08-139F. National Center for Environmental Assessment – RTP Division. December. Available on the Internet at < http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546 >. U.S. Environmental Protection Agency (U.S. EPA). 2010a. Final Regulatory Impact Analysis (RIA) for the SO 2 National Ambient Air Quality Standards (NAAQS). Office of Air Quality Planning and Standards, Research Triangle Park, NC. June. Available at <http://www.epa.gov/ttn/ecas/ria.html>. U.S. Environmental Protection Agency (U.S. EPA). 2010b. Technical Support Document: Summary of Expert Opinions on the Existence of a Threshold in the Concentration-Response Function for PM 2.5 -related Mortality . Research Triangle Park, NC. June. Available on the Internet at <www.epa.gov/ttn/ecas/regdata/Benefits/threshold s tsd.pdf>. U.S. Environmental Protection Agency (U.S. EPA). 2010c. Guidelines for Preparing Economic Analyses . EPA 240-R-10-001. National Center for Environmental Economics, Office of Policy Economics and Innovation. Washington, DC. December. Available on the Internet at < http://yosemite.epa.gov/ee/epa/eerm.nsf/ vwAN/EE-0568-50.pdf/$file/EE-0568-50.pdf >.7-39 U.S. Environmental Protection Agency (U.S. EPA). 2011a. The Benefits and Costs of the Clean Air Act from 1990 to 2020 . Office of Air and Radiation, Washington, DC. March. <http://www.epa.gov/air/sect812/feb11/fullreport.pdf>. Accessed March 30, 2011. U.S. Environmental Protection Agency (U.S. EPA). 2011b. 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. Washington, DC: U.S. Bureau of the Census. Table 1.8-3 U.S. Census Bureau. 2011a. Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail Employment Sizes: 2007. < http://www.cen sus.gov/csd/susb/download_susb07.htm>. U.S. Census Bureau. 2011b. Firm Size Data from the Statistics of U.S. Businesses, U.S. All Industries Tabulated by Receipt Size: 2007. < http://www.census.gov/csd/su sb/download_susb07.htm>. U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 21: Mining: Industry Series: Historical Statis tics for the Industry: 2002 and 2007.” <http://factfinder.census.gov>; (February 21, 2012). U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 22: Utilities: Subject Series—Estab & Firm Si ze: Concentration by Largest Firms for the United States: 2002.” <http://factfinde r.census.gov>; (November 21, 2008). U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 22: Utilities: Geographic Area Series: Summary Statistics: 2002 and 2007.” <http://factfinder.census.gov>; (February 21, 2012). U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 62: Health Care and Social Assistance: Subject Series—Estab & Firm Size: Legal Form of Organization for the United States: 2002” <http://factfinder.census.gov>; (November 21, 2008). U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 31: Manufacturing: Industry Series: Historical St atistics for the Industry: 2007 and Earlier Years” <http://factfinder.census.gov>; (February 23, 2012). U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48: Transportation and Warehousing: Industry Se ries: Comparative Statistics for the United States (1997 NAICS Basis): 2002 and 2007” <http://factfinder.census.gov>; (February 23, 2012). U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48: Transportation and Warehousing: Subject Se ries—Estab & Firm Size: Concentration by Largest Firms for the United States: 2002” <http://factfinder.census.gov>; (December 12, 2008). U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48-49: Geographic Distribution—Pipeline tran sportation of natural gas: 2002.” <http://factfinder.census.gov>; (November 10, 2008). U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 48-49: Transportation and Warehousing: Subject Series—Estab & Firm Size: Legal Form of Organization for the United States: 2002” <http://factfinder.census.gov>; (December 12, 2008).8-4 U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 00: All sectors: Geographic Area Series: Ec onomy-Wide Key Statistics: 2007” <http://factfinder.census.gov>; (Februray 23, 2012). U.S. Department of Agriculture (USDA), Nationa l Agricultural Statistics Service (NASS). 2004. “2003 Farm and Ranch Irrigation Survey.” Washington, DC: USDA-NASS. U.S. Department of Agriculture (USDA), Nationa l Agricultural Statistics Service (NASS). 2009. “2008 Farm and Ranch Irrigation Survey.” Washington, DC: USDA-NASS. U.S. Department of Agriculture (USDA). 2008. “Agricultural Projections to 2017.” <http://www.ers.usda.gov/Publicat ions/OCE081/OCE20081c.pdf>. U.S. Department of Agriculture (USDA). 2008. “Agricultural Projections to 2017.” <http://www.ers.usda.gov/Publicat ions/OCE081/OCE20081c.pdf>. U.S. Department of Energy, Energy Information Administration. 2007. “2006 EIA-906/920 Monthly Time Series.” U.S. Energy Information Administration. 2008a. <http://www.eia.doe.gov/cneaf/electricity/page/ restructuring/restructure_elect.htm l>. Last updated September 2008. U.S. Energy Information Administration. 2009. Supplemental Tables to the Annual Energy Outlook 2010. Table 2. Available at: <http://w ww.eia.doe.gov/oiaf/aeo/aeoref_tab.html>. U.S. Environmental Protection Agency (U.S. EPA). 2010. Guidelines for Preparing Economic Analyses. EPA 240-R-10-003. National Center for Environmental Economics, Office of Policy. Washington, DC. September. Available on the Internet at < http://yosemite.epa.gov/ee/epa/eed.nsf/pages/Guidelines.html

. U.S. Environmental Protection Agency (EPA). May 2004. Final Regulatory Analysis: Control of Emissions from Nonroad Diesel Engines. EPA420-R-04-007. Washington, DC: EPA. < http://www.epa.gov/nonro ad-diesel/2004fr/420r04007.pdf>. U.S. Environmental Protection Agency. 2006. Regulatory Impact Analysis, 2006 National Ambient Air Quality Standards for Particulate Matter , Chapter 5. Available at < http://www.epa.gov/ttn/ecas/regdata/RIAs/Chapter%205-- Benefits.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2008. Guidelines for Preparing Economic Analyses: External Review Draft. National Center for Environmental Economics, Office of Policy Economics and Innovation. Washington, DC. September. Available on the Internet at < http://yosemite.epa.gov/ee/epa/eermfile.nsf/vwAN/EE-0516- 01.pdf/$File/EE-0516-01.pdf >.8-5 U.S. Environmental Protection Agency. 2008. Regulatory Impact Analysis, 2008 National Ambient Air Quality Standards for Ground-level Ozone, Chapter 6. Available at <http://www.epa.gov/ttn/ecas/regdata /RIAs/6-ozoneriachapter6.pdf>. U.S. Environmental Protection Agency. 2008. Technical Support Document: Calculating Benefit Per-Ton estimates, Ozone NAAQS Docket #EPA-HQ-OAR-2007- 0225-0284. U.S. Environmental Protection Agency. 2008. Integrated Science Assessment for Particulate Matter (External Review Draft). Washington, DC, EPA/600/R-08/139. Available on the Internet at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=201805>. U.S. Environmental Protection Agency (U.S. EPA). 2009a. Regulatory Impact Analysis: National Emission Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry. Office of Air Quality Planning and Standards, Research Triangle Park, NC. April. Available on the Internet at < http://www.epa.gov/ttn/ecas/regdata /RIAs/portlandcementria_4-20-09.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2009b. Proposed SO 2 NAAQS Regulatory Impact Analysis (RIA). Office of Air Qualit y Planning and Standards, Research Triangle Park, NC. November. Available on the Internet at < http://www.epa.gov/ttn/ecas/regda ta/RIAs/pso2full11-16-09.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2009c. Integrated Science Assessment for Particulate Matter (Final Report). EPA-600-R-08-139F. National Center for Environmental Assessment – RTP Division. D ecember. Available on the Internet at < http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546 >. U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2007. SAB Advisory on EPA’s Issues in Valuing Mort ality Risk Reduction. EPA-SAB-08-001. October. Available on the Internet at < http://yosemite.epa.gov/sab/sabproduct.nsf/4128007E7876B8F0852573760058A978/$F ile/sab-08-001.pdf >. U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2009a. Review of EPA’s Integrated Science Assessmen t for Particulate Matter (First External Review Draft, December 2008). EPA-COUNCIL-09-008. May. Available on the Internet at < http://yosemite.epa.gov/sab/SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86 e/73ACCA834AB44A10852575BD0064 346B/$File/EPA-CASAC-09-008- unsigned.pdf >.8-6 U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2009b. Consultation on EPA’s Particulate Matter National Ambient Air Quality Standards: Scope and Methods Plan for Health Risk and Exposure Assessment. EPA-COUNCIL-09- 009. May. Available on the Internet at < http://yosemite.epa.gov/sab/SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86 e/723FE644C5D758DF852575BD00763A32/$File/EPA-CASAC-09-009-unsigned.pdf >. U.S. Small Business Administration (SBA). 2008. “Table of Small Business Size Standards Matched to North American Industry Classification System Codes.” Effective August 22, 2008. <http://www.sba.gov/idc/groups/publ ic/documents/sba_homepage/serv_sstd_ tablepdf.pdf>. Viscusi, V.K., and J.E. Aldy. 2003. “The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World.” Journal of Risk and Uncertainty, 27(1):5-76. Wade, S.H. 2003. “Price Responsiveness in the AEO2003 NEMS Residential and Commercial Buildings Sector Models.” <http://www.eia.doe.gov/oiaf/analysisp aper/elasticity/pdf/buildings.pdf>.8-7 United States Environmental Protection Agency Office of Air Quality Planning and Standards Health and Environmental Impacts Division Research Triangle Park, NC

### Page 5-14: [1] Deleted Author 

## Morgenstern et al. (2002) examined how re gulated industries respond to re gulation. The authors found that, on average for the industries they studied, employme nt increases in regulated firms. Of course, these firms may also reassign existing em ployees to perform these activities.

Page 5-14: [2] Deleted Author 

## . We do not estimate any potential changes in labor outside of the affected sector. It is important to highlight that unlike the typical case where to reduce a bad output (i.e., emissions) a firm often has to reduce production of the good output, many of the emission controls requi red by the proposed rule will simultaneously increase production of the good output and reduce production of bad outputs. That is, these controls jointly produce environmental improvement s and increase output in the regulated sector. New labor associated with implem enting these controls to comply with the new regulations can also be viewed as additional labor increas ing output while reducing undesirable emissions.

## To: Melanie King/RTP/USEPA/US@EPA From: "Higgins, Cortney" <Cortney_Higgins@omb.eop.gov> Date: 05/11/2012 05:45PM Cc: RobertJ Wayland/RTP/USEPA/US@EPA, Fred Talcott/DC/USEPA/US@EPA Subject: RE: RICE preamble (See attached file: EO_12866_RICE_NESHAP_Reconsideration_Proposal_2060-AQ58_4-10- 12_InteragencyCommentsunderEO13563onPipelines.docx) Hi Melanie, Attached is a redline of the initial preamble submission with suggested edits on the pipeline issue. Thanks, Cortney From: Melanie King [mailto:King.Melanie@epamail.epa.gov] Sent: Friday, May 11, 2012 3:31 PM To: Higgins, Cortney Cc: RobertJ Wayland; Michael Horowitz; Larry Sorrels; Amy Lamson; Paul Balserak; Fred Talcott Subject: RICE preamble Hi Cortney, We have made edits to the preamble to address interagency comments to date, please see attached. There is one issue that we are still waiting on some feedback on from our management, which is the timing issue for the San Joaquin Valley Tier 1/2 engines, so please consider that still open for now. We will be sending revised RIAs separately later this afternoon. (See attached file: RICE NESHAP Reconsideration Proposal 2060-AQ58 5-11-12 redline.docx) Melanie King Energy Strategies Group Sector Policies and Programs Division Office of Air Quality Planning and Standards U.S. Environmental Protection Agency Mail Code D243-01 RTP, NC 27711 Phone: (919) 541-2469 Fax: (919) 541-5450 king.melanie@epa.gov

=***E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

**E.O. 12866 NESHAP RICE; NSPS For Stationary Internal Combustion Engines 2060-AQ58 Proposal 20120410** 

6560-50-P

**ENVIRONMENTAL PROTECTION AGENCY**

**40 CFR Part 63 [EPA-HQ-OAR-2008-0708, FRL-XXXX-Y]**  **RIN 2060-AQ58**

**National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source**  **Performance Standards for Stationary Internal Combustion Engines**

**AGENCY:** Environmental Protection Agency (EPA).

**ACTION:** Proposed rule.

**SUMMARY:** The EPA is proposing amendments to the national emission standards for hazardous air pollutants for stationary reciprocating internal combustion engines under section 112 of the Clean Air Act. The proposed amendments include alternative testing options for certain large spark ignition (generally natural gas-fueled) stationary reciprocating internal combustion engines, management practices for a subset of existing spark ignition stationary reciprocating internal combustion engines in sparsely populated areas and alternative monitoring and compliance options for the same engines in populated areas. ThePage 2 of 197 EPA is also proposing to include a limited temporary allowance for existing stationary emergency area source engines to be used for peak shaving and non-emergency demand response. In addition, the EPA is proposing to increase the hours that stationary emergency engines may be used for emergency demand response. Theproposed amendments also correct minor mistakes in the preexisting regulations.

**DATES** : Comments . Comments must be received on or before [INSERT DATE 45 DAYS AFTER PUBLICATION IN THE FEDERAL REGISTER], or 30 days after date of public meeting if later. Public Meeting . If anyone contacts us requesting to speak at a public meeting by [INSERT DATE 7 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER], a public meeting will be held on [INSERT DATE 15 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. If you are interested in attending the public meeting, contact Ms. Pamela Garrett at (919) 541-7966 to verify that a meeting will be held.

**ADDRESSES** : Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2008-0708, by one of the following methods:

 www.regulations.gov: Follow the on-line instructions for submitting comments.

 Email: a-and-r-docket@epa.gov.

 Fax: (202) 566-1741.

 Mail: Air and Radiation Docket and Information Center,Page 3 of 197 Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW, Washington, DC 20460. Please include a total of two copies. The EPA requests a separate copy also be sent to the contact person identified below (see **FOR FURTHER INFORMATION CONTACT** ).

 Hand Delivery: Air and Radiation Docket and Information Center, U.S. EPA, Room B102, 1301 Constitution Avenue, NW, Washington, DC. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of

boxed information.

Instructions : Direct your comments to Docket ID No. EPA-HQ-OAR2008-0708. The EPA’s policy is that all comments received will be included in the public docket without change and may be made available on-line at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov website is an “anonymous access” system, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without goingPage 4 of 197 through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contactinformation in the body of your comment and with any disk or CDROM you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. Public Meeting : If a public meeting is held, it will be held at the EPA’s campus located at 109 T.W. Alexander Drive in Research Triangle Park, NC or an alternate site nearby.

Docket : All documents in the docket are listed in the www.regulations.gov index. The EPA also relies on documents inDocket ID Nos. EPA-HQ-OAR-2002-0059, EPA-HQ-OAR-2005-0029, EPAHQ-OAR-2005-0030, and EPA-HQ-OAR-2010-0295, and incorporated those dockets into the record for this action. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically inPage 5 of 197 www.regulations.gov or in hard copy at the Air and Radiation Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566- 1744, and the telephone number for the Air Docket is (202) 566-

1742.

**FOR FURTHER INFORMATION CONTACT:** Ms. Melanie King, Energy Strategies Group, Sector Policies and Programs Division (D243- 01), Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number (919) 541-2469; facsimile number (919) 541-5450; email address king.melanie@epa.gov.

**SUPPLEMENTARY INFORMATION** : Organization of This Document

. The following outline is provided to aid in locating information in the preamble.

I. General Information A. Executive Summary B. Does this action apply to me? C. What should I consider as I prepare my comments for the EPA? II. Summary of Proposed Amendments A. Total Hydrocarbon Compliance Demonstration Option B. Emergency Demand Response/Peak Shaving C. Non-Emergency Stationary SI RICE Greater than 500 HP Located at Area Sources D. Stationary Agricultural RICE in San Joaquin Valley E. Remote Areas of Alaska F. Miscellaneous Corrections and Revisions G. Compliance Date III. Summary of Environmental, Energy and Economic Impacts A. What are the air quality impacts? B. What are the cost impacts? C. What are the benefits?Page 6 of 197 D. What are the non-air health, environmental and energy impacts? IV. Solicitation of Public Comments and Participation V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act of 1995 E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks H. Executive Order 13211: Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations

**I. General Information** A. Executive Summary 1. Purpose of the Regulatory Action The purpose of this action is to propose amendments to the national emission standards for hazardous air pollutants (NESHAP) for stationary reciprocating internal combustion engines (RICE) under section 112 of the Clean Air Act (CAA). This proposal was developed to address certain issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments and other communications. This proposal also provides

clarifications and corrects minor mistakes in the current RICE NESHAP and revises the new source performance standards (NSPS)Page 7 of 197 for stationary engines, 40 CFR part 60, subparts IIII and JJJJ, for consistency with the RICE NESHAP. This action is conducted under the authority of section 112 of the CAA, “Hazardous Air Pollutants,” (HAP) which requires the

EPA to establish NESHAP for the control of hazardous air pollutants (HAP) from both new and existing sources in regulated source categories. 2. Summary of the Major Provisions of the Regulatory Action After promulgation of the 2010 RICE NESHAP amendments, the EPA received several petitions for reconsideration, legal challenges, and other communications raising issues of practical implementability, and certain factual information that had not been brought to the EPA’s attention during the rulemaking. The

EPA has considered this information and believes that amendments to the rule to address certain of these issues are appropriate. Therefore, the EPA is proposing to amend 40 CFR part 63, subpart ZZZZ, NESHAP for Stationary RICE. The current regulation applies to owners and operators of existing and new stationary RICE at major and area sources of HAP emissions. The applicability of the rule remains the same and is not changed by this proposal. The EPA is also proposing to amend the NSPS for stationary engines to conform with certain of the amendments proposed for

the NESHAP.Page 8 of 197 The EPA proposes to add an alternative compliance demonstration option for stationary 4-stroke rich burn (4SRB) spark ignition (SI) engines subject to a 76 percent or more formaldehyde reduction. Owners and operators of 4SRB engines would be permitted to demonstrate compliance with the 76 percent formaldehyde reduction emission standard by testing total hydrocarbon (THC) emissions and showing that the engine is achieving at least a 30 percent reduction of THC emissions. The alternative compliance option would provide a less expensive and less complex, but equally effective, method for demonstrating compliance than testing for formaldehyde. Certain stationary RICE are maintained in order to be able to respond to emergency power needs. The EPA proposes to allow owners and operators of such stationary emergency RICE to operate their engines as part of an emergency demand response program within the 100 hours per year that is already permitted for maintenance and testing of the engines. The 100 hours per year allowance would ensure that a sufficient number of hours are permitted for engines to meet independent system operator (ISO) and regional transmission organization (RTO) tariffs and other requirements for participating in various emergency demand response programs and would assist in stabilizing the grid, preventing electrical blackouts and supporting local electric system reliability. A temporary limited allowance that willPage 9 of 197 expire on April 16, 2017, is being proposed for stationary emergency engines located at area sources of HAP emissions to be used for up to 50 hours per year for any non-emergency purpose, including peak shaving. The 50 hours is part of the 100 hours per year total allowance for all types of emergency engine operation (except during emergencies where no other power is available, which is not restricted by the rule). The temporary allowance for peak shaving would give sources time to address reliability issues and develop solutions to reliability issues while facilities are coming into compliance with the National

Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units, which were promulgated on February 16, 2012 (77 FR 9304). The EPA proposes management practices for owners and operators of existing stationary 4-stroke SI engines above 500 horsepower (HP) that are area sources of HAP emissions and where the engines are remote from human activity. A remote area is defined as either a Department of Transportation (DOT) Class 1 pipeline location 1 , or, if the facility is not on a pipeline, if within a 0.25 mile radius of the facility there are 5 or less

1 DOT’s definition of a Class 1 location applies to remote areas along natural gas pipelines (49 C.F.R. § 192.5). For purposes of this proposed rule, a Class 1 location is defined as an offshore area or any class location unit along a natural gas or a hazardous liquid pipeline that has 10 or fewer buildings intended for human occupancy. Deleted: APage 10 of 197 buildings intended for human occupancy. The EPA proposes that these sources be subject to management practices rather than aftertreatment-forcing standards and associated testing and monitoring. This would address reasonable concerns with accessibility, infrastructure, and staffing that stem from the remoteness of the engines and higher costs that would be associated with compliance with the existing requirements. The EPA proposes that existing stationary 4-stroke SI engines above 500 HP at area sources that are in populated areas (defined as DOT pipeline Class 2 through Class 4 areas, or if not on a pipeline, if within a 0.25 mile radius of the facility there are more than 5 buildings intended for human occupancy) be subjectto an equipment standard that requires the installation of HAPreducing aftertreatment. Sources would be required to test their engines to demonstrate compliance initially, perform catalyst activity check-ups, and either monitor the catalyst inlet temperature continuously or employ high temperature shutdown devices to protect the catalyst. To address how certain existing compression ignition (CI) engines are currently regulated, the EPA proposes to specify that any existing certified CI engine above 300 HP at an area

source of HAP emissions that was certified to meet the Tier 3 engine standards and was installed before June 12, 2006, is in compliance with the NESHAP. This provision would createPage 11 of 197 regulatory consistency between the same engines installed before and after June 12, 2006. The EPA is proposing amendments to the requirements for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are subject to state and locally enforceable requirements requiring replacement of the engine by January 1, 2018. This is meant to deal with a specific concern regarding the interaction of the NESHAP with certain rules for agricultural engines in the San Joaquin Valley in California. The EPA is proposing to allow these engines to meet management practices under the RICE NESHAP for a period of 2 years until May 3, 2015. This provision would deal with the issue of owners and operators having to install controls on their engines in order to meet the RICE NESHAP, and then having to replace their engines shortly thereafter due to state and local rules specifying the replacement of engines. Owners and operators will have two additional years to replace their engines without having to install controls, but will be required to use management practices during that period. The last major change the EPA proposes to make is to

broaden the definition of remote area sources of Alaska in the RICE NESHAP. Currently, remote areas are those that are not on the Federal Aid Highway System (FAHS). This change would permit existing stationary CI engines at other remote area sources inPage 12 of 197 Alaska to meet management practices as opposed to emission standards likely necessitating aftertreatment. These remote areas have the same challenges as areas not on the FAHS, and complying with the current rule would similarly be prohibitively costly and potentially infeasible. In addition to area sources located in areas of Alaska that are not accessible by the FAHS being defined as remote and subject to management practices, the EPA also proposes that any stationary RICE in Alaska meeting all of the following conditions be subject to management practices: (1) The only connection to the FAHS is through the Alaska Marine Highway System (AMHS), or the stationary RICE operation is within an isolated grid in Alaska that is not connected to the statewide electrical grid referred to as the Alaska Railbelt Grid, and (2) At least 10 percent of the power generated by the stationary RICE on an annual basis is used for residential purposes, and (3) The generating capacity of the area source is less than 12 megawatts, or the stationary RICE is used exclusively for backup power for renewable energy and is used less than 500 hrs per year on a 10 year rolling average.

3. Costs and Benefits These proposed amendments would reduce the capital and annual costs of the original 2010 amendments by $287 million andPage 13 of 197 $139 million, respectively. The EPA estimates that with the proposed amendments, the capital cost of the rule is $840 million and the annual cost is $490 million ($2010). These proposed amendments would also result in decreases to the reductions estimated in 2013 from the original 2010 RICE

NESHAP amendments. The estimated reductions in 2013 from the 2010 RICE NESHAP rulemaking with these proposed amendments are 2,800 tons per year (tpy) of HAP, 36,000 tpy of carbon monoxide (CO), 2,800 tpy of particulate matter (PM), 9,600 tpy of nitrogen oxide (NOx), and 36,000 tpy of volatile organic compounds (VOC).

The EPA estimates the monetized co-benefits in 2013 of the original 2010 RICE NESHAP amendments with these proposed amendments incorporated to be $830 million to $2,100 million (2010 dollars) at a 3-percent discount rate and $740 million to $1,800 million (2010 dollars) at a 7-percent discount rate. B. Does this action apply to me? Regulated Entities . Categories and entities potentially regulated by this action include: Category NAICS 1 Examples of regulated entities Any industry using a stationary internal combustion engine as defined in the 2211 Electric power generation, transmission, or distribution. 622110 Medical and surgical hospitals.

48621 Natural gas transmission.Page 14 of 197 proposed amendments. 211111 Crude petroleum and natural gas production. 211112 Natural gas liquids producers. 92811 National security.

1 North American Industry Classification System.

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. To determine whether your engine is regulated by this action, you should examine the applicability criteria of this proposed rule. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding **FOR FURTHER INFORMATION CONTACT**

section. C. What should I consider as I prepare my comments for the EPA? 1. Submitting CBI . Do not submit this information to the EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to the EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the

comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordancePage 15 of 197 with procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI to only the following address: Ms. Melanie King, c/o OAQPS Document Control Officer (Room C404-02), U.S. EPA, Research Triangle Park, NC 27711, Attention Docket ID No. EPA-HQ-OAR-2008-0708. 2. Tips for Preparing Your Comments. When submitting comments,

remember to: (a) Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number). (b) Follow directions. The EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number. (c) Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. (d) Describe any assumptions and provide any technical information and/or data that you used. (e) If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. (f) Provide specific examples to illustrate your concerns, and suggest alternatives. (g) Explain your views as clearly as possible, avoiding the use of profanity or personal threats.Page 16 of 197 (h) Make sure to submit your comments by the comment period

deadline identified.

Docket . The docket number for this proposed rule is Docket ID No. EPA-HQ-OAR-2008-0708. World Wide Web (WWW) . In addition to being available in the docket, an electronic copy of this proposed rule will be posted on the WWW through the Technology Transfer Network Website (TTN Web). Following signature, the EPA will post a copy of this proposed rule on the TTN’s policy and guidance page for newly proposed or promulgated rules at http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. **II. Summary of Proposed Amendments** This action proposes amendments to the NESHAP for RICE in 40 CFR part 63, subpart ZZZZ. This action also proposes amendments to the NSPS for stationary engines in 40 CFR part 60, subparts IIII and JJJJ. The NESHAP for stationary RICE to regulate emissions of HAP was developed in several stages. The EPA initially addressed stationary RICE greater than 500 HP located at major sources of HAP emissions in 2004 (69 FR 33473). The EPA addressed new stationary RICE less than or equal to 500 HP located at major sources and new stationary RICE located at area sources in 2008 (73 FR 3568). Most recently, requirements for existing stationary RICE less than or equal to 500 HPPage 17 of 197 located at major sources and existing stationary RICE located at area sources were finalized in 2010 (75 FR 9648 and 75 FR 51570). The EPA is proposing to address a number of issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments, and other communications. The EPA is also proposing to revise 40 CFR part 60, subparts IIII and JJJJ for consistency

with the RICE NESHAP and to make minor corrections and clarifications. The following sections present the issues that the EPA is addressing in this action, background information as to why these issues are causing concern among affected stakeholders, and how the EPA proposes to resolve the issues.

A. Total Hydrocarbon Compliance Demonstration Option 1. Background Currently, SI 4SRB non-emergency engines greater than 500 HP located at major sources and existing SI 4SRB non-emergency engines greater than 500 HP located at area sources have the option of meeting either a formaldehyde percent reduction or a formaldehyde concentration standard. Formaldehyde was established in the original 2004 RICE NESHAP as an appropriate surrogate for HAP emissions from 4SRB engines based on industry test data available at that time. Based on testing of stationary lean burn engines conducted at Colorado State University (CSU),Page 18 of 197 the EPA was able to establish CO as a surrogate for HAP for lean burn engines. Rich burn engines were not tested at CSU and the

data the EPA had available at the time that were used to set the standards for rich burn engines did not support the same relationship between CO and HAP reductions for rich burn engines. Therefore, the EPA was unable to establish CO as a surrogate for HAP emissions for rich burn engines and the emission standard for rich burn engines was specified in terms of formaldehyde, the hazardous air pollutant emitted in the largest quantity from stationary engines. The EPA has previously acknowledged that it is significantly more expensive and difficult to test for formaldehyde than for CO, but has been unable in the past to support including the same flexibility for rich burn engines as is currently in the rule for lean burn engines with the option to meet the standards in terms of either formaldehyde or CO. For these reasons and expecting that new data for rich burn engines may become available in the future for the EPA to review and reassess possible surrogates for HAP, the EPA requested comment on this issue when proposing NESHAP for stationary existing engines less than or equal to 500 HP at major sources and all stationary existing engines at area sources in 2009 (74 FR 9698). Specifically, the EPA solicited comment on whether it would be appropriate to include an alternative standard in termsPage 19 of 197 of VOC and asked that commenters submit data supporting the relationship between HAP and VOC. Comments the EPA received back on the proposed rule asked that the formaldehyde standards for rich burn engines be replaced with emission standards for THC. The EPA determined at the time that it was not appropriate to adopt an alternative standard in terms of THC (or VOC) for rich burn engines and discussed the reasons why in the 2010 responses

to comments. 2 Compliance with the formaldehyde standard in the rule is, therefore, currently demonstrated by initial and continuous performance testing for formaldehyde. On October 19, 2010, engine manufacturer Dresser-Waukesha submitted a petition for reconsideration of the formaldehyde requirements. The EPA granted the petition for reconsideration on January 5, 2011. (In addition, on November 3, 2010, the Engine Manufacturers Association submitted a petition for judicial review of these requirements.) In the petition for reconsideration, Dresser-Waukesha argued that formaldehyde is difficult and costly to measure. The petition requested that the HAP surrogate for 4SRB engines should be THC rather than

2 Memorandum from Melanie King, EPA Energy Strategies Group to EPA Docket EPA-HQ-OAR-2008-0708. Response to Public Comments on Proposed National Emission Standards for Hazardous Air Pollutants for Existing Stationary Reciprocating Internal Combustion Engines Located at Area Sources of Hazardous Air Pollutant Emissions or Have a Site Rating Less Than or Equal to 500 Brake HP Located at Major Sources of Hazardous Air Pollutant Emissions. August 10, 2010. EPA-HQ-OAR-2008-0708-0557.Page 20 of 197 formaldehyde. Dresser-Waukesha submitted data from testing it conducted illustrating that THC reduction across the catalyst is an appropriate surrogate for HAP reduction across the catalyst. 3 According to the petitioner, testing for THC is easier and less costly and would substantially reduce the burden of the rule for owners and operators of these engines. Testing for formaldehyde emissions could cost more than double that of testing for THC

emissions and on a nationwide basis the EPA estimates that replacing formaldehyde testing with THC testing would result in substantial compliance cost savings annually while achieving the

same reduction in HAP emissions.The EPA has reviewed the data submitted by DresserWaukesha. The data provided indicate that a strong relationship exists between percentage reductions of THC and percentage reductions of formaldehyde (the surrogate for HAP emissions in the NESHAP) on rich burn engines using non-selective catalytic reduction (NSCR). Data analyzed by the EPA indicate that if the NSCR is reducing THC by at least 30 percent from 4SRB engines, formaldehyde emissions are guaranteed to be reduced by at least 76 percent, which is the percentage reduction required for the relevant engines. Indeed, the percentage reduction of formaldehyde is invariably well above the 76 percent level, and

3 Letter from Dresser-Waukesha to Melanie King. Follow-up toNovember 18, 2010 Teleconference. December 6, 2010. EPA-HQ-OAR2008-0708-0662.Page 21 of 197 is usually above 90 percent. Therefore, the EPA agrees with the petitioner that for SI 4SRB engines using NSCR and meeting the NESHAP by showing a percentage reduction of HAP, it would be appropriate to allow sources to demonstrate compliance with the NESHAP by showing a THC reduction of at least 30 percent. Including an optional THC compliance demonstration option would reduce the cost of compliance significantly while continuing to

achieve the same level of HAP emission reduction because the emission standards would remain the same. Consequently, the EPA is proposing amendments to allow owners and operators of certain stationary 4SRB engines (i.e., the ones currently subject to a formaldehyde percent reduction requirement) to show compliance with an optional THC compliance demonstration option. The specific amendments the EPA is proposing are presented below.

2. Proposed Amendments The EPA is proposing to add an alternative method of demonstrating compliance with the NESHAP for stationary 4SRB non-emergency engines greater than 500 HP that are located at major sources of HAP emissions and for existing stationary 4SRB non-emergency engines greater than 500 HP that are located at

area sources of HAP emissions that choose to meet the formaldehyde percent reduction requirement of 76 percent or

more.Page 22 of 197 Based on the arguments and evidence presented in the petition discussed above, the EPA is proposing to add a compliance demonstration option for stationary 4SRB engines meeting a 76 percent or more formaldehyde reduction. The compliance demonstration option would be an alternative to the existing method of demonstrating compliance with the formaldehyde percent reduction standard, which is to test engines for formaldehyde. The alternative for owners and operators of 4SRB engines meeting a 76 percent or more formaldehyde reduction would be to test their engines for THC showing that the engine is achieving at least a 30 percent

reduction of THC emissions. Under the proposed amendments, existing and new stationary 4SRB engines greater than 500 HP and located at major sources would still be required to reduce formaldehyde emissions by 76 percent or more or limit the concentration of formaldehyde in the stationary RICE exhaust to 350 parts per billion by volume, dry basis or less at 15 percent oxygen (O 2 ). However, owners and operators choosing to meet the formaldehyde concentration limit would not have the THC demonstration compliance option, because EPA could not verify a clear relationship between concentrations of THC and concentrations of formaldehyde in exhaust from these SI 4SRB engines. For the reasons discussed in section II.C.1 of this preamble, the EPA is proposing that existing stationaryPage 23 of 197 4SRB non-emergency engines greater than 500 HP located at area sources located in populated areas be subject to an equipment standard and required to install a catalyst. These engines would be subject to testing to demonstrate initially and on an ongoing basis that the catalyst is reducing CO by 75 percent or more, or alternatively that THC emissions are being reduced by 30 percent

or more. Owners and operators of existing stationary 4SRB engines less than or equal to 500 HP who are required to limit the concentration of formaldehyde in the stationary RICE exhaust to 10.3 parts per million by volume, dry basis (ppmvd) or less at 15 percent O 2 do not have the option to demonstrate compliance using THC and must continue to demonstrate compliance by testing for formaldehyde following the methods and procedures specified

in the rule. Owners and operators opting to use the THC compliance demonstration method must demonstrate compliance by showing that the average reduction of THC is equal to or greater than 30 percent. Owners and operators of 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions and demonstrating compliance by using the THC compliance demonstration option must conduct performance testing using Method 25A of 40 CFR part 60, appendix A – Determination of Total Gaseous Organic Concentration Using a Flame IonizationPage 24 of 197 Analyzer. Measurements of THC at the inlet and the outlet of the NSCR must be on a dry basis and corrected to 15 percent O 2 or equivalent carbon dioxide content. To correct to 15 percent O 2 , dry basis, owners and operators must measure oxygen using Method 3, 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00 (2005) and measure moisture using Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03. Because owners and operators are complying with a percent reduction requirement, the method used must be suitable for the entire range of emissions since pre and post-catalyst emissions must be measured. Method 25A is capable of measuring emissions down to 5 ppmv and is, therefore, an appropriate method for measuring THC emissions for compliance demonstration purposes. The EPA is allowing sources the option to meet a minimum THC percent reduction of 30 percent by using Method 25A of 40 CFR part 60, appendix A to demonstrate compliance with the formaldehyde percent reduction in 40 CFR part 63, subpart ZZZZ. B. Emergency Demand Response/Peak Shaving 1. Background This action also proposes to amend provisions in the RICE NESHAP that currently allow owners and operators to operate stationary emergency engines for up to 15 hours per year as part of a demand response program if the RTO or equivalent balancing authority and transmission operator have determined there arePage 25 of 197 emergency conditions that could lead to a potential electrical blackout, such as unusually low frequency, equipment overload, capacity or energy deficiency, or unacceptable voltage level. The final rule did not allow emergency engines to be used for purposes of peak shaving or other non-emergency purposes as part of a financial arrangement. These provisions were included in the RICE NESHAP when requirements for existing stationary CI engines were finalized on March 3, 2010 (75 FR 9648). Following the completion of that portion of the rule, the EPA received three main petitions for reconsideration. One petition was from CPower, Inc., EnergyConnect, Inc., EnerNOC, Inc., and Innoventive Power, LLC. (EnerNOC et al.)(EPA-HQ-OAR-2008-0708- 0404). Another petition was received from the Delaware Department of Natural Resources and Environmental Control (DE DNREC) (EPA-HQ-OAR-2008-0708-0400). The third petition was from the National Rural Electric Cooperative Association (NRECA) (OAR-2008-0708-0580). In addition to these main petitions the

EPA received a substantial number of letters from others in the electric generation industry. The petition from EnerNOC, et al., asked that EPA increase the period of time permitted for emergency demand response operation in the rule to 60 hours per year, or the minimum number of hours required by the emergency demand response program. By contrast, the DE DNREC petition asked EPA toPage 26 of 197 reconsider the emergency demand response provision because of

the adverse effects that it believes would result from increased emissions from these engines. The petition from NRECA requested that the EPA eliminate the restriction on the use of stationary emergency engines for demand response purposes. The EPA granted the petitions from EnerNOC, et al., DE DNREC and NRECA, and issued a notice on December 7, 2010 (75 FR 75937), requesting comments on whether to amend the 15 hours per year limitation on the operation of stationary emergency RICE participating in emergency demand response programs.

The EPA received more than 120 comments from a number of different entities including various state agencies, utilities, electric cooperatives and industry organizations. Many commenters expressed that 15 hours per year is not sufficient to meet current emergency demand response requirements for participation. For example, several emergency demand response programs have ISO tariff requirements greater than 15 hours per year, including the Electric Reliability Council of Texas emergency demand response program, which has a tariff requirement of 24 hours per year; the Pennsylvania Jersey Maryland (“PJM”) Interconnection, known as the Emergency Load Response Program, which has a tariff requirement of 60 hours per year; and the ISO New England (“ISO-NE”), which forecasts that backup resources would be expected for 55 hours over a 12-monthPage 27 of 197 period. Tariff requirements are developed to specify the mandatory time load resources (engines) must be willing and able to operate if the units are enrolled in the program. Conversely, some commenters urged the EPA to allow stationary emergency engines to only operate during true emergencies or when voltage or frequency varies beyond specified parameters. Based on the EPA’s review of the petitions and comments that the EPA has received, the EPA has found it appropriate to propose to amend the current rule to increase the allowance for stationary emergency engine participation in emergency demand response programs to up to 100 hours per year, which would be included as part of the pre-existing allowance of 100 hours for owners of emergency engines to test and maintain their emergency engines. The EPA believes that the emergency demand response programs that exist across the country are important programs that protect the reliability and stability of the national electric service grid. Allowing stationary emergency engines to operate as part of emergency demand response programs can help prevent grid failure or blackouts, by allowing these engines to be used in circumstances of grid instability prior to the occurrence of blackouts. Preventing stationary emergency engines from being able to qualify and participate in emergency demand response programs without having to apply aftertreatment could force owners and operators to leave their engines out of thesePage 28 of 197 programs, which will impair the ability of ISOs and RTOs to use these relatively small, quick-starting and reliable sources of energy to protect the reliability of their systems. The EPA does not wish to potentially jeopardize electrical reliability or create a disincentive for stationary emergency engines to participate in these programs. The circumstances during which the EPA would allow stationary emergency engines to operate for emergency demand response purposes include periods during which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency, plus during periods where there is a deviation of voltage or frequency of 5 percent or more below standard voltage or frequency. During EEA Level 2 alerts there is insufficient energy supply and a true potential for electrical blackouts. System operators must call on all available resources during EEA Level 2 alerts in order to stabilize the grid to prevent failure. Therefore, this situation is a good indicator of severe instability on the system. Consistent normal voltage provided by the utility is often called power quality and is an important factor in local electric system reliability. Reliability of the system requires electricity being provided at a normal expected voltage. ThePage 29 of 197 American National Standards Institute standard C84.1-1989 defines the maximum allowable voltage sag at below 5 percent. On the local distribution level local voltage levels are therefore important and a 5 percent or more change in the normal voltage or frequency is substantial and an indication that additional resources are needed to ensure local distribution system reliability. This situation would be indicative of severe instability on the system. Emergency demand response programs rely on agreements under which owners of engine agree to make their engines available to be called upon for a specific number of hours per year, as required by the relevant ISO or RTO tariff, under specified circumstances considered to indicate emergencies. In order to be enrolled in an emergency demand response program, participants must qualify their engines and must be able to use their emergency engines for the number of hours the program requires. Engines are not generally called upon for the maximum hours required by the tariffs. However, even though the engine may not be called at all or may run for fewer hours than the program requires it to be available in a particular year, the engine

must still be available for those theoretical number of hours in order to join the program. Demand response contracts require more hours than the 15 hours per year that is currently in the regulations, and the commenters state that the 15 hours per yearPage 30 of 197 is not a sufficient amount of time to ensure the reliability of the program; some programs require up to 60 hours per year, as discussed earlier in this preamble. For these reasons, the EPA believes it is appropriate to allow additional hours for emergency demand response operation in order for such programs to be accessible to stationary emergency engines. Consequently, the EPA is proposing amendments to the rule to increase the limitation on emergency demand response operation to 100 hours per year for stationary emergency engines. It is expected that owners and operators of stationary emergency engines that seek to qualify their units as demand resources would with the proposed increase to 100 hours per year be able to meet the operational and qualification requirements of the different ISOs and RTOs in the country. As stated, stationary emergency engines that participate in demand response programs may not be called upon at all, but must nonetheless be available to operate for the required amount stipulated by the specific program. The purpose of the limited allowance for emergency demand response is to respond to emergencies, and the EPA is persuaded by the information that has been submitted that 15 hours per year is an insufficient amount of time to allow for emergency demand response needs, given past experience. The EPA believes 100 hours per year is sufficient to cover any potential demand response operation asPage 31 of 197 well as the required maintenance and testing that is also included within the 100 hours of operation. The EPA has previously determined that stationary emergency engines typically operate well below 50 hours per year and more commonly about 1 to 2 hours per month. A survey conducted by the California Air Resources Board (CARB) indicated the average yearly operation for emergency diesel engines was 31 hours over a period of 3 years. The majority of those hours were for the purpose of maintenance and testing; less than 5 hours was for interruptible service contracts, and the remaining amount for emergency/standby operation (EPA-HQ-OAR-2005-0029-0011). Data from demand response programs in ISO-NE and PJM territories show that backup generation was dispatched for less than 30 hours during the summers of 2008, 2009 and 2010. 4 However, again, emergency units must be available to operate more than that in most cases to qualify for demand response programs. For instance, PJM requires a minimum ISO tariff of 60 hours per year of engine availability for program participation. Consequently, in order to ensure that a sufficient amount of operating time is available for maintenance and readiness testing, and for demand response operation, the EPA is proposing 100 hours of operation. A number of commenters

4 Memorandum from Stacy Angel, Synapse Energy Economics, Inc. to Doug Hurley, Synapse Energy Economics. Sample Revenue for a 1 MW Backup Generation Unit. June 27, 2011.Page 32 of 197 requested that an allowance of 100 hours per year be allowed in order to provide adequate hours consistent with minimum required hours that customers must be available to operate and to address local distribution system emergencies. For instance, in Hawaii, the emergency demand response program operated by the Hawaiian Electric Company requires that emergency engines be able to operate for 100 hours per year in the event of an emergency in order to participate in the program. In order to provide a

sufficient amount of time to cover annual maintenance and testing, which is typically more than 20 hours per year according to the survey conducted by CARB (see EPA-HQ-OAR-2005- 0029-0011), plus to cover hours necessary for qualifying for emergency demand response programs or local distribution system emergencies, EPA believes an allowance of 100 hours per year would be appropriate for these activities. Taking into account that there may be situations where annual maintenance and testing could exceed the typical 1 to 2 hours per month and accounting for other emergency demand response programs that require more than 60 hours per year for program participation (e.g., the Hawaiian Electric Company), the EPA believes that 100 hours per year is appropriate for emergency demand response plus maintenance and testing. The proposed amendment to the rule would mean that stationary emergency engines could operate for a total of 100Page 33 of 197 hours per year for emergency demand response operation as part of the 100 hours already permitted for maintenance and readiness testing while maintaining their status as emergency units, rather than non-emergency units, and continue to meet the requirements that apply to emergency engines. On the issue of peak shaving and non-emergency demand response, the EPA is proposing to include a temporary limited allowance for peak shaving and other types of non-emergency use as part of a financial arrangement for existing stationary emergency engines at area sources of HAP, if the peak shaving is done as part of a peak shaving (or load management) program with the local distribution system operator. The power generated under this allowance can only be used at the facility or towards the local system. The EPA has determined that it is appropriate to include the option for existing stationary emergency engines at area sources to operate for a small number (50) of hours per year for any non-emergency reason and not be penalized or considered a non-emergency engine and subsequently required to install aftertreatment that could be prohibitively costly for these sources in the near term. The EPA is proposing that the 50-hour allowance for peak shaving for emergency engines at area sources be allowed for a limited period of time, but then removed after April 16, 2017. The peak shaving would also be limited toPage 34 of 197 operation as part of a peak shaving (load management program) with the local distribution system operator. Owners would stillhave the pre-existing 50 hours per year allowance for nonemergency operation after April 16, 2017, but those 50 hours could no longer be used for peak shaving. The temporary allowance for peak shaving would give sources an additional resource for maintaining reliability while facilities are coming into compliance with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units (77 FR 9304). While the EPA does not expect the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units to cause regional reliability problems, this limited allowance would allow the owners and operators of these engines more flexibility to run reliability critical units in order to minimize potential grid-related interruptions as coal- and oil-fired baseload power plants may be temporarily shut down to install emission controls to comply with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units. Including this allowance is important for small electric cooperatives and other entities located at area sources that use these engines to maintain voltage and electric reliability. Many rural electric cooperatives enter agreements with owners of small emergency engines and rely on the engines to reduce demand on the central power supply during periods of high demand, which reduces the cost of power during periods of high demand for thePage 35 of 197 members of the cooperative. Commenters promoting the continued use of peak shaving programs said that maintaining the cost of power as low as possible is important across the country, but is particularly of significant importance to rural electric cooperatives that, according to the commenter, service customers in the most economically depressed areas of the country, where options are the most limited. The commenters argued that if small emergency engines would no longer be permitted to operate for peak shaving purposes without having to be reclassified as non-emergency engines and subsequently subject to costly emissions controls, owners could no longer afford to participate in such programs. Cooperatives argued that this would lead to increased costs that would ultimately be passed along to the customers. Commenters also maintained that keeping peak shaving programs would not lead to additional public health risks or emissions because the operation for peak shaving is minimal. If peak shaving is not allowed under the rule, commenters said that this would lead to an increase in central power station capacity and possibly more transmission and distribution line capacity to accommodate the increase in demand resulting from eliminating small emergency engines from being used. This could lead to a larger impact on the environment and public health than allowing a small number of hours for peak shaving purposes. Certain small and remote facilities also rely on financial programs toPage 36 of 197 generate additional income in order to maintain their engines and stay in operation. The additional funds can be essential for many smaller facilities and operations. Providing a limited allowance for peak shaving and non-emergency demand response could generate sufficient income to prevent small facilities and owners from ceasing operation where these engines are in service. In order to further limit the operation of these engines to small, remote facilities, the EPA is proposing that the power generated under this allowance can only be used at the facility or towards the local system. In addition, while the EPA is proposing this allowance until the end of April 16, 2017, the EPA does not believe it is appropriate to continue the program beyond that time. Generators receive considerable compensation for their availability in peak shaving programs and the EPA believes that it is not appropriate to allow these engines to continue receiving compensation for this non-emergency use beyond 2017 without having to reduce their emissions. The generators must by that time decide whether to restrict their use to emergency or limited non-compensated non-emergency use or to reduce the emissions from their engines. The EPA also encourages engine owners and operators, as well as larger system planners, to consider the use of alternative peak shaving options, such as load curtailments, lower emitting distributedPage 37 of 197 generation, combined heat and power, and reduced line losses on the electricity grid. The previous estimate of emissions from stationary emergency engines is not expected to change due to this proposed limited allowance. To estimate emissions from stationary emergency engines, the EPA has previously estimated that emergency engines would on average operate for 50 hours per year. There is a wide range in how much these engines operate (some well below 50 hours per year), but on average and to be conservative, the EPA believes that 50 hours per year is still representative and consequently the environmental impact the EPA has calculated previously remains appropriate. In consideration of all these issues, the EPA is proposing amendments to the rule to provide a limited allowance for peak shaving for existing stationary emergency engines at area sources of HAP. The specific amendments the EPA is proposing are discussed below. 2. Proposed Amendments a. Emergency Demand Response. Based on the discussion in section II.B.1 of this preamble, the EPA is proposing to revise the current provisions for stationary engines used for emergency demand response operation. The provisions the EPA is proposing to amend are in §§63.6640(f) and 63.6675 of 40 CFR part 63, subpart ZZZZ. Currently, §63.6640(f)(1)(iii) allows a maximum of 15 hours per year to be spent towards demand response operationPage 38 of 197 under certain qualifying conditions. Also, §63.6640(f)(1)(ii) currently includes an allowance of 100 hours per year for purposes of maintenance checks and readiness testing. The EPA is proposing that owners and operators of stationary emergency RICE be permitted to operate their engines as part of an emergency demand response program within the 100 hours per year that is permitted for maintenance and testing in §63.6640(f)(1)(ii). Owners and operators of stationary emergency engines can operate for emergency demand response during periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an EEA Level 2 as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency and during periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. The hours spent for emergency demand response operation are added to the hours spent for maintenance and testing purposes and counted towards the 100 hours per year. If the total time spent for demand response operation and maintenance and testing exceeds 100 hours per year the engine will not be considered an emergency engine under this subpart and will need to meet all requirements for non-emergency engines. The EPA is recognizing that these engines may be called to operate not only by the regional transmission operator orPage 39 of 197 equivalent to maintain the reliability of the bulk power system, but also by the local transmission and distribution system operators to support the local power systems. For stationary emergency engines above 500 HP that were installed prior to June 12, 2006, there is currently no emergency demand response allowance and there is no time limit on the use of emergency engines for routine testing and maintenance in §63.6640(f)(2)(ii). Those engines were not the focus of the 2010 RICE NESHAP amendments; therefore, the EPA did not make any changes to the requirements for those engines as part of the 2010 amendments. For consistency, the EPA is now also proposing that owners and operators of stationary emergency engines installed prior to June 12, 2006, be permitted to operate their engines as part of a demand response program as well for a total of 100 hours per year, including time spent for maintenance and testing. The EPA is also proposing to amend the NSPS for stationary CI and SI engines in 40 CFR part 60, subparts IIII and JJJJ, respectively, to provide the same allowance for stationary emergency engines for emergency demand response operation as for engines subject to the RICE NESHAP. The NSPS regulations currently do not include such an allowance for emergency demand response operation. For the reasons discussed in section II.B of this preamble as to why the EPA finds it appropriate to allowPage 40 of 197 stationary emergency engines to participate in emergency demand response programs and remain being considered emergency units, and for consistency across engine regulations, the EPA is proposing to add an emergency demand response allowance under the NSPS regulations. Consequently, the EPA is proposing to revise the existing language in §§60.4211(f) and 60.4219 of 40 CFR part 60, subpart IIII, and §§60.4243(d) and 60.4248 of 40 CFR part 60, subpart JJJJ, to specify that emergency engines may participate in demand response programs for up to 100 hours per year, including hours spent towards maintenance and testing of the emergency engines. b. Peak Shaving and other Non-emergency Use as Part of a Financial Arrangement. In addition to the changes the EPA is proposing related to emergency demand response operation, the EPA is also including a further provision for owners and operators of existing stationary emergency RICE located at area

sources for the reasons discussed in section II.B.1 of this preamble. Paragraph §63.6640(f) currently allows owners and operators of emergency stationary RICE to operate their engine for 50 hours per year in non-emergency situations. As currently written, the 50 hours per year for non-emergency situations cannot be used for peak shaving or to generate income for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity;Page 41 of 197 except that owners and operators of certain emergency engines may operate the engine for a maximum of 15 hours per year as part of an emergency demand response program. As discussed, the 15 hours per year allowance for emergency engines to participate in emergency demand response programs is being increased to 100 hours per year, but will also include hours spent towards maintaining and conducting readiness testing of the emergency engines. However, additionally, the EPA is also proposing that stationary emergency engines located at area sources be permitted to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any non-emergency operation, including operation as part of a financial agreement with another entity. The peak shaving allowance would expire in 2017. The EPA is specifying that the power can only be used at the facility or towards the local system, and the engine can only be operated for peak shaving as part of a program with the local distribution system operator. The EPA is also clarifying that an engine that exceeds the calendar year limitations on non-emergency operation, including emergency demand response or peak shaving, will be considered anon-emergency engine and subject to the requirements for nonemergency engines for the remaining life of the engine. C. Non-Emergency Stationary SI RICE Greater than 500 HP Located

at Area SourcesPage 42 of 197 1. Background The EPA is also proposing to amend the requirements that apply to existing stationary non-emergency 4 stroke SI RICE greater than 500 HP located at area sources of HAP emissions, which are generally natural gas fired engines. Currently, the RICE NESHAP requires owners and operators of such engines to 1) either meet a CO concentration limit of 47 parts ppmvd at 15 percent O 2 or reduce emissions of CO by 93 percent or more, if the engines are 4SLB; and 2) to meet a formaldehyde concentration limit of 2.7 ppmvd at 15 percent O 2 or reduce formaldehyde emissions by 76 percent or more, if the engines are 4SRB. In both cases, the EPA expects that the standards would be met using aftertreatment; oxidation catalysts for 4SLB engines and NSCR for 4SRB engines. In addition to these emission requirements, owners and operators of existing stationary 4- stroke engines greater than 500 HP at area sources are also subject to monitoring, testing, recordkeeping and reporting requirements. After the final requirements for existing stationary SI engines greater than 500 HP at area sources were published on August 20, 2010 (75 FR 51570), the EPA received petitions from Exterran (EPA-HQ-OAR-2008-0708-0581), the American Petroleum Institute (EPA-HQ-OAR-2008-0708-0582), the Interstate Natural Gas Association of America (EPA-HQ-OAR-2008-0708-0584), and thePage 43 of 197 Gas Processors Association (EPA-HQ-OAR-2008-0708-0587) requesting that the EPA reconsider the requirements of the final rule. The petitioners expressed many similar concerns. As relevant to this rulemaking, petitioners stated that the EPA did not take into account the difference in population density and subsequently did not consider the difference in health impacts in remote versus more heavily populated locations. In the petitioners’ opinion, there should be less concern about engines that are located farther away from people; the petitioners believed that the EPA has substantial latitude in requiring less stringent standards for owners and operators of stationary engines in remote areas.

While the EPA does not share all of the views of the petitioners regarding the difference between engines based on their location, the EPA does believe that it is reasonable to create a subcategory of existing stationary SI 4SLB and 4SRB engines above 500 HP located in areas remote from human activity. Engines located in remote areas that are not close to significant human activity may be difficult to access, may not have electricity or communications, and may be unmanned most of the time. The costs of the emission controls, testing, and continuous monitoring requirements may be unreasonable when compared to the HAP emission reductions that would be achieved, considering that the engines are in sparsely populated areas.Page 44 of 197 The EPA believes that establishing a subcategory for SI engines at area sources of HAP located in sparsely populated areas accomplishes the agency’s goals and is adequate in protecting public health. The EPA is proposing to subcategorize sparsely populated engines using the existing DOT classification system for natural gas pipelines . This system classifies locations based on their

distance to natural gas pipelines covered by the Pipeline and Hazardous Materials Safety Administration safety regulations. The DOT system defines a class location unit as an onshore area that extends 220 yards or 200 meters on either side of the centerline of any continuous 1-mile (1.6 kilometers) length of natural gas pipeline. The DOT approach further classifies pipeline locations into Class 1 through Class 4 locations based on the number of buildings intended for human occupancy. A Class 1 location is defined as an offshore area or any class location unit that has 10 or fewer buildings intended for human occupancy. Stakeholders from the oil and gas industry have indicated to the EPA that the DOT system is well-established and there would be substantial overlap between engines on natural gas pipelines affected by the rule and covered by the DOT pipeline classification system. Incorporating this approach

would also create harmonization between the EPA and DOT and would reduce the implementation and enforcement burden for Deleted: pipelinePage 45 of 197 states. Implementation for affected sources would also be less burdensome because the system is already in place and used by the natural gas pipeline industry and covers the majority of these engines. Stakeholders have indicated they are required to

review the class location status of natural gas pipeline segments annually. The EPA believes this approach is reasonable for defining the subcategory of remote engines for those engines

that are associated with both natural gas and hazardous liquid pipelines. For those engines not associated with pipelines, the EPA is using similar criteria. An engine would be considered to be in sparsely populated areas if within 0.25 mile radius of the engine there are 5 or fewer buildings intended for human

occupancy. The EPA is proposing management practices as generally available control technologies for existing stationary SI 4SLB and 4SRB area source non-emergency engines located in sparsely populated areas. Given the remote location of the engines from human activity, the EPA believes that it is appropriate not to include requirements that would necessitate aftertreatment and extensive testing and monitoring. The EPA has previously estimated that the costs of oxidation catalyst for existing 4SLB and 4SRB engines above 500 HP at area sources are $310 and $150 million, for capital and annual costs, respectively. The capital and annual costs of the RICE NESHAP for existing 4SLB and 4SRB Deleted: DOT-regulatedPage 46 of 197 engines above 500 HP at area sources would be $30 million and $12 million, respectively, if these proposed amendments are incorporated into the rule. Creating a subcategory of these engines for the ones located in sparsely populated areas and not mandating emission controls would significantly reduce the cost of the rule for such engines.For existing stationary SI 4SLB and 4SRB area source nonemergency engines that are located in populated areas, the EPA is proposing an equipment standard that requires the installation and operation of a catalyst that will have to be tested initially and annually to ensure that the catalyst is working properly and reducing emissions as required. In addition, these units will be required to have devices to shut down the engine if the catalyst is exposed to dangerous temperatures or have continuous monitoring equipment installed to record catalyst inlet temperatures. The EPA is proposing shorter test duration and less rigorous methods than currently required while still ensuring that HAP reductions remain at expected levels for these engines located in populated areas. The specific amendments the EPA is proposing are discussed

below. 2. Proposed Amendments Owners and operators of engines in sparsely populated areas would have to conduct a review of the surrounding areaPage 47 of 197 every 12 months to determine if the nearby population has changed. If the engine no longer meets the criteria for a sparsely populated area the owner and operator must within 1 year comply with the emission standards specified below for populated areas. Owners and operators of existing stationary 4SLB and 4SRB greater than 500 HP at area sources that are in sparsely populated areas as described above would be required to perform the following:

 Change oil and filter every 1,440 hours of operation or annually, whichever comes first;

 Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary;

and

 Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as

necessary. Sources have the option to use an oil analysis program as described in §63.6625(i) of the rule in order to extend the specified oil change requirement. The oil analysis must be performed at the same frequency specified for changing the oil in Table 2d of the rule. The analysis program must at a minimum analyze the following three parameters: Total Acid Number, viscosity, and percent water content. The condemning limits for these parameters are as follows: Total Acid Number increases byPage 48 of 197 more than 3.0 milligrams of potassium hydroxide per gram from Total Acid Number of the oil when new; viscosity of the oil has changed by more than 20 percent from the viscosity of the oil when new; or percent water content (by volume) is greater than 0.5. If all of these condemning limits are not exceeded, the engine owner or operator is not required to change the oil. If any of the limits are exceeded, the engine owner or operator must change the oil within 2 days of receiving the results of the analysis; if the engine is not in operation when the results of the analysis are received, the engine owner or operator must change the oil within 2 days or before commencing operation, whichever is later. The owner or operator must keep records of the parameters that are analyzed as part of the program, the results of the analysis, and the oil changes for the engine. The analysis program must be part of the maintenance plan for the engine. Owners and operators of existing stationary 4SLB and 4SRB area source engines above 500 HP in sparsely populated areas would also have to operate and maintain the stationary RICE and aftertreatment control device (if any) according to the manufacturer's emission-related written instructions or develop their own maintenance plan which must provide to the extent practicable for the maintenance and operation of the engine in aPage 49 of 197 manner consistent with good air pollution control practice for minimizing emissions. For engines in populated areas, i.e., existing stationary 4SLB and 4SRB non-emergency engines greater than 500 HP at area sources that are located on DOT Class 2 through Class 4 pipeline segments or, for engines not associated with pipelines, that do not meet the 0.25 mile radius with 5 or less buildings criteria, the EPA is proposing to adopt an equipment standard requiring the installation of a catalyst to reduce HAP emissions. Owners and operators of existing area source 4SLB non-emergency engines greater than 500 HP in populated areas would be required to install an oxidation catalyst. Owners and operators of existing area source 4SRB non-emergency engines greater than 500 HP in populated areas would be required to install NSCR. Owners and operators must conduct an initial test to demonstrate that the engine achieves at least a 93 percent reduction in CO emissions or a CO concentration level of 47 ppmvd at 15 percent O 2 , if the engine is a 4SLB engine. Similarly, owners and operators must conduct an initial performance test to demonstrate that the engine achieves at least a 75 percent CO reduction or a 30 percent THC reduction, if the engine is a 4SRB engine. The

initial test must consist of three test runs. Each test run must be of at least 15 minute duration, except that each test run conducted using the proposed appendix A to 40 CFR part 63,Page 50 of 197 subpart ZZZZ must consist of one measurement cycle as defined by the method and include at least 2 minutes of test data phase measurement. To measure CO, emission sources must use the CO methods already specified in subpart ZZZZ, or the proposed appendix A to 40 CFR part 63, subpart ZZZZ. The THC testing must be conducted using EPA Method 25A. The owner or operator of both engine types must also use a high temperature shutdown device that detects if the catalyst inlet temperature is too high, or, alternatively, the owner or operator can monitor the catalyst inlet temperature continuously and maintain the temperature within the range specified in the rule. For 4SLB engines the catalyst inlet temperature must remain at or above 450°F and at or below 1,350°F. For 4SRB engines the temperature range must be greater than or equal to 750°F and less than or equal to 1,250°F at the catalyst inlet. Owners and operators must in addition to the initial performance test conduct annual checks of the catalyst to ensure proper catalyst activity. The annual check of the catalyst must at a minimum consist of one 15-minute run using the methods discussed above, except that each test run conducted using the proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the method and include at least 2 minutes of test data phase measurement. Owners and operators of 4SLB engines must demonstrate during the catalystPage 51 of 197 activity test that the catalyst achieves at least a 93 percent reduction in CO emissions or that the engine exhaust CO emissions are no more than 47 ppmvd at 15 percent O 2 . Owners and operators of 4SRB engines must demonstrate that their catalyst is reducing CO emissions by 75 percent or more, or alternatively, that THC emissions are being reduced by at least 30 percent during the catalyst activity check. If the emissions from the engine do not exceed the levels required for the initial test or annual checks of the catalyst, then the catalyst is considered to be working properly. If the emissions exceed the specified pollutant levels in the rule, the exceedance(s) is/are not considered a violation, but the owner or operator would be required to shut down the engine and take appropriate corrective action (e.g., repairs, clean or replace the catalyst, as appropriate). A follow-up test must be conducted within 7 days of the engine being started up again to demonstrate that the emission levels are being met. If the retest shows that the emissions continue to exceed the specified levels, the stationary RICE must again be shut down as soon as safely possible, and the engine may not operate, except for purposes of start-up and testing, until the owner/operator demonstrates through testing that the emissions do not exceed the levels specified. D. Stationary Agricultural RICE in San Joaquin ValleyPage 52 of 197 In the 2010 amendments to the RICE NESHAP, the EPA required existing non-emergency CI engines above 300 HP to meet a standard of either 70 percent reduction of CO emissions or 49 ppmvd CO, for engines between 300 and 500 HP, or 23 ppmvd CO for engines above 500 HP. The requirements also included testing and monitoring provisions. As with all requirements for existing engines in that rule, owners and operators were required to meet the requirements within 3 years of the effective date of the regulations (May 3, 2013). Since the finalization of the rule for existing stationary CI engines, stakeholders from the agricultural industry in the San Joaquin Valley area of California have expressed concern regarding the effect of certain of these requirements on engines in the San Joaquin Valley. The San Joaquin Valley Air Pollution Control District (APCD) has indicated that there are 17 stationary CI engines at area sources in San Joaquin Valley certified to the Tier 3 standards in 40 CFR part 89 that were installed between January 1 and June 12, 2006. Under the NESHAP, stationary CI engines at area sources are existing if construction of the engine commenced prior to June 12, 2006. These 17 Tier 3 engines in the San Joaquin Valley, which were built to meet stringent emission standards, would not be able to comply with the applicable RICE NESHAP emission standards for existing engines without further testing and monitoring, andPage 53 of 197 possible retrofit with further controls, due to differences in the emission standards and testing protocols in the RICE NESHAP versus the Tier 3 standards in 40 CFR part 89. However, an identical engine certified to the Tier 3 standards (or Tier 2 standards for engines above 560 kilowatts (kW)) in 40 CFR part 89 that was installed after June 12, 2006, would not have to be retrofit in order to comply with the NESHAP. Stationary CI engines installed after June 12, 2006, at area sources of HAP are required to comply with the NSPS for stationary CI engines, which requires engines to be certified to the standards in 40 CFR parts 89, 94, 1039, and 1042, as applicable. Thus, a 2006 model year stationary CI engine installed after June 12, 2006, that is certified to the applicable standards would meet the requirements of the NESHAP without further controls or testing. While the EPA does not know if other certified Tier 3 engines besides these 17 engines in the San Joaquin Valley were installed prior to June 12, 2006, EPA believes the same rationale should apply to any such engine. The EPA believes that the Tier 3 standards (Tier 2 for engines above 560 kW) are technologically stringent regulations and believes it is unnecessary to require further regulation of engines meeting these standards. Engines meeting the Tier 3 standards typically employed emission control technologies such as combustion optimization and better fuel control to meet thePage 54 of 197 Tier 3 standards. In order to address the concerns raised by the engine owners in the San Joaquin Valley, the EPA is proposing changes to amend the requirements for any certified Tier 3 (Tier 2 for engines above 560 kW) stationary CI engine located at an area source and installed before June 12, 2006. The EPA is proposing amendments to specify that any existing certified Tier 3 (Tier 2 for engines above 560 kW) CI engine that was installed before June 12, 2006, is in compliance with the NESHAP. This amendment would include any existing stationary Tier 3 (Tier 2 for engines above 560 kW) certified CI engine located at an area

source of HAP emissions. Another concern brought to the EPA’s attention by the San Joaquin Valley agricultural industry is that due to state and local requirements in the San Joaquin Valley, many of the Tier 1 and Tier 2 stationary CI engines that are regulated as existing sources under the NESHAP must be replaced in the next few years, only a short time after the emission standards for existing engines must be met. Specifically, the San Joaquin Valley APCD rule for internal combustion engines (Rule 4702) requires Tier 1 and Tier 2 certified engines to meet Tier 4 standards by January 1, 2015, or 12 years after the installation date, but no later than June 1, 2018. The concern is that owners and operators of these engines would have to install aftertreatment by 2013 to meet the emission standards of the RICE NESHAP and then only aPage 55 of 197 few years later be required to replace their engines per San Joaquin Valley APCD Rule 4702. The San Joaquin Valley APCD has identified 49 Tier 1 engines and 360 Tier 2 engines that are scheduled to be replaced under the local rule. The EPA has not identified any engines outside the San Joaquin Valley APCD area that are in the same or similar situation (i.e., required to be replaced shortly after the compliance date for existing engines), but the EPA does not preclude the possibility that there are such engines in other areas, and requests comment and information on other areas that may have similar concerns. The EPA does not think it is appropriate to require emission controls on a stationary CI engine that is going to be retired only a short time after the rule goes into effect. Stationary CI engines would have to comply with this rule by May 3, 2013, and owners of engines above 300 HP are expected to have to install aftertreatment on their engines in order to meet the

emission standards. The EPA estimates that the one-time cost to equip a 500 HP stationary CI engine with the controls necessary

to meet the emission standards under this rule is close to $14,000 and more than $3,000 on a yearly basis, not accounting for additional costs associated with monitoring, testing, recordkeeping and reporting. These engines (equipped with aftertreatment) could end up being in operation for less than 2 years or at most only 5 years before having to be replaced withPage 56 of 197 a certified Tier 4 engine, as required by San Joaquin Valley District Rule 4702. It would not be reasonable to require the engine owner to invest in costly controls and monitoring equipment for an engine that will be replaced shortly after the

installation of the controls. Consequently, the EPA is proposing amendments to existing stationary CI engines located at area sources of HAP emissions to address this concern. The EPA is proposing to amend the requirements for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are greater than 300 HP that are subject to a state or local rule that requires the engine to be replaced. The EPA is proposing to allow these engines to meet management practices for a period of 2 years starting with the applicable May 3, 2013, compliance date. The EPA believes a period of 2 years is appropriate and provides owners enough time to replace their engines without mandating a possibly cost prohibitive requirement to change all of the engines in a short amount of time, while still requiring that replacement of the engine or a retrofit of the engine occur relatively quickly after the owner would have to comply with the NESHAP. The EPA is proposing that these engines be subject to management practices until May 3, 2015, after which time the CO emission standards discussed above (and that are in Table 2d of the rule) apply. The management practices include requirementsPage 57 of 197 for when to inspect and replace the engine oil and filter, air cleaner, hoses and belts. The complete details of which management practices are required are shown in Table 2d of the rule. Owners and operators of these existing stationary CI engines located at area sources of HAP emissions that intend to meet management practices rather than the emission limits prior to May 3, 2015, must submit a notification by March 3, 2013, stating that they intend to use this provision and identifying the state or local regulation that the engine is subject to.

E. Remote Areas of Alaska 1. Background The RICE NESHAP currently specifies less stringent requirements for existing non-emergency CI engines at area

sources located in remote areas of Alaska. Remote areas are defined as those not accessible by the FAHS. The FAHS includes areas with year-round ferry service that are not on the contiguous road system. Under the current regulation, stationary non-emergency CI engines at area sources in areas of Alaska that are not accessible by the FAHS are subject to management practices as opposed to numerical emission standards. Following the publication of the final rule in 2010, the EPA received requests to expand the definition of remote areas

of Alaska. Stakeholders asserted that facilities in areas that are accessible by the FAHS but are not connected to the AlaskaPage 58 of 197 Railbelt grid face the same challenges as those in areas not accessible by the FAHS. The Alaska Railbelt Grid refers to the service areas of the six regulated public utilities that extend from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are the Golden Valley Electric Association, Chugach Electric Association, Matanuska Electric Association, Homer Electric Association, Anchorage Municipal Light & Power, and the City of Seward Electric System. According to the stakeholders, one reason for broadening the definition of remote areas in Alaska is high energy costs, which provide a natural incentive to run CI engines as little as possible. The cost of energy is utilities’ greatest concern in Alaska. Also, the stakeholders

indicated that extreme weather conditions in certain areas of Alaska is another reason for including additional areas in the

definition of remote areas of Alaska. The climate issue is unique to remote areas of Alaska that experience some of the most extreme temperatures in the country. Heavy snowfall and high winds are not uncommon in several areas that are accessible by the FAHS. For instance, Copper Valley Electric Association (CVEA) is a utility accessible by the FAHS, but it includes areas that face the same challenges as other communities not accessible by the FAHS. The utility operates on an isolated grid and relies on diesel power generation. In one of CVEA’s territories, Valdez, Alaska, CVEA indicated that this areaPage 59 of 197 experiences brutal conditions and stated that Valdez is considered to have the greatest snowfall (326 inches per winter) in any city of the United States. Also, winds at more than 100 miles per hour are not uncommon for Valdez, Alaska, according to CVEA. Temperatures between 40 and 50 below zero are also not abnormal, which emphasizes the extreme reliance on power, CVEA asserted. Travel times and accessibility are issues on a regular basis, but can be additionally exacerbated due to severe weather, which in some cases may lead to avalanches and road closings. In particular, even if a site is on the FAHS, in the event of poor weather conditions and road closings, there are in many cases no alternate roads to travel on. Further, access to specific isolated sites can also be problematic in particular remote areas of Alaska and the problems are unique to Alaska because of the infrastructure and environment. For example, communities made the case that sources along the AMHS that are only accessible by the AMHS should be treated the same way as communities not accessible by the FAHS. The AMHS primarily serves passengers and vehicles, and is not intended for transporting goods. Therefore, the same methods used to bring in goods to communities not on the FAHS are the same as those Alaskan villages served only by the AMHS. Goods are typically brought in to remote communities by barge and this is another example of a scenario that is unique to Alaska. Other argumentsPage 60 of 197 for expanding the definition of remote areas of Alaska beyond those not accessible by the FAHS include very low population density in many other remote areas although accessible by the FAHS, and the fact that many of these areas are not connected to the electric grid and rely on back up diesel generation to support fluctuating renewable energy systems. The energy supply system is another area that is particularly different in Alaska compared to the rest of the country where the majority of customers are connected to the grid. Therefore, for the reasons discussed, the EPA is proposing expansion of the remote area source category. This proposal is supported by the Alaska Department of Environmental Conservation and communities with

whom the EPA has discussed this issue. 2. Proposed Amendments The EPA is proposing to expand the current definition of remote areas of Alaska to extend beyond areas that are not accessible by the FAHS. Specifically, the EPA is proposing that areas of Alaska that are accessible by the FAHS and that meet all of the following criteria are also considered remote and subject to management practices under the rule:

 The stationary CI engine is located in an area not connected to the Alaska Railbelt Grid,

 At least 10 percent of the power generated by the engine per year is used for residential purposes, andPage 61 of 197

 The system capacity is less than 12 megawatts, or the engine is used exclusively for backup power for renewable energy and is used less than 500 hours per year on a 10- year rolling average. The EPA is proposing limiting the remote classification to engines that are used at least partially for residential purposes, where the impact of higher energy costs is of greatest

concern. The classification is further limited to sources that are used infrequently as backup for renewable power, or that are at smaller capacity facilities, which are generally in more sparsely populated areas.

F. Miscellaneous Corrections and Revisions The EPA is making some minor corrections to the stationary engine rules to address miscellaneous issues. The EPA is making

some minor revisions in the rules to correct mistakes in the current rules or to clarify the rules. The revisions are as

follows:

 Revising Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ to correct language requiring the pressure drop to be at plus or minus 10 percent 100 percent load for all engines. The engines that were regulated in 2010 are not subject to the load requirements and therefore the EPA is correcting

these tables to make this clear.Page 62 of 197

 Adding a footnote to Table 1b of 40 CFR part 63, subpart ZZZZ stating that sources can petition the Administrator for a different temperature range consistent with Table 2b

of the rule.

 Correcting rows 8 and 10 in Table 2d of 40 CFR part 63, subpart ZZZZ to indicate that the requirements apply to non-emergency, non-black start stationary RICE greater than 500 HP that are 4SLB and 4SRB that operate more than 24 hours per year, as intended in the original rule.

 Revising the language in §63.6625(b) of 40 CFR part 63, subpart ZZZZ that states “...in paragraphs (b)(1) through (5) of this section” to “in paragraphs (b)(1) through (6)

of this section.”

 Changing Tables 2c and 2d of 40 CFR part 63, subpart ZZZZ, where it currently specifies to inspect air cleaner, to also specify that it must be replaced as necessary.

 Revising §63.6620(b) of 40 CFR part 63, subpart ZZZZ to indicate that testing must be conducted within plus or minus 10 percent of 100 percent load for stationary RICE greater than 500 HP located at a major source (except existing non-emergency CI stationary RICE greater than 500 HP located at a major source) that are subject to testing.Page 63 of 197

 Specifying that, as was intended in the rule adding these requirements, the operating limitations (pressure drop and catalyst inlet temperature) in Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ do not have to be met during startup.

 For consistency, and as provided in the original RICE NESHAP for other stationary RICE, clarifying in 40 CFR part 63, subpart ZZZZ that the existing stationary RICE regulated in 2010 (i.e., engines constructed before June 12, 2006 that are less than or equal to 500 HP located at major sources or engines located at area sources) must burn landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis in order to qualify as a landfill or digester gas engine under the

rule.

 Clarifying §60.4207(b) of 40 CFR part 60, subpart IIII to specify that owners and operators of stationary CI engines less than 30 liters per cylinder that are subject to the subpart that use diesel fuel must use diesel fuel that meets the requirements of 40 CFR 80.510(b), except owners and operators may use up any diesel fuel acquired prior to October 1, 2010, that does not meet the requirements of 40 CFR 80.510(b) for nonroad diesel fuel.

 Adding appendix A to 40 CFR part 63, subpart ZZZZ, which includes procedures that can be used for measuring COPage 64 of 197 emissions from existing stationary 4SLB and 4SRB stationary

RICE above 500 HP located at area sources of HAP that are complying with the emission limits in Table 2d of 40 CFR part 63, subpart ZZZZ.

 Reinstating the footnotes for Table 2 of 40 CFR part 60, subpart JJJJ. The footnotes were inadvertently removed when the rule was amended on June 28, 2011 (76 FR 37954).

 Adding “part 60” in Table 4 of the NESHAP, in row 2 where it refers to 40 CFR appendix A.

 Clarifying in §63.6625(a) of 40 CFR part 63, subpart ZZZZ that a continuous emission monitoring system is only required to be installed at the outlet of the control device for engines that are complying with the requirement

to limit the concentration of CO.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(b) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that use gasoline.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(c) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that are rich burn engines that use LPG.Page 65 of 197

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(d) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that are not gasoline engines or rich burn engines that use LPG. G. Compliance Date The EPA has received questions regarding whether the compliance dates for engines impacted by the 2010 amendments and this proposed reconsideration will be extended. Affected sources that may be impacted by this action have expressed concern about having sufficient time to comply with the rule by the compliance date, which is May 3, 2013, for existing stationary CI RICE and October 19, 2013, for existing stationary SI RICE. Sources impacted by this reconsideration are particularly concerned with compliance in the event that the EPA does not finalize changes that are substantially similar to the changes being proposed in this action. The EPA does not intend to extend the May 3, 2013, and October 19, 2013, compliance dates, because there are many engines that must meet those compliance dates that are not impacted by this reconsideration. However, the EPA notes that sources that are affected by the reconsideration and that may need additional time to install controls to comply with the applicable requirements can request up to an additional year to install controls, as specified in 40 CFR 63.6(i).Page 66 of 197 **III. Summary of Environmental, Energy and Economic Impacts**

A. What are the air quality impacts? The EPA estimates that the rule with the proposed amendments incorporated will reduce emissions from existing stationary RICE as shown in Table 1 of this preamble. The emissions reductions the EPA previously estimated for the 2010 amendments to the RICE NESHAP are shown for comparison. Reductions are shown for the year 2013, which is the first year the final RICE NESHAP will be implemented for existing stationary RICE. **Table 1. Summary of Reductions for Existing Stationary RICE**

**Pollutant Emission R**  **e ductions (tpy)**  **in the year 2013**

**2010 Final Rule 2**  **010 Final Rule with these Proposed**  **Amendments CI SI CI SI**  **HAP** 1,014 6,008 1,005 1,778 **CO** 14,342 109,321 14,238 22,211 **PM** 2,844 N/A 2,818 N/A **NO x**  N/A 96,479 N/A 9,648 **VOC** 27,395 30,907 27,142 9,147

The EPA estimates that more than 900,000 stationary CI engines will be subject to the rule in total, but only a small number of stationary CI engines are affected by the proposed amendments in this action. It is estimated that approximately 330,000 stationary SI engines will be subject to the rule in total; however, only a subset of stationary SI engines arePage 67 of 197 affected by the proposed amendments in this action. The decrease in estimated reductions for SI engines is primarily due to proposed amendments to the requirements for existing 4SRB and 4SLB SI engines larger than 500 HP at area sources of HAP that are in remote areas. Those engines were required by the 2010 rule to meet emission limits that were expected to require the installation of aftertreatment to reduce emissions; under these proposed amendments, those engines are required to meet management practices that would not require the installation of aftertreatment. Further information regarding the estimated

reductions of this final rule can be found in the memorandum titled, “RICE NESHAP Reconsideration Amendments - Cost andEnvironmental Impacts,” which is available in the docket (EPAHQ-OAR-2008-0708). The EPA did not estimate any reductions associated with the minor changes to the NSPS for stationary CI and SI engines. B. What are the cost impacts? The proposed amendments are expected to reduce the overall cost of the original 2010 RICE NESHAP amendments. The EPA estimates that with these proposed amendments incorporated the cost of the rule for existing stationary RICE will be as shown in Table 2 of this preamble. The costs the EPA previously

estimated for the 2010 amendments to the RICE NESHAP are shown for comparison.Page 68 of 197 **Table 2. Summary of Cost Impacts for Existing Stationary RICE**

**Engine 2010 Final Rule**  **2010 Final Rule with these Proposed Amendments**  **Total Annual Cost SI**  $253 million ($2009) $115 million ($2010) **CI** $373 million ($2008) $373 million ($2010) **Total Capital Cost SI**  $383 million ($2009) $103 million ($2010) **CI** $744 million ($2008) $740 million ($2010) Further information regarding the estimated cost impacts of the proposed amendments, including the cost of the proposed amendments in 2010 dollars, can be found in the memorandum titled, “RICE NESHAP Reconsideration Amendments - Cost andEnvironmental Impacts,” which is available in the docket (EPAHQ-OAR-2008-0708). The EPA did not estimate costs associated with the changes to the NSPS for stationary CI and SI engines. The changes to the NSPS are minor and are not expected to impact

the costs of those rules.

C. What are the benefits? Emission controls installed to meet the requirements of these rules will generate benefits by reducing emissions of HAP as well as criteria pollutants and their precursors, including CO, NOx and VOC. NOx and VOC are precursors to PM 2.5 (particles smaller than 2.5 microns) and ozone. The criteria pollutant

benefits are considered co-benefits for these rules. For these rules, we were only able to quantify the health co-benefitsPage 69 of 197 associated with reduced exposure to PM 2.5 from emission reductions of NOx and directly emitted PM 2.5 . The EPA previously estimated that the monetized co-benefits in 2013 of the stationary CI NESHAP would be $940 million to $2,300 million (2008 dollars) at a 3-percent discount rate and $850 million to $2,100 million (2008 dollars) at a 7-percent

discount rate. 5 For stationary SI engines, EPA previously estimated that the monetized co-benefits in 2013 would be $510 million to $1,200 million (2009 dollars) at a 3-percent discount rate) and $460 million to $1,100 million (2009 dollars) at a 7- percent discount rate. 6 The proposed amendments are expected to reduce the overall emission reductions of the rules. In addition to revising the anticipated emission reductions, we have also updated the methodology used to calculate the co-benefits to be consistent with methods used in more recent rulemakings, which is summarized below and discussed in more detail in the Regulatory Impact Analysis (RIA). We estimate the monetized co-benefits of

5 U.S. Environmental Protection Agency. 2010. Regulatory Impact Analysis (RIA) for Existing Stationary Compression Ignition Engines NESHAP: Final Draft . Research Triangle Park, NC. February. http://www.epa.gov/ttn/ecas/regdata/RIAs/CIRICENESHAPRIA2-17- 0cleanpublication.pdf. 6 U.S. Environmental Protection Agency. 2010. Regulatory Impact Analysis (RIA) for Existing Stationary Spark Ignition (SI) RICE NESHAP: Final Report . Research Triangle Park, NC. August. http://www.epa.gov/ttn/ecas/regdata/RIAs/riceriafinal.pdf.Page 70 of 197 the proposed amendments of the CI NESHAP in 2013 to be $770 million to $1,900 million (2010 dollars) at a 3-percent discount rate and $690 million to $1,700 million (2010 dollars) at a 7- percent discount rate. For SI engines, we estimate the monetized co-benefits of the proposed amendments in 2013 to be $62 million to $150 million (2010 dollars) at a 3-percent discount rate and $55 million to $140 million (2010 dollars) at a 7-percent

discount rate. Using alternate relationships between PM 2.5 and premature mortality supplied by experts, higher and lower co-benefits estimates are plausible, but most of the expert-based estimates

fall between these two estimates. 7 A summary of the monetized cobenefits estimates for CI and SI engines at discount rates of 3 percent and 7 percent is in Table 3 of this preamble.

7 Roman, et al. , 2008. Expert Judgment Assessment of the Mortality Impact of Changes in Ambient Fine Particulate Matter in the U.S. , Environ. Sci. Technol., 42, 7, 2268 – 2274.Page 71 of 197 Table 3. Summary of the Monetized PM 2.5 Co-Benefits for Proposed Amendments to the NESHAP for Stationary CI and SI Engines (millions of 2010 dollars) a

Pollutant Emission reductions

(tons per

year) Total monetized co-benefits

(3 percent Discount) Total monetized co-benefits

(7 percent Discount) Stationary CI Engines Directly emitted PM 2.5 2,818 $770 to $1,900 $690 to $1,700 Stationary SI Engines NOx 9,648 $62 to $150 $55 to $140

a All estimates are for the analysis year (2013) and are rounded to two significant figures so numbers may not sum across rows. The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . It is important to note that the monetized co-benefits do not include reduced health effects from exposure to HAP, direct exposure to NO 2 , exposure to ozone, ecosystem effects or visibility impairment. b PM co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. These co-benefits estimates represent the total monetized human health benefits for populations exposed to less PM 2.5 in 2013 from controls installed to reduce air pollutants in order

to meet these rules. To estimate human health co-benefits of these rules, the EPA used benefit-per-ton factors to quantify the changes in PM 2.5 -related health impacts and monetized benefits based on changes in directly emitted PM 2.5 and NOx emissions. These benefit-per-ton factors were derived using the general approach and methodology laid out in Fann, Fulcher, andPage 72 of 197 Hubbell (2009). 8 This approach uses a model to convert emissions

of PM 2.5 precursors into changes in ambient PM 2.5 levels and another model to estimate the changes in human health associated with that change in air quality, which are then divided by the emission reductions to create the benefit-per-ton estimates. However, for these rules, we utilized source apportionment air quality modeling of emissions in the “Non-EGU Point other” category because we do not have modeling specifically for stationary engines. 9 We apply these national benefit-per-ton estimates calculated for this sector separately for directly

emitted PM 2.5 and NOx and multiply them by the corresponding emission reductions. The sector-specific modeling does not provide estimates of the PM 2.5 -related benefits associated with reducing VOC emissions, but these unquantified benefits are generally small compared to other PM 2.5 precursors. More information regarding the derivation of the benefit-per-ton estimates for this category is available in the technical support document, which is available in the docket. These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing

8 Fann, N., C.M. Fulcher, B.J. Hubbell. 2009. The influence of location, source, and emission type in estimates of the human health benefits of reducing a ton of air pollution . Air Qual Atmos Health (2009) 2:169–176. 9 U.S. Environmental Protection Agency. 2012. Technical support document: Estimating the benefit per ton of reducing PM 2.5 precursors from other point sources

. Research Triangle Park, NC.Page 73 of 197 premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. The main PM 2.5 precursors affected by these rules are directly emitted PM 2.5 and NO X . Even though we assume that allfine particles have equivalent health effects, the benefit-perton estimates vary between precursors depending on the location and magnitude of their impact on PM 2.5 levels, which drive population exposure. For example, directly emitted PM 2.5 has a lower benefit-per-ton estimate than direct PM 2.5 because it does

not form as much PM 2.5 ; thus, the exposure would be lower, and

the monetized health benefits would be lower. It is important to note that the magnitude of the PM 2.5 cobenefits is largely driven by the concentration response function for premature mortality. Experts have advised the EPA to consider a variety of assumptions, including estimates based both on empirical (epidemiological) studies and judgments elicited from scientific experts, to characterize the uncertainty in the relationship between PM 2.5 concentrations and premature mortality. We cite two key empirical studies, one based on the American Cancer Society cohort study 10 and the

10 Pope, et al. , 2002. Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine Particulate Air Pollution

. Journal of the American Medical Association 287:1132-1141.Page 74 of 197 extended Six Cities cohort study. 11 In the RIA for this proposed amendments rule, which is available in the docket, we also include benefits estimates derived from the expert judgments and other assumptions.

The EPA strives to use the best available science to support our benefits analyses. We recognize that interpretation of the science regarding air pollution and health is dynamic and evolving. After reviewing the scientific literature, we have determined that the no-threshold model is the most appropriate model for assessing the mortality benefits associated with reducing PM 2.5 exposure. Consistent with this finding, we have conformed the previous threshold sensitivity analysis to the current state of the PM science by incorporating a new “Lowest Measured Level” (LML) assessment in the RIA accompanying these rules. While an LML assessment provides some insight into the level of uncertainty in the estimated PM mortality benefits, the

EPA does not view the LML as a threshold and continues to quantify PM-related mortality impacts using a full range of modeled air quality concentrations.

Most of the estimated PM-related co-benefits for these rules would accrue to populations exposed to higher levels of

PM 2.5 . For this analysis, policy-specific air quality data are

11 Laden, et al. , 2006. Reduction in Fine Particulate Air Pollution and Mortality . American Journal of Respiratory and Critical Care Medicine 173: 667-672.Page 75 of 197 not available due to time or resource limitations, and thus, we are unable to estimate the percentage of premature mortality associated with this specific rule’s emission reductions at each

PM 2.5 level. As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the source apportionment modeling used to calculate the benefit-per-ton estimates for this sector. Using the Pope,

et al. (2002) study, 77 percent of the population is exposed to

annual mean PM 2.5 levels at or above the LML of 7.5 micrograms per cubic meter (μg/m 3 ). Using the Laden, et al. (2006) study, 25 percent of the population is exposed above the LML of 10 μg/m 3

. It is important to emphasize that we have high confidence in

PM 2.5 -related effects down to the lowest LML of the major cohort studies. This fact is important, because, as we model avoided premature deaths among populations exposed to levels of PM 2.5 , we have lower confidence in levels below the LML for each study. Every benefit analysis examining the potential effects of a change in environmental protection requirements is limited, to some extent, by data gaps, model capabilities (such as geographic coverage) and uncertainties in the underlying scientific and economic studies used to configure the benefit and cost models. Despite these uncertainties, we believe the benefit analysis for these rules provides a reasonable indication of the expected health benefits of the rulemakingPage 76 of 197 under a set of reasonable assumptions. This analysis does not include the type of detailed uncertainty assessment found in the

2006 PM 2.5 National Ambient Air Quality Standard (NAAQS) RIA because we lack the necessary air quality input and monitoring data to run the benefits model. In addition, we have not conducted air quality modeling for these rules, and using a benefit-per-ton approach adds another important source of uncertainty to the benefits estimates. The 2006 PM 2.5 NAAQS benefits analysis 12 provides an indication of the sensitivity of our results to various assumptions.

It should be noted that the monetized co-benefits estimates provided above do not include benefits from several important benefit categories, including exposure to HAP, NOx, ozone exposure, as well as ecosystem effects and visibility impairment. Although we do not have sufficient information or modeling available to provide monetized estimates for these proposed amendments, we include a qualitative assessment of these unquantified benefits in the RIA for these proposed

amendments.

12 U.S. Environmental Protection Agency, 2006. Proposed amendments Regulatory Impact Analysis: PM 2.5 NAAQS . Prepared by Office of Air and Radiation. October. Available on the Internet at http://www.epa.gov/ttn/ecas/ria.html

.Page 77 of 197 For more information on the benefits analysis, please refer to the RIA for these proposed amendments, which is available in

the docket. D. What are the non-air health, environmental and energy impacts? The EPA does not anticipate any significant non-air health, environmental or energy impacts as a result of these proposed

amendments. **IV. Solicitation of Public Comments and Participation** The EPA seeks full public participation in arriving at its final decisions, and strongly encourages comments on all aspects of this proposed rule from all interested parties. Whenever applicable, full supporting data and detailed analysis should be

submitted to allow the EPA to make maximum use of the comments. The agency invites all parties to coordinate their data collection activities with the EPA to facilitate mutually

beneficial and cost-effective data submissions. A redline/strikeout version of the complete NESHAP for stationary RICE, which shows the changes that are being proposed in this action, is available from the rulemaking docket. The EPA is seeking specific comment on the proposal to temporarily allow stationary emergency engines located at area sources to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any typePage 78 of 197of non-emergency operation, including peak shaving and nonemergency demand response if the peak shaving is done as part of a peak shaving (load management) program with the local distribution system operator. The EPA is proposing that the allowance be removed after April 16, 2017. The EPA recognizes that the electricity grid achieves demand response and grid stability with and without the use of emergency stationary RICE. Alternative approaches include reductions or shifts in energy use, electricity storage, distribution automation, microgrids, natural gas-fired combustion turbines, and grid-connected distributed generation, including non-emergency engines and combined heat and power. Many of these approaches can provide additional benefits, such as additional energy efficiency, lower costs, shorter electricity outage times, and better integration of renewable energy generation into the electricity grid. Several studies project a significant future potential for using less energy in homes, buildings, and industry during times of peak electricity demand. The EPA seeks comment on how these investments may affect the number of hours which emergency stationary RICE are needed in the future to address electricity peak shaving and grid stability. The EPA is also specifically seeking comment on the proposed criteria for expanding the current definition of remotePage 79 of 197 areas of Alaska beyond areas that are not accessible by the FAHS. The EPA requests comment on whether the proposed system capacity limitation of 12 megawatts and the alternative 500 hour cap on annual usage (based on a 10-year rolling average) are the appropriate criteria for distinguishing the areas of Alaska that, while accessible by the FAHS, have the same unique challenges as the areas that are not accessible by the FAHS. The EPA is also seeking information related to irrigation pump engine sizes. During the 2010 rulemaking, the EPA relied upon several sources to determine the potential number of irrigation engines that may be impacted by the rule. Using these sources, the EPA estimated that the vast majority of the existing irrigation engines were less than or equal to 300 HP. The EPA received several comments confirming this estimation. The EPA seeks comprehensive, nationwide information on the size of existing irrigation engines to either confirm or refute our understanding of existing irrigation engine sizes; this information will assist EPA in assessing the impacts of the 2010 rule on existing irrigation engines. **V. Statutory and Executive Order Reviews** A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory

ReviewPage 80 of 197 Under section 3(f)(1) of Executive Order 12866 (58 FR 51735, October 4, 1993), this action is an “economically significant regulatory action” because it is likely to have an annual effect on the economy of $100 million or more. Accordingly, the EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Order 12866 and Executive Order 13563 (76 FR 3821, January 21, 2011), and any changes made in response to OMB recommendations have been documented in the docket for this action. In addition, the EPA prepared a RIA of the potential costs and benefits

associated with this action. A summary of the monetized benefits, compliance costs and net benefits for the proposed amendments to the stationary CI engines NESHAP at discount rates of 3 percent and 7 percent is in Table 4 of this preamble. The summary for stationary SI engines is included in Table 5 of this preamble. Table 4. Summary of the Monetized Benefits, Compliance Costs and Net benefits for the Proposed Amendments to the Stationary CI Engine NESHAP in 2013 (millions of 2010 dollars) a 3-Percent Discount Rate 7-Percent Discount Rate Total Monetized Benefits b $770 to $1,900 $690 to $1,700 Total Compliance Costs c $373 $373 Net Benefits $400 to $1,500 $320 to $1,300

Non-Monetized Benefits Health effects from exposure to HAP Health effects from direct exposure to NO 2 and ozonePage 81 of 197

Health effects from PM 2 .5 exposure from VOC Ecosystem effects Visibility impairment

a All estimates are for the implementation year (2013) and are rounded to two significant figures. b The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . Co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.

c The engineering compliance costs are annualized using a 7- percent discount rate. Table 5. Summary of the Monetized Benefits, Compliance Costs and Net benefits for the Proposed Amendments to the Stationary SI Engine NESHAP in 2013 (millions of 2010 dollars) a 3-Percent Discount Rate 7-Percent Discount Rate Total Monetized Benefits b $62 to $150 $55 to $140 Total Compliance Costs c $115 $115 Net Benefits $-53 to $35 $-60 to $25

Non-Monetized Benefits Health effects from exposure to HAP Health effects from direct exposure to NO 2 and ozone Health effects from PM 2 .5 exposure from VOC Ecosystem effects Visibility impairment

a All estimates are for the implementation year (2013) and are rounded to two significant figures. b The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . Co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.Page 82 of 197

c The engineering compliance costs are annualized using a 7- percent discount rate. For more information on the cost-benefit analysis, please refer to the RIA for these proposed amendments, which is

available in the docket. B. Paperwork Reduction Act This action does not impose any new information collection burden. This action does not impose an information collection burden because the agency is not requiring any additional recordkeeping, reporting, notification or other requirements in these proposed amendments. The changes being proposed in this action do not affect information collection, but include revisions to emission standards and other minor issues. However, the OMB has previously approved the information collection requirements contained in the existing regulations under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0548. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless thePage 83 of 197 agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations and small governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The companies owning facilities with affected RICE can be grouped into small and large categories using SBA general size standard definitions. Size standards are based on industry classification codes (i.e., North American Industrial Classification System, or NAICS) that each company uses to identify the industry or industries in which they operate. The SBA defines a small business in terms of the maximum employment, annual sales, or annual energy-generating capacity (for electricity generating units—EGUs) of the owning entity. These thresholds vary by industry and are evaluated based on the primary industry classification of the affected companies. In cases where companies are classified by multiple NAICS codes,Page 84 of 197 the most conservative SBA definition (i.e., the NAICS code with the highest employee or revenue size standard) was used. As mentioned earlier in this preamble, facilities across several industries use affected CI and SI stationary RICE; therefore, a number of size standards are utilized in this analysis. For the 15 industries identified at the 6-digit NAICS code represented in this analysis, the employment size standard (where it applies) varies from 500 to 1,000 employees. The annual sales standard (where it applies) is as low as 0.75 million dollars and as high as 33.5 million dollars. In addition, for the electric power generation industry, the small business size standard is an ultimate parent entity defined ashaving a total electric output of 4 million megawatt-hours (MWhr) in the previous fiscal year. The specific SBA size standard is identified for each affected industry within the industry profile to support this economic analysis. After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This certification is based on the economic impact of

this action to all affected small entities across all industries affected. The percentage of small entities impacted by this proposal having annualized costs of greater than 1 percent of their sales is less than 2 percent according to the small entityPage 85 of 197 analysis. We conclude that there is no significant economic impact on a substantial number of small entities for this rule. For more information on the small entity impacts associated with the rule, please refer to the Economic Impact and Small Business Analyses in the public docket. These analyses can be found in the RIA for each of the rules affected by this action. Although the proposed reconsideration rule would not have a significant economic impact on a substantial number of small entities, EPA nonetheless tried to reduce the impact of the rule on small entities. When developing the revised standards, EPA took special steps to ensure that the burdens imposed on small entities were minimal. EPA conducted several meetings with industry trade associations to discuss regulatory options and the corresponding burden on industry, such as recordkeeping and reporting. In addition, as mentioned earlier in this preamble, EPA proposes to reduce regulatory requirements for a variety of

area sources affected under each of the RICE rules with amendments to the final RICE rules promulgated in 2010. We continue to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act of 1995 This rule does not contain a federal mandate that may result in expenditures of $100 million or more for state, local,Page 86 of 197 and tribal governments, in the aggregate, or the private sector in any one year. The EPA is proposing management practices for certain existing engines located at area sources and is proposing amendments that will provide owners and operators with alternative and less expensive compliance demonstration methods. As a result of these proposed changes, the EPA anticipates a

substantial reduction in the cost burden associated with this rule. Thus, this rule is not subject to the requirements of

sections 202 or 205 of UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The changes being proposed in this action by the agency will mostly affect stationary engine owners and operators and will not affect small governments. The proposed amendments

will lead to a reduction in the cost burden.

E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This proposed action primarily affects private industry, and does not impose significant economic costs on state or localPage 87 of 197 governments. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Order 13132 and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicits comment on this proposed action from state and local officials.

F. Executive Order 13175: Consultation and Coordination with

Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this action. The EPA specifically solicits additional comment on this proposed action from tribal officials.

G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks

The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is notPage 88 of 197 subject to Executive Order 13045 because it is based solely on technology performance. H. Executive Order 13211: Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution or Use This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action reduces the burden of the rule on owners and operators of stationary engines by providing less burdensome compliance demonstration methods to owners and operators and greater flexibility in the operation of emergency engines. As a result of these proposed changes, the EPA anticipates a substantial reduction in the cost burden

associated with this rule. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to providePage 89 of 197 Congress, through OMB, explanations when the agency decides not to use available and applicable voluntary consensus standards. This proposed rulemaking involves technical standards. The EPA proposes to use EPA Method 25A of 40 CFR part 60, appendix A. While the agency identified two voluntary consensus standards as being potentially applicable, we do not propose to use it in this rulemaking. The two candidate voluntary consensus standards, ISO 14965:2000(E) and EN 12619 (1999), identified would not be practical due to lack of equivalency, documentation, validation data and other important technical and policy considerations. The search and review results have been documented and are placed in the docket for the proposed rule. EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 (59 FR 7629 (February 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, asPage 90 of 197 appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies and activities on minority populations and low-income populations in the United

States.

The EPA has concluded that it is not feasible to determine whether there would be disproportionately high and adverse human health or environmental effects on minority, low income or indigenous populations from the reconsideration of this final rule, as the EPA does not have specific information about the location of the stationary RICE affected by this rule. Although the EPA does not have specific engine location information, to the extent this rule achieves fewer reductions than the original rule, the decrease in reductions is primarily occurring in very remote areas that are sparsely populated.National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source Performance Standards for Stationary Internal Combustion Engines Page 91 of 197 **List of Subjects** 40 CFR part 60 Administrative practice and procedure, Air pollution control, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping. 40 CFR part 63 Administrative practice and procedure, Air pollution control, Hazardous substances, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping requirements.

______________________ Dated:

______________________ Lisa P. Jackson, Administrator.Page 92 of 197

For the reasons stated in the preamble, title 40, chapter I of the Code of Federal Regulations is amended as follows: **PART 60—[AMENDED]** 1. The authority citation for part 60 continues to read as

follows: Authority: 42 U.S.C. 7401, et seq

. **Subpart IIII—[amended]** 1. Section 60.4207 is amended by revising paragraph (b) to

read as follows: §60.4207 What fuel requirements must I meet if I am an owner or operator of a stationary CI internal combustion engine subject to this subpart?

* * * * * (b) Beginning October 1, 2010, owners and operators of stationary CI ICE subject to this subpart with a displacement of less than 30 liters per cylinder that use diesel fuel must use diesel fuel that meets the requirements of 40 CFR 80.510(b) for nonroad diesel fuel, except that any existing diesel fuel purchased (or otherwise obtained) prior to October 1, 2010, may be used until depleted.

* * * * * 2. Section 60.4211 is amended by revising paragraph (f) to

read as follows:Page 93 of 197

§60.4211 What are my compliance requirements if I am an owner or operator of a stationary CI internal combustion engine?

* * * * * (f) If you own or operate an emergency stationary ICE, you must operate the emergency stationary ICE according to the requirements in paragraphs (f)(1) through (3) of this section. In order for the engine to be considered an emergency stationary ICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (f)(1) through (3) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (f)(1) through (3) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations on non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary ICE in emergency situations. (2) You may operate your emergency stationary ICE for any combination of the purposes specified in paragraphs (f)(2)(i) through (iii) of this section for a maximum of 100 hours perPage 94 of 197

calendar year. Any operation for non-emergency situations as allowed by paragraph (f)(3) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (f)(2). (i) Emergency stationary ICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency ICE beyond 100 hours per calendar year. (ii) Emergency stationary ICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies.Page 95 of 197

(iii) Emergency stationary ICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary ICE may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 3. Section 60.4219 is amended by revising the definition of “Emergency stationary internal combustion engine” to read as

follows: §60.4219 What definitions apply to this subpart?

* * * * * Emergency stationary internal combustion engine means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary ICE must comply with the requirements specified in §60.4211(f) in order to be considered emergency stationary ICE. If the engine does not comply with thePage 96 of 197

requirements specified in §60.4211(f), then it is not considered to be an emergency stationary ICE under this subpart. (1) The stationary ICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary ICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary ICE used to pump water in the case of fire or flood, etc. (2) The stationary ICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §60.4211(f). (3) The stationary ICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §60.4211(f)(2)(ii) or (iii).

* * * * * **Subpart JJJJ—[amended]** 4. Section 60.4231 is amended by revising paragraphs (b) through (d) to read as follows:

§60.4231 What emission standards must I meet if I am a manufacturer of stationary SI internal combustion engines or equipment containing such engines?Page 97 of 197

* * * * * (b) Stationary SI internal combustion engine manufacturers must certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) (except emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(2), or manufactured on or after the applicable date in §60.4230(a)(4) for emergency stationary ICE with a maximum engine power greater than or equal to 130 HP, to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cubic centimeters (cc) that use gasoline to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90.Page 98 of 197

(c) Stationary SI internal combustion engine manufacturers must certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) (except emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) that are rich burn engines that use LPG and that are manufactured on or after the applicable date in §60.4230(a)(2) , or manufactured on or after the applicable date in §60.4230(a)(4) for emergency stationary ICE with a maximum engine power greater than or equal to 130 HP, to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that are rich burn engines that use LPG and that are manufactured on or after the applicable date in §60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cc that are rich burn engines that use LPG to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90.Page 99 of 197

(d) Stationary SI internal combustion engine manufacturers who choose to certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except gasoline and rich burn engines that use LPG and emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) under the voluntary manufacturer certification program described in this subpart must certify those engines to the certification emission standards for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers who choose to certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP (except gasoline and rich burn engines that use LPG), must certify those engines to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cc (except gasoline and rich burn engines that use LPG) to the certification emission standards for new nonroad SI engines in 40 CFR part 90. For stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except gasoline and rich burn engines that use LPG and emergency stationary ICE with a maximum engine powerPage 100 of 197

greater than 25 HP and less than 130 HP) manufactured prior to January 1, 2011, manufacturers may choose to certify these engines to the standards in Table 1 to this subpart applicable to engines with a maximum engine power greater than or equal to

100 HP and less than 500 HP.

* * * * * 5. Section 60.4243 is amended by revising paragraph (d) to

read as follows: §60.4243 What are my compliance requirements if I am an owner or operator of a stationary SI internal combustion engine?

* * * * * (d) If you own or operate an emergency stationary ICE, you must operate the emergency stationary ICE according to the requirements in paragraphs (d)(1) through (3) of this section. In order for the engine to be considered an emergency stationary ICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (d)(1) through (3) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (d)(1) through (3) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations onPage 101 of 197

non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary ICE in emergency situations. (2) You may operate your emergency stationary ICE for any combination of the purposes specified in paragraphs (d)(2)(i) through (iii) of this section for a maximum of 100 hours per calendar year. Any operation for non-emergency situations as allowed by paragraph (d)(3) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (d)(2). (i) Emergency stationary ICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency ICE beyond 100 hours per calendar year.Page 102 of 197

(ii) Emergency stationary ICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. (iii) Emergency stationary ICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary ICE may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (d)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 6. Section 60.4248 is amended by revising the definition of “Emergency stationary internal combustion engine” to read as

follows: §60.4248 What definitions apply to this subpart?Page 103 of 197

* * * * * Emergency stationary internal combustion engine means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary ICE must comply with the requirements specified in §60.4243(d) in order to be considered emergency stationary ICE. If the engine does not comply with the requirements specified in §60.4243(d), then it is not considered to be an emergency stationary ICE under this subpart. (1) The stationary ICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary ICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary ICE used to pump water in the case of fire or flood, etc. (2) The stationary ICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §60.4243(d). (3) The stationary ICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §60.4243(d)(2)(ii) or (iii).Page 104 of 197

* * * * * 7. Table 2 to Subpart JJJJ of Part 60 is revised to read as

follows: **Table 2 to Subpart JJJJ of Part 60 –- Requirements for Performance Tests**  As stated in §60.4244, you must comply with the following requirements for performance tests within 10 percent of 100 percent peak (or the highest achievable) load: **For each Complying with the**  **requirement to**  **You must U**  **sing According to the**  **following requirement**  **s** 1. Stationary SI internal combustion engine demonstrati ng compliance according to §60.4244. a. limit the concentrati on of NO x in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A or ASTM Method D6522- 00(2005) a

. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device. ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for NO x concentrati on.Page 105 of 197

iii. If necessary, determine the exhaust flowrate o f the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for NO x concentrati on.

v. Measure NO x at the exhaust of the stationary internal combustion engine. ( 5) Method 7E of 40 CFR part 60, a ppendix A, Method D6522- 00(2005) a , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.Page 106 of 197

b. limit the concentrati on of CO in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 40 CFR pa r t 60, Appendix A or ASTM Method D6522- 00(2005) a

. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device. ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for CO concentrati on. iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.Page 107 of 197

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for CO concentrati on.

v. Measure CO at the exhaust of the stationary internal combustion engine. ( 5) Method 10 of 40 CFR part 60, a ppendix A, A STM Method D6522- 00(2005) a , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.

c. limit the concentrati on of VOC in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device.Page 108 of 197

ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for VOC concentrati on. iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for VOC concentrati on.Page 109 of 197

v. Measure VOC at the exhaust of the stationary internal combustion engine. (5) M ethods 25A and 18 of 4 0 CFR part 60, a ppendix A, Method 25A with the use of a methane cutter as described in 40 CFR 1065.265, Method 18 or 40 CFR part 60, appendix A c,d , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.

a ASTM D6522-00 is incorporated by reference; see 40 CFR 60.17. Also, you may petition the Administrator for approval to use alternative methods for portable analyzer. b You may use ASME PTC 19.10-1981, Flue and Exhaust Gas Analyses, for measuring the O 2 content of the exhaust gas as an alternative to EPA Method 3B.

c You may use EPA Method 18 of 40 CFR part 60, appendix A, provided that you conduct an adequate presurvey test prior to the emissions test, such as the one described in OTM 11 on EPA’s website ( http://www.epa.gov/ttn/emc/prelim/otm11.pdf ). d You may use ASTM D6420-99 (2004), Test Method for Determination of Gaseous Organic Compounds by Direct Interface Gas Chromatography/Mass Spectrometry as an alternative to EPA Method 18 for measuring total nonmethane organic. **PART 63--[AMENDED]**Page 110 of 197

8. The authority citation for part 63 continues to read as

follows: Authority: 42 U.S.C. 7401, et seq

. **Subpart ZZZZ--[amended]** 9. Section 63.6585 is amended by adding paragraph (f) to

read as follows: §63.6585 Am I subject to this subpart?

* * * * * (f) The emergency stationary RICE listed in paragraphs (f)(1) through (3) of this section are not subject to this subpart. The stationary RICE must meet the definition of an emergency stationary RICE in §63.6675, which includes operating according to the provisions specified in §63.6640(f). (1) Existing residential emergency stationary RICE located

at an area source of HAP emissions. (2) Existing commercial emergency stationary RICE located

at an area source of HAP emissions. (3) Existing institutional emergency stationary RICE

located at an area source of HAP emissions. 10. Section 63.6590 is amended by removing paragraphs (b)(3)(vi) through (viii). 11. Section 63.6595 is amended by revising paragraph (a)(1)

to read as follows: §63.6595 When do I have to comply with this subpart?Page 111 of 197

(a) * * * (1) If you have an existing stationary RICE, excluding existing non-emergency CI stationary RICE, with a site rating of more than 500 brake HP located at a major source of HAP emissions, you must comply with the applicable emission limitations, operating limitations and other requirements no later than June 15, 2007. If you have an existing non-emergency CI stationary RICE with a site rating of more than 500 brake HP located at a major source of HAP emissions, an existing stationary CI RICE with a site rating of less than or equal to 500 brake HP located at a major source of HAP emissions, or an existing stationary CI RICE located at an area source of HAP emissions, you must comply with the applicable emission limitations, operating limitations, and other requirements no later than May 3, 2013. If you have an existing stationary SI RICE with a site rating of less than or equal to 500 brake HP located at a major source of HAP emissions, or an existing stationary SI RICE located at an area source of HAP emissions, you must comply with the applicable emission limitations, operating limitations, and other requirements no later than October 19, 2013.

* * * * *

12. Section 63.6602 is revised to read as follows:Page 112 of 197

§63.6602 What emission limitations and other requirements must I meet if I own or operate an existing stationary RICE with a site rating of equal to or less than 500 brake HP located at a major source of HAP emissions? If you own or operate an existing stationary RICE with a site rating of equal to or less than 500 brake HP located at a major source of HAP emissions, you must comply with the emission limitations and other requirements in Table 2c to this subpart which apply to you. Compliance with the numerical emission limitations established in this subpart is based on the results of testing the average of three 1-hour runs using the testing requirements and procedures in §63.6620 and Table 4 to this subpart. 13. Section 63.6603 is amended by: a. Revising the section heading; b. Revising paragraph (b); and c. Adding paragraphs (c) through (e) to read as follows: §63.6603 What emission limitations, operating limitations, and other requirements must I meet if I own or operate an existing stationary RICE located at an area source of HAP emissions?

* * * * *(b) If you own or operate an existing stationary nonemergency CI RICE with a site rating of more than 300 HP located at an area source of HAP that meets either paragraph (b)(1) orPage 113 of 197

(b)(2) of this section, you do not have to meet the numerical CO emission limitations specified in Table 2d of this subpart. Existing stationary non-emergency CI RICE with a site rating of

more than 300 HP located at an area source of HAP that meet either paragraph (b)(1) or (b)(2) of this section must meet the management practices that are shown for stationary non-emergency CI RICE with a site rating of less than or equal to 300 HP in Table 2d of this subpart. (1) The area source is located in an area of Alaska that is not accessible by the Federal Aid Highway System (FAHS). (2) The stationary RICE is located at an area source that meets paragraphs (b)(2)(i), (b)(2)(ii), and (b)(2)(iii) of this

section. (i) The only connection to the FAHS is through the Alaska Marine Highway System (AMHS), or the stationary RICE operation is within an isolated grid in Alaska that is not connected to the statewide electrical grid referred to as the Alaska Railbelt

Grid. (ii) At least 10 percent of the power generated by the stationary RICE on an annual basis is used for residential

purposes. (iii) The generating capacity of the area source is less than 12 megawatts, or the stationary RICE is used exclusivelyPage 114 of 197

for backup power for renewable energy and is used less than 500 hrs per year on a 10 year rolling average. (c) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source

of HAP emissions that is certified to the Tier 1 or Tier 2

emission standards in Table 1 of 40 CFR 89.112 and that is subject to an enforceable state or local standard that requires the engine to be replaced no later than June 1, 2018, you may until May 3, 2015, choose to comply with the management practices that are shown for stationary non-emergency CI RICE with a site rating of less than or equal to 300 HP in Table 2d of this subpart instead of the applicable emission limitations in Table 2d, operating limitations in Table 2b, and crankcase ventilation system requirements in §63.6625(g). After May 3, 2015, you must comply with the emission limitations in Table 2dand operating limitations in Table 2b that apply for nonemergency CI RICE with a site rating of more than 300 HP located at an area source of HAP emissions. After May 3, 2015, you must also comply with the crankcase ventilation system requirements in §63.6625(g). (d) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP emissions that is certified to the Tier 3 (Tier 2 for engines above 560 kW) emission standards in Table 1 of 40 CFRPage 115 of 197

89.112, you may comply with the requirements under this part by meeting the requirements for Tier 3 engines (Tier 2 for engines above 560 kW) in 40 CFR part 60 subpart IIII instead of the emission limitations and other requirements that would otherwise apply under this part for existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP

emissions. (e) An existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at area sources of HAP must meet the definition of remote stationary RICE in §63.6675 on the initial compliance date for the engine, October 19, 2013, in order to be considered a remote stationaryRICE under this subpart. Owners and operators of existing nonemergency SI 4SLB and 4SRB stationary RICE with a site rating of

more than 500 HP located at area sources of HAP that meet the definition of remote stationary RICE in §63.6675 of this subpart as of October 19, 2013 must evaluate the status of their stationary RICE every 12 months. Owners and operators must keep

records of the initial and annual evaluation of the status of the engine. If the evaluation indicates that the stationary RICE no longer meets the definition of remote stationary RICE in §63.6675 of this subpart, the owner or operator must comply with all of the requirements for existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HPPage 116 of 197

located at area sources of HAP that are not remote stationary RICE within one year of the evaluation.

14. Section 63.6604 is revised to read as follows: §63.6604 What fuel requirements must I meet if I own or operate an existing stationary CI RICE? If you own or operate an existing non-emergency, non-black start CI stationary RICE with a site rating of more than 300 brake HP with a displacement of less than 30 liters per cylinder that uses diesel fuel, you must use diesel fuel that meets the requirements in 40 CFR 80.510(b) for nonroad diesel fuel. Existing non-emergency CI stationary RICE located in Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or at area sources in areas of Alaska that meet either §63.6603(b)(1) or §63.6603(b)(2) are exempt from the requirements of this section. 15. Section 63.6605 is amended by revising paragraph (a) to

read as follows: §63.6605 What are my general requirements for complying with this subpart? (a) You must be in compliance with the emission limitations, operating limitations, and other requirements in this subpart that apply to you at all times.

* * * * *Page 117 of 197

16. Section 63.6620 is amended by revising paragraphs (b) and (e) to read as follows: §63.6620 What performance tests and other procedures must I

use?

* * * * * (b) Each performance test must be conducted according to the requirements that this subpart specifies in Table 4 to this subpart. If you own or operate a non-operational stationary RICE that is subject to performance testing, you do not need to start up the engine solely to conduct the performance test. Owners and operators of a non-operational engine can conduct the performance test when the engine is started up again. The test must be conducted at any load condition within plus or minus 10 percent of 100 percent load for the stationary RICE listed in paragraphs (b)(1) through (4) of this section. (1) Non-emergency 4SRB stationary RICE with a site rating of greater than 500 brake HP located at a major source of HAP

emissions. (2) New non-emergency 4SLB stationary RICE with a site rating of greater than or equal to 250 brake HP located at a major source of HAP emissions. (3) New non-emergency 2SLB stationary RICE with a site rating of greater than 500 brake HP located at a major source of

HAP emissions.Page 118 of 197

(4) New non-emergency CI stationary RICE with a site rating of greater than 500 brake HP located at a major source of HAP

emissions.

* * * * * (e)(1) You must use Equation 1 of this section to

determine compliance with the percent reduction requirement:

Where:

C i = concentration of CO, THC, or formaldehyde at the control device inlet, C o = concentration of CO, THC, or formaldehyde at the control device outlet, and R = percent reduction of CO, THC, or formaldehyde emissions.

(2) You must normalize the carbon monoxide (CO), total hydrocarbons (THC), or formaldehyde concentrations at the inlet and outlet of the control device to a dry basis and to 15 percent oxygen, or an equivalent percent carbon dioxide (CO 2 ). If pollutant concentrations are to be corrected to 15 percent oxygen and CO 2 concentration is measured in lieu of oxygen concentration measurement, a CO 2 correction factor is needed.

Calculate the CO 2 correction factor as described in paragraphs (e)(2)(i) through (iii) of this section. C i - C o

C i x 100 = R ( Eq . 1)Page 119 of 197

(i) Calculate the fuel-specific F o value for the fuel burned during the test using values obtained from Method 19,

Section 5.2, and the following equation:

Where:

F o = Fuel factor based on the ratio of oxygen volume to the ultimate CO 2 volume produced by the fuel at zero percent excess air. 0.209 = Fraction of air that is oxygen, percent/100. F d = Ratio of the volume of dry effluent gas to the gross calorific value of the fuel from Method 19, dsm 3 /J (dscf/10 6 Btu). F c = Ratio of the volume of CO 2 produced to the gross calorific value of the fuel from Method 19, dsm 3 /J (dscf/10 6 Btu) (ii) Calculate the CO 2 correction factor for correcting

measurement data to 15 percent oxygen, as follows: Where:

X co2 = CO 2 correction factor, percent. 5.9 = 20.9 percent O 2 - 15 percent O 2 , the defined O 2 correction value, percent. (iii) Calculate the CO, THC, and formaldehyde gas concentrations adjusted to 15 percent O 2 using CO 2 as follows: F o = 0.209 F d F c ( Eq . 2)

X CO2 = 5.9 F o ( Eq . 3)

C adj = C d X CO2 % CO 2 ( Eq . 4)Page 120 of 197

Where:

%CO 2 = Measured CO 2 concentration measured, dry basis, percent.

* * * * * 17. Section 63.6625 is amended by: a. Revising the first sentence in paragraph (a); b. Revising the first sentence in paragraph (b); c. Revising paragraph (e)(6); and d. Revising paragraph (g) to read as follows: §63.6625 What are my monitoring, installation, collection, operation, and maintenance requirements? (a) If you elect to install a CEMS as specified in Table 5 of this subpart, you must install, operate, and maintain a CEMS to monitor CO and either oxygen or CO 2 according to the requirements in paragraphs (a)(1) through (4) of this section. If you are meeting a requirement to reduce CO emissions, the

CEMS must be installed at both the inlet and outlet of the control device. If you are meeting a requirement to limit the concentration of CO, the CEMS must be installed at the outlet of

the control device. * * *

* * * * * (b) If you are required to install a continuous parameter monitoring system (CPMS) as specified in Table 5 of this subpart, you must install, operate, and maintain each CPMSPage 121 of 197

according to the requirements in paragraphs (b)(1) through (6)

of this section. * * *

* * * * * (e) * * * (6) An existing non-emergency, non-black start stationary

RICE located at an area source of HAP emissions which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis;

* * * * * (g) If you own or operate an existing non-emergency, non-black start CI engine greater than or equal to 300 HP that is not equipped with a closed crankcase ventilation system, you must comply with either paragraph (g)(1) or paragraph (g)(2) of this section. Owners and operators must follow the manufacturer’s specified maintenance requirements for operating and maintaining the open or closed crankcase ventilation systems and replacing the crankcase filters, or can request the Administrator to approve different maintenance requirements that are as protective as manufacturer requirements. Existing CI engines

located at area sources in areas of Alaska that meet either §63.6603(b)(1) or §63.6603(b)(2) do not have to meet the requirements of paragraph (g) of this section.Page 122 of 197

(1) Install a closed crankcase ventilation system that prevents crankcase emissions from being emitted to the atmosphere, or (2) Install an open crankcase filtration emission control system that reduces emissions from the crankcase by filtering the exhaust stream to remove oil mist, particulates and metals.

* * * * * 18. Section 63.6630 is amended by: a. Revising the section heading; b. Revising paragraph (a); c. Adding paragraph (d); and d. Adding paragraph (e) to read as follows: §63.6630 How do I demonstrate initial compliance with the emission limitations, operating limitations, and other requirements? (a) You must demonstrate initial compliance with each emission limitation, operating limitation, and other requirement that applies to you according to Table 5 of this subpart.

* * * * * (d) Non-emergency 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions by 76 percent or more can demonstrate initial compliance with the formaldehyde emission limit by testing for THC instead of formaldehyde. The testing must be conducted according to the requirements in TablePage 123 of 197

4 of this subpart. The average reduction of emissions of THC determined from the performance test must be equal to or greater than 30 percent. (e) The initial compliance demonstration required for existing non-emergency 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year must be conducted according to the following requirements: (1) The compliance demonstration must consist of at least

three test runs. (2) Each test run must be of at least 15 minute duration, except that each test conducted using the method in appendix A to this subpart must consist of at least one measurement cycle and include at least 2 minutes of test data phase measurement. (3) If you are demonstrating compliance with the CO concentration or CO percent reduction requirement, you must measure CO emissions using one of the CO measurement methods specified in Table 4 of this subpart, or using appendix A to this subpart. (4) If you are demonstrating compliance with the THC percent reduction requirement, you must measure THC emissions using Method 25A of 40 CFR part 60, appendix A.Page 124 of 197

(5) You must measure O 2 using one of the O 2 measurement methods specified in Table 4 of this subpart. Measurements to

determine O 2 concentration must be made at the same time as the

measurements for CO or THC concentration. (6) If you are demonstrating compliance with the CO or THC percent reduction requirement, you must measure CO or THC

emissions and O 2 emissions simultaneously at the inlet and outlet

of the control device. 19. Section 63.6640 is amended by: a. Amending the section heading; b. Revising paragraph (a); c. Revising paragraph (c); and d. Revising paragraph (f) to read as follows: §63.6640 How do I demonstrate continuous compliance with the emission limitations, operating limitations, and other requirements? (a) You must demonstrate continuous compliance with each emission limitation, operating limitation, and other requirements in Tables 1a and 1b, Tables 2a and 2b, Table 2c, and Table 2d to this subpart that apply to you according to methods specified in Table 6 to this subpart.

* * * * * (c) The annual compliance demonstration required for existing non-emergency 4SLB and 4SRB stationary RICE with a sitePage 125 of 197

rating of more than 500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year must be conducted according to the following requirements: (1) The compliance demonstration must consist of at least

one test run. (2) Each test run must be of at least 15 minute duration, except that each test conducted using the method in appendix A to this subpart must consist of at least one measurement cycle and include at least 2 minutes of test data phase measurement. (3) If you are demonstrating compliance with the CO concentration or CO percent reduction requirement, you must measure CO emissions using one of the CO measurement methods specified in Table 4 of this subpart, or using appendix A to this subpart. (4) If you are demonstrating compliance with the THC percent reduction requirement, you must measure THC emissions using Method 25A of 40 CFR part 60, appendix A. (5) You must measure O 2 using one of the O 2 measurement methods specified in Table 4 of this subpart. Measurements to

determine O 2 concentration must be made at the same time as the

measurements for CO or THC concentration. (6) If you are demonstrating compliance with the CO or THC percent reduction requirement, you must measure CO or THCPage 126 of 197

emissions and O 2 emissions simultaneously at the inlet and outlet

of the control device. (7) If the results of the annual compliance demonstration show that the emissions exceed the levels specified in Table 6 of this subpart, the stationary RICE must be shut down as soon as safely possible, and appropriate corrective action must be taken (e.g., repairs, catalyst cleaning, catalyst replacement). The stationary RICE must be retested within 7 days of being restarted and the emissions must meet the levels specified in Table 6 of this subpart. If the retest shows that the emissions continue to exceed the specified levels, the stationary RICE must again be shut down as soon as safely possible, and the stationary RICE may not operate, except for purposes of startup and testing, until the owner/operator demonstrates through testing that the emissions do not exceed the levels specified in Table 6 of this subpart.

* * * * * (f) If you own or operate an emergency stationary RICE, you must operate the emergency stationary RICE according to the requirements in paragraphs (f)(1) through (4) of this section. In order for the engine to be considered an emergency stationary RICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year,Page 127 of 197

as described in paragraphs (f)(1) through (4) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (f)(1) through (4) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations on non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary RICE in emergency situations. (2) You may operate your emergency stationary RICE for any combination of the purposes specified in paragraphs (f)(2)(i) through (iii) of this section for a maximum of 100 hours per calendar year. Any operation for non-emergency situations as allowed by paragraphs (f)(3) and (4) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (f)(2). (i) Emergency stationary RICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner orPage 128 of 197

operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency RICE beyond 100 hours per calendar year. (ii) Emergency stationary RICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. (iii) Emergency stationary RICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary RICE located at major sources ofHAP may be operated for up to 50 hours per calendar year in nonemergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to generate incomePage 129 of 197

for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity. (4) Existing emergency stationary RICE located at area sources of HAP may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section.(i) Prior to April 16, 2017, the 50 hours per year for nonemergency situations can be used for peak shaving or nonemergency demand response to generate income for a facility, or to otherwise supply power as part of a financial arrangement with another entity if engines is operated as part of a peak shaving (load management program) with the local distribution system operator and the power is provided only to the facility itself or to support the local distribution system. (ii) On or after April 16, 2017, the 50 hours per year fornon-emergency situations cannot be used for peak shaving or nonemergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 20. Section 63.6645 is amended by adding a new paragraph (i) to read as follows:Page 130 of 197

§63.6645 What notifications must I submit and when?

* * * * * (i) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source

of HAP emissions that is certified to the Tier 1 or Tier 2 emission standards in Table 1 of 40 CFR 89.112 and subject to an enforceable state or local standard requiring engine replacement and you intend to meet management practices rather than emission limits, as specified in §63.6603(c), you must submit a notification by March 3, 2013, stating that you intend to use the provision in §63.6603(c) and identifying the state or local regulation that the engine is subject to. 21. Section 63.6675 is amended by: a. Adding in alphabetical order the definition of Alaska Railbelt Grid; b. Revising the definition of Emergency stationary RICE ;

and c. Adding in alphabetical order the definition of Remote stationary RICE to read as follows. §63.6675 What definitions apply to this subpart?

Alaska Railbelt Grid means the service areas of the six regulated public utilities that extend from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are Golden Valley Electric Association; Chugach Electric Association;Page 131 of 197

Matanuska Electric Association; Homer Electric Association; Anchorage Municipal Light & Power; and the City of Seward Electric System.

* * * * * Emergency stationary RICE means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary RICE must comply with the requirements specified in §63.6640(f) in order to be considered emergency stationary RICE. If the engine does not comply with the requirements specified in §63.6640(f), then it is not considered to be an emergency stationary RICE under this subpart. (1) The stationary RICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary RICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary RICE used to pump water in the case of fire or flood, etc. (2) The stationary RICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §63.6640(f).Page 132 of 197

(3) The stationary RICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §63.6640(f)(2)(ii) or (iii) and §63.6640(f)(4)(i).

* * * * * Remote stationary RICE means stationary RICE meeting any of the following criteria: (1) Stationary RICE located in an offshore area that is beyond the line of ordinary low water along that portion of the

coast of the United States that is in direct contact with the open seas and beyond the line marking the seaward limit of

inland waters. (2) Stationary RICE located on a pipeline segment that meets both of the criteria in paragraphs (2)(i) and (ii) of this

definition. (i) A pipeline segment with 10 or fewer buildings intended for human occupancy within 220 yards (200 meters) on either side of the centerline of any continuous 1-mile (1.6 kilometers) length of pipeline. Each separate dwelling unit in a multiple dwelling unit building is counted as a separate building intended for human occupancy. (ii) The pipeline segment does not lie within 100 yards (91 meters) of either a building or a small, well-defined outside area (such as a playground, recreation area, outdoor theater, orPage 133 of 197

other place of public assembly) that is occupied by 20 or more persons on at least 5 days a week for 10 weeks in any 12-month period. The days and weeks need not be consecutive. The building or area is considered occupied for a full day if it is occupied for any portion of the day. (iii) For purposes of this paragraph (2), the term pipeline segment means all parts of those physical facilities through which gas moves in transportation, including but not limited to pipe, valves, and other appurtenance attached to pipe, compressor units, metering stations, regulator stations, delivery stations, holders, and fabricated assemblies. Stationary RICE located within 50 yards (46 m) of the pipeline segment providing power for equipment on a pipeline segment are part of the pipeline segment. Transportation of gas means the gathering, transmission, or distribution of gas by pipeline, or the storage of gas. A building is intended for human occupancy if its primary use is for a purpose involving the presence of

humans. (3) Stationary RICE that are not located on pipelines and that have 5 or fewer buildings intended for human occupancy within a 0.25 mile radius around the engine.

* * * * * 22. Table 1b to Subpart ZZZZ of Part 63 is revised to read

as follows:Page 134 of 197

**Table 1b to Subpart ZZZZ of Part 63. Operating Limitations for Existing, New, and Reconstructed SI 4SRB Stationary RICE >500 HP**  **Located at a Major Source of HAP Emissions** As stated in §§63.6600, 63.6603, 63.6630 and 63.6640, you must comply with the following operating limitations for existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions:

**For each... Y**  **ou must meet the following operating limitation, except**  **during periods of startup...** 1. existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to reduce formaldehyde emissions by 76 percent or more (or by 75 percent or more, if applicable) and using NSCR;

or existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd or less at 15 percent O 2 and using NSCR; a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water at 100 percent load plus or minus 10 percent from the pressure drop across the catalyst measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 750°F and less than or equal to 1250°F. 1Page 135 of 197

2. existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to reduce formaldehyde emissions by 76 percent or more (or by 75 percent or more, if applicable) and not using NSCR;

or existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd or less at 15 percent O 2 and not using NSCR. Comply with any operating limitations approved by the Administrator.

1 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.8(f) for a different temperature range. 23. Table 2b to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2b to Subpart ZZZZ of Part 63** 

. **Operating Limitations for New and Reconstructed 2SLB and CI Stationary RICE >500 HP**  **Located at a Major Source of HAP Emissions, New and Reconstructed 4SLB Stationary RICE**  **≥ 250 HP Located at a Major**  **Source of HAP Emissions, Existing CI Stationary RICE >500 HP, and Existing 4SLB Stationary RICE >500 HP Located at an Area**  **Source of HAP Emissions** As stated in §§63.6600, 63.6601, 63.6603, 63.6630, and 63.6640, you must comply with the following operating limitations for new and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions; new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions; and existing CI stationary RICE >500 HP **:**

**For each... Y**  **ou must meet the following operating limitation, except**  **during periods of startup...**Page 136 of 197

1. New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to reduce CO emissions and using an oxidation catalyst;

and

New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust and using an oxidation catalyst a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water at 100 percent load plus or minus 10 percent from the pressure drop across the catalyst that was measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 450°F and less than or equal to 1350°F. 1

2. Existing CI stationary RICE >500 HP complying with the requirement to limit or reduce the concentration of CO in the stationary RICE exhaust and using an oxidation catalyst a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water from the pressure drop across the catalyst that was measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 450°F and less than or equal to 1350°F. 1Page 137 of 197

3. New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to reduce CO emissions and not using an oxidation catalyst;

and

New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust and not using an oxidation catalyst

and existing CI stationary RICE >500 HP complying with the requirement to limit or reduce the concentration of CO in the stationary RICE exhaust and not using an oxidation catalyst Comply with any operating limitations approved by the Administrator.

1 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.8(f) for a different temperature range. 24. Table 2c to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2c to Subpart ZZZZ of Part 63** 

. **Requirements for Existing Compression Ignition Stationary RICE Located at a Major Source**  **of HAP Emissions and Existing Spark Ignition Stationary RICE ≤**  **500 HP Located at a Major Source of HAP Emissions**Page 138 of 197

As stated in §§63.6600, 63.6602, and 63.6640, you must comply with the following requirements for existing compression ignition stationary RICE located at a major source of HAP emissions and existing spark ignition stationary RICE ≤ 500 HP located at a major source of HAP emissions **:**

**F or each... You must meet the**  **following requirement, except during periods of**  **startup... D**  **uring periods of startup you must...** 

1. Emergency stationary CI RICE and black start stationary CI RICE. 1 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 2 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 3 Minimize the engine’s time spent a t idle and minimize t he engine’s startup t ime at startup to a

period needed for a ppropriate and safe loading of the engine, not to exceed 30 minutes, a fter which time the non- s tartup emission

limitations apply. 32. NonEmergency, nonblack start stationary CI RICE <100 HP. a. Change oil and filter every 1,000 hours of operation or annually, whichever comes first 2 ; b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 33. NonEmergency, nonblack start CI stationary RICE 100< HP< 300 HP. Limit concentration of CO in the stationary RICE exhaust to 230 ppmvd or less at 15 percent O 2 .Page 139 of 197

4. NonEmergency, nonblack start CI stationary RICE 300<HP< 500. a. Limit concentration of CO in the stationary RICE exhaust to 49 ppmvd or less at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more.5. NonEmergency, nonblack start stationary CI RICE >500 HP. a. Limit concentration of CO in the stationary RICE exhaust to 23 ppmvd or less at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 6. Emergency stationary SI RICE and black start stationary SI RICE. 1 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 2 b. Inspect spark plugs every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 37. NonEmergency, nonblack start stationary SI RICE <100 HP that are not 2SLB stationary RICE. a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first 2 ; b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 3Page 140 of 197

8. NonEmergency, nonblack start 2SLB stationary SI RICE <100 HP. a. Change oil and filter every 4,320 hours of operation or annually, whichever comes first 2 ; b. Inspect spark plugs every 4,320 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 4,320 hours of operation or annually, whichever comes first, and replace as necessary. 39. Nonemergency, nonblack start 2SLB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of CO in the stationary RICE exhaust to 225 ppmvd or less at 15 percent O 210. Nonemergency, nonblack start 4SLB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of CO in the stationary RICE exhaust to 47 ppmvd or less at 15 percent O 211. Nonemergency, nonblack start 4SRB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of formaldehyde in the stationary RICE exhaust to 10.3 ppmvd or less at 15 percent O 212. Nonemergency, nonblack start stationary RICE 100 ≤ HP ≤ 500 which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis Limit concentration of CO in the stationary RICE exhaust to 177 ppmvd or less at 15 percent O 2

1 If an emergency engine is operating during an emergency and it is not possible to shut down the engine in order to perform the work practice requirements on the schedule required in Table 2c of this subpart, or if performing the work practice on thePage 141 of 197

required schedule would otherwise pose an unacceptable risk under federal, state, or local law, the work practice can be delayed until the emergency is over or the unacceptable risk under federal, state, or local law has abated. The work practice should be performed as soon as practicable after the emergency has ended or the unacceptable risk under federal, state, or local law has abated. Sources must report any failure to perform the work practice on the schedule required and the federal, state or local law under which the risk was deemed unacceptable. 2 Sources have the option to utilize an oil analysis program as described in §63.6625(i) in order to extend the specified oil change requirement in Table 2c of this subpart. 3 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.6(g) for alternative work practices. 25. Table 2d to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2d to Subpart ZZZZ of Part 63** 

. **Requirements for Existing Stationary RICE Located at Area Sources of HAP Emissions**  As stated in §§63.6603 and 63.6640, you must comply with the following requirements for existing stationary RICE located at area sources of HAP emissions **:**

**For each... You must meet the following**  **requirement, except during periods of**  **startup... During periods of**  **startup you must...**

1. Non-Emergency, non-black start CI stationary RICE < 300 HP a. Change oil and filter every 1,000 hours of operation or annually, whichever comes first; 1 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of Minimize the engine’s time spent at idle and minimize the engine’s startup time at startup to a period needed for appropriate and safe loading of the engine, not to exceed 30 minutes, after which time the non-startup emission limitations apply.Page 142 of 197

operation or annually, whichever comes first, and replace as necessary. 2. Non-Emergency, non-black start CI stationary RICE 300<HP< 500 a. Limit concentration of CO in the stationary RICE exhaust to 49 ppmvd at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 3. Non-Emergency, non-black start CI stationary RICE >500 HP a. Limit concentration of CO in the stationary RICE exhaust to 23 ppmvd at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 4. Emergency stationary CI RICE and black start stationary CI RICE 2 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 1 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary.Page 143 of 197

5. Emergency stationary SI RICE; black start stationary SIRICE; nonemergency, nonblack start 4SLB stationary RICE >500 HP that operate 24 hours or less per calendar year; non-emergency, non-black start 4SRB stationary RICE >500 HP that operate 24 hours or less per calendar year 2 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 6. Non-emergency, non-black start 2SLB stationary RICE a. Change oil and filter every 4,320 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 4,320 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 4,320 hours of operation or annually, whichever comes first, and replace as necessary.Page 144 of 197

7. Non-emergency, non-black start 4SLB stationary RICE ≤ 500 HP; nonemergency, nonblack start 4SLB remote stationary RICE >500 HP a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 8. Non-emergency, non-black start 4SLB stationary RICE >500 HP that are not remote stationary RICE and that operate more than 24 hours per calendar year Install an oxidation catalyst to reduce HAP emissions from the stationary RICEPage 145 of 197

9. Non-emergency, non-black start 4SRB stationary RICE ≤ 500 HP; nonemergency, nonblack start 4SRB remote stationary RICE >500 HP a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 10. Non-emergency, non-black start 4SRB stationary RICE >500 HP that are not remote stationary RICE and that operate more than 24 hours per calendar year Install NSCR to reduce HAP emissions from the stationary RICEPage 146 of 197

11. Non-emergency, non-black start stationary RICE which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 1 Sources have the option to utilize an oil analysis program as described in §63.6625(i) in order to extend the specified oil change requirement in Table 2d of this subpart. 2 If an emergency engine is operating during an emergency and it is not possible to shut down the engine in order to perform the management practice requirements on the schedule required in Table 2d of this subpart, or if performing the management practice on the required schedule would otherwise pose an unacceptable risk under federal, state, or local law, the management practice can be delayed until the emergency is over or the unacceptable risk under federal, state, or local law has abated. The management practice should be performed as soon as practicable after the emergency has ended or the unacceptable risk under federal, state, or local law has abated. Sources must report any failure to perform the management practice on the schedule required and the federal, state or local law under which the risk was deemed unacceptable. 26. Table 3 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 3 to Subpart ZZZZ of Part 63. Subsequent Performance Tests** As stated in §§63.6615 and 63.6620, you must comply with the following subsequent performance test requirements:Page 147 of 197

**For each... Complying with the**  **requirement to... Y**  **ou must...**

1. New or reconstructed 2SLB stationary RICE >500 HP located at major sources; new or reconstructed 4SLB stationary RICE ≥ 250 HP located at major sources; and new or reconstructed CI stationary RICE >500 HP located at major sources. Reduce CO emissions and not using a CEMS Conduct subsequent performance tests semiannually 1

.

2. 4SRB stationary RICE ≥ 5,000 HP located at major sources. Reduce formaldehyde emissions Conduct subsequent performance tests semiannually 1

. 3. Stationary RICE >500 HP located at major sources and new or reconstructed 4SLB stationary RICE 250 ≤ HP ≤ 500 located at major sources. Limit the concentration of formaldehyde in the stationary RICE exhaust Conduct subsequent performance tests semiannually 1

.

4. Existing nonemergency, nonblack start CI stationary RICE >500 HP that are not limited use stationary RICE Limit or reduce CO emissions and not using a CEMS Conduct subsequent performance tests every 8,760 hrs or 3 years, whichever comes first.

5. Existing nonemergency, nonblack start CI stationary RICE >500 HP that are limited use stationary RICE Limit or reduce CO emissions and not using a CEMS Conduct subsequent performance tests every 8,760 hrs or 5 years, whichever comes first.

1 After you have demonstrated compliance for two consecutive tests, you may reduce the frequency of subsequent performance tests to annually. If the results of any subsequent annual performance test indicate the stationary RICE is not inPage 148 of 197

compliance with the CO or formaldehyde emission limitation, or you deviate from any of your operating limitations, you must resume semiannual performance tests. 27. Table 4 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 4 to Subpart ZZZZ of Part 63. Requirements for Performance Tests**  As stated in §§63.6610, 63.6611, 63.6612, 63.6620, and 63.6640, you must comply with the following requirements for performance tests for stationary RICE:

**For each...**  **Complying with the**  **requirement to...**  **You must...**  **Using... According to the**  **following requirements** 

**...** 1. 2SLB, 4SLB, and CI stationary RICE a. reduce CO emissions i. Measure the O 2 at the inlet and outlet of the control device; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522-00 (2005) a (incorpo rated by referenc e, see §63.14). (a) Measurements to determine O 2 must be made at the same time as the measurements for COconcentration.

ii. Measure the CO at the inlet and the outlet of the control device (1) ASTM D6522-00 (2005) a,b (incorpo ra-ted by referenc e, see §63.14) (a) The COconcentration must be at 15 percent O 2 , dry basis.Page 149 of 197

or Method 10 of 40 CFR part 60, appendix A. 2. 4SRB stationary RICE a. reduce formaldehyd e emissions i. Select the sampling port location and the number of traverse points; and (1) Method 1 or 1A of 40 CFR part 60, appendix A §63.7(d) (1)(i) (a) sampling sites must be located at the inlet and outlet of the control device.

ii. Measure O 2 at the inlet and outlet of the control device; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00(2005)

. (a) measurements to determine O 2 concentratio n must be made at the same time as the measurements for formaldehyde or THC concentratio n.Page 150 of 197

iii. Measure moisture content at the inlet and outlet of the control device; and (1) Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D 6348-03 (a) measurements to determine moisture content must be made at the same time and location as the measurements for formaldehyde or THC concentratio n. iv. If demonstra ting complianc e with the formaldeh yde percent reduction requireme nt, measureformaldehyde at the inlet and the outlet of the control device (1) Method 320 or 323 of 40 CFR part 63, appendix A; or ASTM D6348- 03 c , provided in ASTM D6348-03 Annex A5 (Analyte Spiking Techniqu e), the percent R must be greater than or equal to 70 and less than or equal to 130. (a) formaldehydeconcentration must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.Page 151 of 197

iv. If demonstra ting complianc e with the THC percent reduction requireme nt, measure THC at the inlet and the outlet of the control device (1) Method 25A of 40 CFR part 60, appendix A (a) THCconcentration must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

3. Stationary RICE a. limit theconcentration offormaldehyde or CO in the stationary RICE exhaust i. Select the sampling port location and the number of traverse points; and (1) Method 1 or 1A of 40 CFR part 60, appendix A §63.7(d) (1)(i) (a) if using a control device, the sampling site must be located at the outlet of the control device. ii. Determine the O 2 concentra tion of the stationar y RICE exhaust at the sampling port location; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00(2005)

. (a) measurements to determine O 2 concentration must be made at the same time and location as the measurements for formaldehyde or COconcentration. iii. Measure moisture (1) Method 4 of 40 (a) measurements to determinePage 152 of 197

content of thestationary RICE exhaust at the sampling port location; and CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D 6348-03 moisture content must be made at the same time and location as the measurements for formaldehyde or CO concentratio n. iv. Measureformaldehyde at the exhaust of thestationary RICE; or (1) Method 320 or 323 of 40 CFR part 63, appendix A; or ASTM D6348- 03 c , provided in ASTM D6348-03 Annex A5 (Analyte Spiking Techniqu e), the percent R must be greater than or equal to 70 and less than or equal to 130. (a) Formaldehyde concentratio n must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

v. measure CO at the exhaust (1) Method 10 of 40 CFR part (a) CO concentratio n must be at 15 percentPage 153 of 197

of thestationary RICE. 60, appendix A, ASTM Method D6522-00 (2005) a , Method 320 of 40 CFR part 63, appendix A, or ASTM D6348- 03. O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

a You may obtain a copy of ASTM-D6522-00 (2005) from at least one of the following addresses: American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428- 2959, or University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. ASTM-D6522-00 (2005) may be used to test both CI and SI stationary RICE. b You may also use Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03.

c You may obtain a copy of ASTM-D6348-03 from at least one of the following addresses: American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428-2959, or University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. 28. Table 5 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 5 to Subpart ZZZZ of Part 63. Initial Compliance with Emission Limitations and Operating Limitations**  As stated in §§63.6612, 63.6625 and 63.6630, you must initially comply with the emission and operating limitations as required by the following:

**For each . . . Complying with the**  **requirement to . . .**  **You have demonstrated**  **initial compliance if . . .** Page 154 of 197

1. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions and using oxidation catalyst, and using a CPMS i. The average reduction of emissions of CO determined from the initial performance test achieves the required CO percent reduction; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test.Page 155 of 197

2. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, using oxidation catalyst, and using a CPMS i. The average CO concentration determined from the initial performance test is less than or equal to the CO emission limitation; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial p erformance test. 3. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions and not using oxidation catalyst i. The average reduction of emissions of CO determined from the initial performance test achieves the required CO percent reduction; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded thePage 156 of 197

approved operating parameters (if any) during the initial performance test. 4. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, and not using oxidation catalyst i. The average CO concentration determined from the initial performance test is less than or equal to the CO emission limitation; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test.Page 157 of 197

5. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions, and using a CEMS i. You have installed a CEMS to continuously monitor CO and either O 2 or CO 2 at both the inlet and outlet of the oxidation catalyst according to the requirements in §63.6625(a); and

ii. You have conducted a performance evaluation of your CEMS using PS 3 and 4A of 40 CFR part 60, appendix B; and iii. The average reduction of CO calculated using §63.6620 equals or exceeds the required percent reduction. The initial test comprises the first 4-hour period after successful validation of the CEMS. Compliance is based on the average percent reduction achieved during the 4-hour period.Page 158 of 197

6. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, and using a CEMS i. You have installed a CEMS to continuously monitor CO and either O 2 or CO 2 at the outlet of the oxidation catalyst according to the requirements in §63.6625(a); and

ii. You have conducted a performance evaluation of your CEMS using PS 3 and 4A of 40 CFR part 60, appendix B; and iii. The average concentration of CO calculated using §63.6620 is less than or equal to the CO emission limitation. The initial test comprises the first 4-hour period after successful validation of the CEMS. Compliance is based on the average concentration measured during the 4-hour period. 7. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and u sing NSCR i. The average reduction of emissions of formaldehyde determined from the initial performance test is equal to or greater than the required formaldehydePage 159 of 197

percent reduction, or the average reduction of emissions of THC determined from the initial performance test is equal to or greater than 30 percent; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test. 8. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and not using NSCR i. The average reduction of emissions of formaldehyde determined from the initial performance test is equal to or greater than the required formaldehyde percent reduction; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according toPage 160 of 197

the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test. 9. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Limit the concentration of formaldehyde i n the stationary RICE exhaust and using oxidation catalyst or NSCR i. The average formaldehyde concentration, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde emission limitation; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test. 10. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE a. Limit the concentration of formaldehyde in the stationary RICE exhaust and not using oxidation catalyst or NSCR i. The average formaldehyde concentration, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde e missionPage 161 of 197

250 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency 4SRB stationary RICE >500 HP located at a major source of HAP. limitation; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test.11. Existing nonemergency stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency stationary CI RICE 300<HP ≤ 500 located at an area source of HAP. a. Reduce CO emissions. i. The average reduction of emissions of CO or formaldehyde, as applicable determined from the initial performance test is equal to or greater than the required CO or formaldehyde, as applicable, percent reduction.12. Existing nonemergency stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency stationary CI RICE 300<HP ≤ 500 located at an area source of HAP. a. Limit the concentration of formaldehyde or CO in the stationary RICE exhaust. i. The average formaldehyde or CO concentration, as applicable, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde or CO emission limitation, as applicable.13. Existing nonemergency 4SLB a. Install an oxidation catalyst i. You have conducted anPage 162 of 197

stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year initial compliance demonstration as specified in §63.6630(e) to show that the average reduction of emissions of CO is 93 percent or more, or the average CO concentration is less than or equal to 47 ppmvd at 15 percent O 2 ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b), or you have installed equipment to automatically shut down the engine if the catalyst inlet temperature exceeds 1350°F.14. Existing nonemergency 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install NSCR i. You have conducted an initial compliance demonstration as specified in §63.6630(e) to show that the average reduction of emissions of CO is 75 percent or more, or the average reduction of emissions of THC is 30 percent or more ii. You have installed a CPMS to continuously monitor catalystPage 163 of 197

inlet temperature according to the requirements in §63.6625(b), or you have installed equipment to automatically shut down the engine if the catalyst inlet temperature exceeds 1250°F.

29. Table 6 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 6 to Subpart ZZZZ of Part 63. Continuous Compliance with Emission Limitations, Operating Limitations, Work Practices, and**  **Management Practices** As stated in §63.6640, you must continuously comply with the emissions and operating limitations and work or management practices as required by the following:

**For each . . . Complying with the**  **requirement to . .**

**. You must**  **demonstrate continuous**  **compliance by**

**. . .** 1. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, and new orreconstructed nonemergency CI a. Reduce CO emissions and using an oxidation catalyst, and using a CPMS i. Conducting semiannual performance tests for CO to demonstrate that the required CO percent reduction is achieved a ; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 164 of 197

stationary RICE >500 HP located at a major source of HAP. i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating limita t ions for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 2. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, and new orreconstructed nonemergency CI stationary RICE >500 HP located at a major source of HAP. a. Reduce CO emissions and not using an oxidation catalyst, and using a CPMS i. Conducting semiannual performance tests for CO to demonstrate that the required CO percent reduction is achieved a ; and ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining thePage 165 of 197

4-hour rolling a verages within the operating l imitations for the operating parameters established during the performance test. 3. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, new orreconstructed nonemergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and using a CEMS i. Collecting the monitoring data according to §63.6625(a), reducing the measurements to 1- hour averages, calculating the percent reduction o r concentration of CO emissions according to §63.6620; and ii. Demonstrating that the catalyst achieves the required percent reduction of CO emissions over the 4-hour averaging p eriod, or that the emission remain at or below the CO concentration limit; and iii. Conducting an a nnual RATA of your C EMS using PS 3 and 4A of 40 CFR part 60, appendix B, as well as daily and periodic data quality checks in accordance with 40 CFR part 60, appendix F,Page 166 of 197

procedure 1. 4. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and using NSCR i. Collecting the catalyst inlet temperature data according to §63.6625(b); and ii. reducing these data to 4-hour rolling averages; and iii. Maintaining the 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and iv. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 5. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and not using NSCR i. Collecting the approved operating parameter (if any) data according to §63.6625(b); and ii. Reducing these data to 4-hour rolling averages; and iii. Maintaining the 4-hour rolling a verages within thePage 167 of 197

operating l imitations for the operating parameters established during the performance test. 6. Non-emergency 4SRB stationary RICE with a brake HP ≥ 5,000 located at a major source of HAP. a. Reduce formaldehyde emissions Conducting semiannual performance tests f or formaldehyde to demonstrate that the required formaldehyde percent reduction is achieved, or to demonstrate that the average reduction of emissions of THC d etermined from the p erformance test is e qual to or greater than 30 percent. a 7. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP and new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP. a. Limit the concentration of formaldehyde i n the stationary RICE exhaust and using oxidation catalyst or NSCR i. Conducting semiannual performance tests f or formaldehyde to demonstrate that your emissions remain at or below the formaldehyde concentration limit a ; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining thePage 168 of 197

4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 8. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP and new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP. a. Limit the concentration of formaldehyde in the stationary RICE exhaust and not using oxidation catalyst or NSCR i. Conducting semiannual performance tests f or formaldehyde to demonstrate that your emissions remain at or below the formaldehyde concentration limit a ; and ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for thePage 169 of 197

operating parameters established during the performance test. 9. Existing emergency and black start stationary RICE ≤ 500 HP located at a major source ofHAP, existing nonemergency stationary RICE <100 HP located at a major source of HAP, existing emergency and black start stationary RICE located at an area source of HAP,existing nonemergency stationary CI RICE ≤ 300 HP located at an area source ofHAP, existing nonemergency 2SLB stationary RICE located at an area source of HAP,existing nonemergency stationary SI RICE located at an area source of HAP which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis, existing non-emergency 4SLB and 4SRB a. Work or Management practices. i. Operating and maintaining the stationary RICE according to the manufacturer’s emission-related operation and maintenance instructions; or ii. Develop and follow your own maintenance plan which must provide to the extent p racticable for the maintenance and operation of the engine in a manner consistent with good air pollution control practice for minimizing emissions.Page 170 of 197

stationary RICE ≤ 500 HP located at an area source ofHAP, existing nonemergency 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that operate 24 hours or less per calendar year, andexisting nonemergency 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that are remote stationary RICE. 10. Existing stationary CI RICE >500 HP that are not limited use stationary RICE. a. Reduce CO emissions, or l i mit the concentration of CO in the stationary RICE exhaust, and using oxidation catalyst i. Conducting performance tests every 8,760 hours or 3 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 171 of 197

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 11. Existing stationary CI RICE >500 HP that are not limited use stationary RICE. a. Reduce CO emissions, or l i mit the concentration of CO in the stationary RICE exhaust, and not using oxidation catalyst i. Conducting performance tests every 8,760 hours or 3 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; andPage 172 of 197

ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the operating parameters established during the performance test. 12. Existing limited use CI stationary RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and using an oxidation catalyst i. Conducting performance tests every 8,760 hours or 5 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 173 of 197

i ii. Reducing these data to 4-hour rolling averages; and iv. Maintaining th e 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 13. Existing limited use CI stationary RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and not using an oxidation catalyst i. Conducting performance tests every 8,760 hours or 5 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; andPage 174 of 197

ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating limita t ions for the operating parameters established during the performance test.14. Existing nonemergency 4SLB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install an oxidation catalyst i. Conducting annual compliance demonstrations as specified in §63. 6 640(c) to show that the average reduction of emissions of CO is 9 3 percent or more, or the average CO concentration is less than or equal to 47 ppmvd at 15 percent O 2 ; and either ii. Collecting the catalyst inlet temperature data according to §63.6625(b), r educing these data to 4-hour rolling averages; and maintaining the 4- hour rollingPage 175 of 197

a verages within the operating l imitations for the catalyst inlet temperature; or iii. Immediately shutting down the engine if the catalyst inlet t emperature exceeds 1350° F.15. Existing nonemergency 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install NSCR i. Conducting annual compliance demonstrations as specified in §63. 6 640(c) to show that the average reduction of emissions of CO is 75 p ercent or more, or the average reduction of e missions of THC is 30 percent or more ; and either ii. Collecting the catalyst inlet temperature data according to §63.6625(b), r educing these data to 4-hour rolling averages; and maintaining the 4- hour rolling a verages within the operating l imitations for the catalyst inlet temperature; or iii. Immediately shutting down the engine if the catalyst inlet t emperature exceeds 1250° F.Page 176 of 197

a After you have demonstrated compliance for two consecutive tests, you may reduce the frequency of subsequent performance tests to annually. If the results of any subsequent annual performance test indicate the stationary RICE is not in compliance with the CO or formaldehyde emission limitation, or you deviate from any of your operating limitations, you must resume semiannual performance tests. 30. Table 7 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 7 to Subpart ZZZZ of Part 63. Requirements for Reports** As stated in §63.6650, you must comply with the following requirements for reports:

**For each . .**

**. You must**  **submit a . .**

**. The report must**  **contain . . . You must submit**  **the report . . .** 1. Existingnonemergency, non-black start stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP;existing nonemergency, non-black start stationary CI RICE >500 HP located at a major source of HAP;existing nonemergency 4SRB stationary RICE >500 HP located at a Compliance report a. If there are no deviations from any emission limitations or operating limitations that apply to you, a statement that there were no deviations from the emission limitations or operating limitations during the reporting period. If there were no periods during which the CMS, including CEMS and CPMS,was out-ofcontrol, as specified in §63.8(c)(7), a i. Semiannually according to the requirements in §63.6650(b)(1)- (5) for engines that are not limited use stationary RICE subject to numerical emission limitations; and ii. Annually according to the requirements in §63.6650(b)(6)- (9) for engines that are limited use stationary RICE subject to numerical emission limitations.Page 177 of 197

major source of HAP;existing nonemergency, non-black start stationary CI RICE >300 HP located at an area source of HAP; new or reconstructed non-emergency stationary RICE >500 HP located at a major source of HAP; and new or reconstructed non-emergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP statement that there were not periods during which the CMSwas out-ofcontrol during the reporting period; or b. If you had a deviation from any emission limitation or operating limitation during the reporting period, the information in §63.6650(d). If there were periods during which the CMS, including CEMS and CPMS, was out-of-control, as specified in §63.8(c)(7), the information in §63.6650(e); or i. Semiannually according to the requirements in §63.6650(b).

c. If you had a malfunction during the reporting period, the information in §63.6650(c)(4). i. Semiannually according to the requirements in §63.6650(b).

2. New or reconstructed non-emergency stationary RICE that combusts landfill gas or digester gas equivalent to Report a. The fuel flow rate of each fuel and the heating values that were used in your calculations, and you must demonstrate that the percentage i. Annually, according to the requirements in §63.6650.Page 178 of 197

10 percent or more of the gross heat input on an annual basis of heat input provided by landfill gas or digester gas, is equivalent to 10 percent or more of the gross heat input on an annual basis; and b. The operating limits provided in your federally enforceable permit, and any deviations from these limits; and i. See item 2.a.i.

c. Any problems or errors suspected with the meters. i. See item 2.a.i.

3. Existingnonemergency, non-black start 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that operate more than 24 hours per calendar year Compliance report a. The results of the annual compliance demonstration, if conducted during the reporting period. i. Semiannually according to the requirements in §63.6650(b)(1)- (5)

31. Appendix A to Subpart ZZZZ of Part 63 is added to read

as follows:Page 179 of 197

**Appendix A Protocol for Using an Electrochemical Analyzer to Determine**  **Oxygen and Carbon Monoxide Concentrations from Certain Engines**

1.0 Scope and Application. What is this Protocol? This protocol is a procedure for using portable electrochemical (EC) cells for measuring carbon monoxide (CO) and oxygen (O 2 )

concentrations in controlled and uncontrolled emissions from existing stationary 4-stroke lean burn and 4-stroke rich burn reciprocating internal combustion engines as specified in the applicable rule. 1.1 Analytes. What does this protocol determine? This protocol measures the engine exhaust gas concentrations of carbon monoxide (CO) and oxygen (O 2 ). **Analyte CAS No.**  **S ensitivity**  Carbon monoxide (CO) 630-08-0 Minimum detectable limit should be 2

percent of the nominal range or 1 ppm, whichever is less restrictive. Oxygen (O 2 ) 7782-44-7

1.2 Applicability. When is this protocol acceptable? This protocol is applicable to 40 CFR part 63, subpart ZZZZ. Because of inherent cross sensitivities of EC cells, you must not apply this protocol to other emissions sources without specific instruction to that effect. 1.3 Data Quality Objectives. How good must my collected data be?Page 180 of 197

Refer to Section 13 to verify and document acceptable analyzer performance. 1.4 Range. What is the targeted analytical range for this protocol? The measurement system and EC cell design(s) conforming to this protocol will determine the analytical range for each gas component. The nominal ranges are defined by choosing up-scale calibration gas concentrations near the maximum anticipated flue gas concentrations for CO and O 2 , or no more than twice the permitted CO level. 1.5 Sensitivity. What minimum detectable limit will this protocol yield for a particular gas component? The minimum detectable limit depends on the nominal range and resolution of the specific EC cell used, and the signal to noise ratio of the measurement system. The minimum detectable limit should be 2 percent of the nominal range or 1 ppm, whichever is

less restrictive. 2.0 Summary of Protocol In this protocol, a gas sample is extracted from an engine exhaust system and then conveyed to a portable EC analyzer for

measurement of CO and O 2 gas concentrations. This method provides measurement system performance specifications and sampling protocols to ensure reliable data. You may use additions to, or modifications of vendor supplied measurement systems (e.g.,Page 181 of 197

heated or unheated sample lines, thermocouples, flow meters, selective gas scrubbers, etc.) to meet the design specifications of this protocol. Do not make changes to the measurement system from the as-verified configuration (Section 3.12).

3.0 Definitions

3.1 Measurement System . The total equipment required for the

measurement of CO and O 2 concentrations. The measurement system consists of the following major subsystems:

3.1.1 Data Recorder . A strip chart recorder, computer or digital recorder for logging measurement data from the analyzer output. You may record measurement data from the digital data display manually or electronically. 3.1.2 Electrochemical (EC) Cell . A device, similar to a fuel cell, used to sense the presence of a specific analyte and generate an electrical current output proportional to the analyte concentration.

3.1.3 Interference Gas Scrubber . A device used to remove or neutralize chemical compounds that may interfere with the selective operation of an EC cell. 3.1.4 Moisture Removal System . Any device used to reduce the concentration of moisture in the sample stream so as to protect the EC cells from the damaging effects of condensation and to minimize errors in measurements caused by the scrubbing of soluble gases.Page 182 of 197

3.1.5 Sample Interface . The portion of the system used for one or more of the following: sample acquisition; sample transport; sample conditioning or protection of the EC cell from any degrading effects of the engine exhaust effluent; removal of particulate matter and condensed moisture. 3.2 Nominal Range . The range of analyte concentrations over which each EC cell is operated (normally 25 percent to 150 percent of up-scale calibration gas value). Several nominal ranges can be used for any given cell so long as the calibration and repeatability checks for that range remain within specifications.

3.3 Calibration Gas . A vendor certified concentration of a specific analyte in an appropriate balance gas.

3.4 Zero Calibration Error . The analyte concentration output exhibited by the EC cell in response to zero-level calibration

gas. 3.5 Up-Scale Calibration Error . The mean of the difference between the analyte concentration exhibited by the EC cell and the certified concentration of the up-scale calibration gas.

3.6 Interference Check . A procedure for quantifying analytical interference from components in the engine exhaust gas other than the targeted analytes. 3.7 Repeatability Check . A protocol for demonstrating that an EC cell operated over a given nominal analyte concentration rangePage 183 of 197

provides a stable and consistent response and is not significantly affected by repeated exposure to that gas. 3.8 Sample Flow Rate . The flow rate of the gas sample as it passes through the EC cell. In some situations, EC cells can experience drift with changes in flow rate. The flow rate must be monitored and documented during all phases of a sampling run. 3.9 Sampling Run . A timed three-phase event whereby an EC cell’s response rises and plateaus in a sample conditioning phase, remains relatively constant during a measurement data phase, then declines during a refresh phase. The sample conditioning phase exposes the EC cell to the gas sample for a length of time sufficient to reach a constant response. The measurement data phase is the time interval during which gas sample measurements can be made that meet the acceptance criteria of this protocol. The refresh phase then purges the EC cells with CO-free air. The refresh phase replenishes requisite O 2 and moisture in the electrolyte reserve and provides a mechanism to de-gas or desorb any interference gas scrubbers or filters so as to enable a stable CO EC cell response. There are four primary types of sampling runs: pre- sampling calibrations; stack gas sampling; post-sampling calibration checks; and measurement system repeatability checks. Stack gas sampling runs can be chained together for extended evaluations, providing all other procedural specifications are met.Page 184 of 197

3.10 Sampling Day . A time not to exceed twelve hours from the time of the pre-sampling calibration to the post-sampling calibration check. During this time, stack gas sampling runs can be repeated without repeated recalibrations, providing all other sampling specifications have been met. 3.11 Pre-Sampling Calibration/Post-Sampling Calibration Check. The protocols executed at the beginning and end of each sampling day to bracket measurement readings with controlled performance

checks. 3.12 Performance-Established Configuration . The EC cell and sampling system configuration that existed at the time that it initially met the performance requirements of this protocol.

4.0 Interferences. When present in sufficient concentrations, NO and NO 2 are two gas species that have been reported to interfere with CO

concentration measurements. In the likelihood of this occurrence, it is the protocol user’s responsibility to employ and properly maintain an appropriate CO EC cell filter or scrubber for removal of these gases, as described in Section

6.2.12. 5.0 Safety. [Reserved] 6.0 Equipment and Supplies. 6.1 What equipment do I need for the measurement system?Page 185 of 197

The system must maintain the gas sample at conditions that will prevent moisture condensation in the sample transport lines, both before and as the sample gas contacts the EC cells. The essential components of the measurement system are described

below. 6.2 Measurement System Components. 6.2.1 Sample Probe . A single extraction-point probe constructed of glass, stainless steel or other non-reactive material, and of length sufficient to reach any designated sampling point. The sample probe must be designed to prevent plugging due to condensation or particulate matter. 6.2.2 Sample Line . Non-reactive tubing to transport the effluent from the sample probe to the EC cell. 6.2.3 Calibration Assembly (optional) . A three-way valve assembly or equivalent to introduce calibration gases at ambient pressure at the exit end of the sample probe during calibration checks. The assembly must be designed such that only stack gas or calibration gas flows in the sample line and all gases flow through any gas path filters. 6.2.4 Particulate Filter (optional) . Filters before the inlet of the EC cell to prevent accumulation of particulate material in the measurement system and extend the useful life of the components. All filters must be fabricated of materials that are non-reactive to the gas mixtures being sampled.Page 186 of 197

6.2.5 Sample Pump . A leak-free pump to provide undiluted sample gas to the system at a flow rate sufficient to minimize the response time of the measurement system. If located upstream of the EC cells, the pump must be constructed of a material that is non-reactive to the gas mixtures being sampled. 6.2.8 Sample Flow Rate Monitoring . An adjustable rotameter or equivalent device used to adjust and maintain the sample flow rate through the analyzer as prescribed. 6.2.9 Sample Gas Manifold (optional) . A manifold to divert a portion of the sample gas stream to the analyzer and the remainder to a by-pass discharge vent. The sample gas manifold may also include provisions for introducing calibration gases directly to the analyzer. The manifold must be constructed of a material that is non-reactive to the gas mixtures being sampled.

6.2.10 EC cell . A device containing one or more EC cells to

determine the CO and O 2 concentrations in the sample gas stream. The EC cell(s) must meet the applicable performance specifications of Section 13 of this protocol.

6.2.11 Data Recorder . A strip chart recorder, computer or digital recorder to make a record of analyzer output data. The data recorder resolution (i.e., readability) must be no greater than 1 ppm for CO; 0.1 percent for O 2 ; and one degree (either o C

or o F) for temperature. Alternatively, you may use a digital orPage 187 of 197

analog meter having the same resolution to observe and manually record the analyzer responses.

6.2.12 Interference Gas Filter or Scrubber . A device to remove interfering compounds upstream of the CO EC cell. Specificinterference gas filters or scrubbers used in the performanceestablished configuration of the analyzer must continue to be

used. Such a filter or scrubber must have a means to determine when the removal agent is exhausted. Periodically replace or replenish it in accordance with the manufacturer’s

recommendations. 6.2.13 EC Cell Temperature Device . A temperature measurement device (e.g., thermocouple, thermistor or equivalent) to monitor EC cell temperature. The temperature may be monitored within or at the surface of a cell, or in close proximity to the cells so as to indicate the operating temperature of the cells. Do not operate the analyzer outside the manufacturer’s recommended operating temperature range. 7.0 Reagents and Standards. What calibration gases are needed?

7.1 Calibration Gases . CO calibration gases for the EC cell must be CO in nitrogen or CO in a mixture of nitrogen and O 2. Use CO calibration gases with labeled concentration values certified by the manufacturer to be within ± 5 percent of the label value. Dry ambient air (20.9 percent O 2 ) is acceptable for calibrationPage 188 of 197

of the O 2 cell. If needed, any lower percentage O 2 calibration gas must be a mixture of O 2 in nitrogen.

7.1.1 Up-Scale CO Calibration Gas Concentration. Choose one or more up-scale gas concentrations such that the average of the stack gas measurements for each stack gas sampling run are between 25 and 150 percent of those concentrations. Alternatively, choose an up-scale gas that does not exceed twice the concentration of the applicable outletstandard. If a measured gas value exceeds 150 percent of the upscale CO calibration gas value at any time during the stack gas sampling run, the run must be discarded and repeated.

7.1.2 Up-Scale O 2 Calibration Gas Concentration.

Select an O 2 gas concentration such that the difference between the gas concentration and the average stack gas measurement or reading for each sample run is less than 15 percent O 2 . When the average exhaust gas O 2 readings are above 6 percent, you may use dry ambient air (20.9 percent O 2 ) for the up-scale O 2 calibration

gas.

7.1.3 Zero Gas . Use an inert gas that contains less than 0.25 percent of the up-scale CO calibration gas concentration. You may use dry air that is free from ambient CO and other combustion gas products (e.g., CO 2 ). 8.0 Sample Collection and Analysis 8.1 Selection of Sampling Sites

**.**Page 189 of 197

8.1.1 Control Device Inlet. Select a sampling site sufficiently downstream of the engine so that the combustion gases should be well mixed. Use a single sampling extraction point near the center of the duct (e.g., within the 10 percent centroidal area), unless instructed otherwise.

8.1.2 Exhaust Gas Outlet. Select a sampling site located at least two stack diameters downstream of any disturbance (e.g.,turbocharger exhaust, crossover junction or recirculation takeoff) and at least one-half stack diameter upstream of the gas discharge to the atmosphere. Use a single sampling extraction point near the center of the duct (e.g., within the 10 percent centroidal area), unless instructed otherwise. 8.2 Stack Gas Collection and Analysis

**.** Prior to the first stack gas sampling run, conduct that the pre-sampling calibration in accordance with Section 10.1. Use Figure 1 to record all data. Zero the analyzer with zero gas. Confirm and record that the scrubber media color is correct and not exhausted. Then position the probe at the sampling point and begin the sampling run at the same flow rate used during the up-scale calibration. Record the start time. Record all EC cell output responses, the EC cell temperature, and the flow rate during the “sample conditioning phase” once per minute until constant readings are obtained. Then begin the “measurement data phase” and record readings every 15 seconds for at least two minutes (or eight readings),Page 190 of 197

or as otherwise required to achieve two continuous minutes of data that meet the specification given in Section 13.1. Finally, perform the “refresh phase” by introducing dry air, free from CO and other combustion gases, until several minute-to-minute readings of consistent value have been obtained. For each run use the “measurement data phase” readings to calculate the average stack gas CO and O 2 concentrations. 8.3 EC Cell Temperature

**.** During each stack gas sampling run, measure and record the temperature of the EC cells. The temperature during each run must not vary more than ± 10°F. The overall EC cell temperature variation must be less than ± 20°F from the pre-sampling calibration to the final post-sampling

calibration check.

8.4 EC Cell Flow Rate. Maintain t he EC cell sample flow rate so that it does not vary by more than ± 10 percent throughout the pre-sampling calibration, stack gas sampling and post-sampling calibration check. Alternatively, the EC cell sample flow rate can be maintained within a tolerance range that does not affect the gas concentration readings by more than ± 3 percent, as instructed by the EC cell manufacturer. 9.0 Quality Control (Reserved)

10.0 Calibration and Standardization 10.1 Pre-Sampling Calibration

**.** Conduct the following protocol once for each nominal range to be used on each EC cell beforePage 191 of 197

performing a stack gas sampling run on each field sampling day. Repeat the calibration if you replace an EC cell before completing all of the sampling runs. There is no prescribed order for calibration of the EC cells; however, each cell must complete the measurement data phase during calibration. Assemble the measurement system by following the manufacturer's recommended protocols including for preparing and preconditioning the EC cell. Assure the measurement system has no leaks and verify the gas scrubbing agent is not depleted. Use Figure 1 to record all data.

10.1.1 Zero Calibration. For both the O 2 and CO cells, introduce zero gas to the measurement system (e.g., at the calibration assembly) and record the concentration reading every minute until readings are constant for at least two consecutive minutes. Include the time, EC cell temperature, and sample flow rate. Repeat the steps in this section at least once to verify the zero calibration for each component gas.

10.1.2 Zero Calibration Tolerance

**.** For each zero gas introduction, the zero level output must be less than or equal to ± 3 percent of the up-scale gas value or ± 1 ppm, whichever is less restrictive, for the CO channel and less than or equal to ± 0.3 percent O 2 for the O 2 channel. 10.1.3 Up-Scale Calibration. Individually introduce each calibration gas to the measurement system (e.g., at thePage 192 of 197

calibration assembly) and record the start time. Record all EC cell output responses, the EC cell temperature, and the flow rate during this “sample conditioning phase” once per minute until readings are constant for at least two minutes. Then begin the “measurement data phase” and record readings every 15 seconds for a total of two minutes, or as otherwise required. Finally, perform the “refresh phase” by introducing dry air, free from CO and other combustion gases, until readings are constant for at least two consecutive minutes. Then repeat the steps in this section at least once to verify the calibration for each component gas. Introduce all gases to flow through the entire sample handling system (i.e., at the exit end of the sampling probe or the calibration assembly). 10.1.4 Up-Scale Calibration Error

**.** The mean of the difference of the “measurement data phase” readings from the reported standard gas value must be less than or equal to ± 5 percent or ± 1 ppm for CO or ± 0.5 percent O 2 , whichever is less restrictive, respectively. The maximum allowable deviation from the mean measured value of any single "measurement data phase" reading must be less than or equal to ± 2 percent or ± 1 ppm for CO or ± 0.5 percent O 2 , whichever is less restrictive, respectively. 10.2 Post-Sampling Calibration Check . Conduct a stack gas postsampling calibration check after the stack gas sampling run or

set of runs and within 12 hours of the initial calibration.Page 193 of 197

Conduct up-scale and zero calibration checks using the protocol in Section 10.1. Make no changes to the sampling system or EC cell calibration until all post-sampling calibration checks have been recorded. If either the zero or up-scale calibration error exceeds the respective specification in Sections 10.1.2 and 10.1.4 then all measurement data collected since the previous

successful calibrations are invalid and re-calibration and resampling are required. If the sampling system is disassembled or the EC cell calibration is adjusted, repeat the calibration check before conducting the next analyzer sampling run. 11.0 Analytical Procedure The analytical procedure is fully discussed in Section 8. 12.0 Calculations and Data Analysis

Determine the CO and O 2 concentrations for each stack gas sampling run by calculating the mean gas concentrations of the data recorded during the “measurement data phase”.

13.0 Protocol Performance Use the following protocols to verify consistent analyzer performance during each field sampling day.

13.1 Measurement Data Phase Performance Check . Calculate the mean of the readings from the “measurement data phase”. The

maximum allowable deviation from the mean for each of the individual readings is ± 2 percent, or ± 1 ppm, whichever is

less restrictive. Record the mean value and maximum deviationPage 194 of 197

for each gas monitored. Data must conform to Section 10.1.4. The EC cell temperature and EC cell flow rate must conform to the specifications in Section 8.3 and 8.4 respectively. Example: A measurement data phase is invalid if the maximum deviation of any single reading comprising that mean is greater than ± 2 percent or ± 1 ppm (the default criteria). For example, if the mean = 30 ppm, single readings of below 29 ppm and above 31 ppm are disallowed).

13.2 Interference Check

**.** Before the initial use of the EC cell and interference gas scrubber in the field, and semi-annually thereafter, challenge the interference gas scrubber with an NO 2 gas standard that is generally recognized as representative of diesel-fueled engine NO 2 emission values. Record the response displayed by the CO EC cell and other pertinent data on Figure 1

or a similar form. 13.2.1 Interference Response

**.** The CO interference response should be less than or equal to ± 5 percent of the up-scale CO calibration gas concentration. 13.3 Repeatability Check

**.** Conduct the following check once for each nominal range that is to be used on the CO EC cell within five days prior to each field sampling program. If a field sampling program lasts longer than five days, repeat this check every five days. Immediately repeat the check if the EC cell is replaced or if the EC cell is exposed to gas concentrationsPage 195 of 197

greater than 150 percent of the highest up-scale gas

concentration. 13.3.1 Repeatability Check Procedure . Perform a complete EC cell sampling run (all three phases) by introducing the CO calibration gas to the measurement system and record the response. Follow Section 10.1.3. Use Figure 1 to record all data. Repeat the run three times for a total of four complete runs. During the four repeatability check runs, do not adjust the system except where necessary to achieve the correct calibration gas flow rate at the analyzer. 13.3.2 Repeatability Check Calculations

**.** Determine the highest and lowest average “measurement data phase” CO concentrations from the four repeatability check runs and record the results on Figure 1 or a similar form. The absolute value of the difference between the maximum and minimum average values recorded must not vary more than ± 3 percent or ± 1 ppm of the up-scale gas value,

whichever is less restrictive. 14.0 Pollution Prevention (Reserved) 15.0 Waste Management (Reserved) 16.0 Alternative Procedures (Reserved)

17.0 References (1) “Development of an Electrochemical Cell Emission Analyzer Test Protocol”, Topical Report, Phil Juneau, Emission Monitoring, Inc., July 1997.Page 196 of 197

(2) “Determination of Nitrogen Oxides, Carbon Monoxide, and Oxygen Emissions from Natural Gas-Fired Engines, Boilers, and Process Heaters Using Portable Analyzers”, EMC Conditional TestProtocol 30 (CTM-30), Gas Research Institute Protocol GRI96/0008, Revision 7, October 13, 1997. (3) "ICAC Test Protocol for Periodic Monitoring”, EMC Conditional Test Protocol 34 (CTM-034), The Institute of Clean Air Companies, September 8, 1999. (4) “Code of Federal Regulations”, Protection of Environment, 40 CFR, Part 60, Appendix A, Methods 1-4; 10.

Table 1: Appendix A - Sampling Run Data. Facility________________ Engine I.D.______________ Date_________ Run Type: (__) (__) (__) (__) (X) Pre-Sample Stack Gas Post-Sample Repeatability Calibration Sample Cal. Check Check Run # 1 1 2 2 3 3 4 4 T ime Scrub. OK FlowRate Gas 

## O 2 

## CO O 2 

## CO O 2 

## CO O 2 

## CO

Sample Cond. Phase “ “ “ “

Measurement Data Phase “Page 197 of 197

“ “ “ “ “ “ “ “ “

Mean

Refresh

Phase

“ “ “ “

## Subject: RICE -- Comments on CI RIA and Pipeline issue Attachments: EO_12866_RICE_NESHAP_Reconsideration_Proposal_2060- AQ58_5_16_2012__InteragencyCommentsunderEO13563onPipelines.d ocx From: "Higgins, Cortney" <Cortney_Higgins@omb.eop.gov> To: Melanie King/RTP/USEPA/US@EPA, Larry Sorrels/RTP/USEPA/US@EPA Cc: RobertJ Wayland/RTP/USEPA/US@EPA, Fred Talcott/DC/USEPA/US@EPA Date: 05/16/2012 02:07 PM Subject: RICE -- Comments on CI RIA and Pipeline issue

Hi Melanie and Larry, Below are additional comments on the CI RIA from interagency reviewers: - Table 3-23 on page 3-29 does not fit in that location, as it is a table related to hospitals in the section for irrigation and welding engines. Also, in the paragraph just following Table 3-27 on page 3-32, the acreages included by EPA represent all acreage (irrigated and non-irrigated) and should be noted as such. As it reads now, one could assume that this acreage represents irrigated acreage only. EPA’s statement in that paragraph that the use of on-farm irrigation pumps “...is tied to the amount of agricultural land in production” is also not entirely correct, as there is no set percentage of agricultural land in production that is annually under irrigation. Additionally, the use of engines (and size of engines) is also related to the source of water for irrigated lands. Larger engines will be needed for pumping groundwater from greater depths, whereas smaller electric pumps may be used more appropriately for nearby surface irrigation water. - The CI RICE RIA only shows 18 total irrigation engines >300 hp (see Table 4-5). These numbers appear to go all the way back to the original CI RICE analysis, which was prior to receiving the updated irrigation information from USDA that was used in the SI analysis. Although those numbers aren’t perfect either, that analysis indicated there were likely a little over 5200 CI irrigation engines >300 hp. We also know that the San Joaquin Valley has at least 426 engines in this category (17 Tier 3 with early adoption, 49 Tier 1, 306 Tier 2 – all of these are involved in the issues under consideration in this rule), so the national inventory should be higher. From this, we obviously already know that there are more than 18. - It looks to me like the numbers in the CI RIA weren’t updated after receiving the update information fromUSDA because the 2010 CI rule was already finalized and this is the first time since then that it has been reopened. We should really use the updated USDA-NASS information, realizing that most of the 5200 CI engines >300 hp are going to be at area sources and remote. That also obviously changes the cost/benefits for these engines, and puts a greater emphasis on extending the remoteness relief proposal to CI engines. We aren’t talking about 18 engines that would be affected anymore, we’re now talking about several thousand – many of which are likely on individual farms with individual farmers operating them. Melanie, on the pipeline issue, interrgency reviewers had the following comments: If EPA intends to keep the definition of a pipeline segment to mean only a natural gas pipeline, we agree that the change to the reg text in paragraph 3 of 63.6675 set forth below is needed. In addition, we suggest minor modifications be made to the preamble at pages 10-11 and 45 to clarify that the alternative of 5 buildings in 0.25 mile radius for non-pipeline engines will also be applied to engines along hazardous liquid pipelines. See attached. Thanks, Cortney

________________________________________________

## Cortney Higgins, PhD Policy Analyst OMB/OIRA/NRE 202.395.7856 chiggins@omb.eop.gov (See attached file: EO_12866_RICE_NESHAP_Reconsideration_Proposal_2060- AQ58_5_16_2012_InteragencyCommentsunderEO13563onPipelines.docx)***E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

**E.O. 12866 NESHAP RICE; NSPS For Stationary Internal Combustion Engines 2060-AQ58 Proposal 20120410** 

6560-50-P

**ENVIRONMENTAL PROTECTION AGENCY**

**40 CFR Part 63 [EPA-HQ-OAR-2008-0708, FRL-XXXX-Y]**  **RIN 2060-AQ58**

**National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source**  **Performance Standards for Stationary Internal Combustion Engines**

**AGENCY:** Environmental Protection Agency (EPA).

**ACTION:** Proposed rule.

**SUMMARY:** The EPA is proposing amendments to the national emission standards for hazardous air pollutants for stationary reciprocating internal combustion engines under section 112 of the Clean Air Act. The proposed amendments include alternative testing options for certain large spark ignition (generally natural gas-fueled) stationary reciprocating internal combustion engines, management practices for a subset of existing spark ignition stationary reciprocating internal combustion engines in sparsely populated areas and alternative monitoring and compliance options for the same engines in populated areas. ThePage 2 of 197 EPA is also proposing to include a limited temporary allowance for existing stationary emergency area source engines to be used for peak shaving and non-emergency demand response. In addition, the EPA is proposing to increase the hours that stationary emergency engines may be used for emergency demand response. Theproposed amendments also correct minor mistakes in the preexisting regulations.

**DATES** : Comments . Comments must be received on or before [INSERT DATE 45 DAYS AFTER PUBLICATION IN THE FEDERAL REGISTER], or 30 days after date of public meeting if later. Public Meeting . If anyone contacts us requesting to speak at a public meeting by [INSERT DATE 7 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER], a public meeting will be held on [INSERT DATE 15 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. If you are interested in attending the public meeting, contact Ms. Pamela Garrett at (919) 541-7966 to verify that a meeting will be held.

**ADDRESSES** : Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2008-0708, by one of the following methods:

 www.regulations.gov: Follow the on-line instructions for submitting comments.

 Email: a-and-r-docket@epa.gov.

 Fax: (202) 566-1741.

 Mail: Air and Radiation Docket and Information Center,Page 3 of 197 Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW, Washington, DC 20460. Please include a total of two copies. The EPA requests a separate copy also be sent to the contact person identified below (see **FOR FURTHER INFORMATION CONTACT** ).

 Hand Delivery: Air and Radiation Docket and Information Center, U.S. EPA, Room B102, 1301 Constitution Avenue, NW, Washington, DC. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of

boxed information.

Instructions : Direct your comments to Docket ID No. EPA-HQ-OAR2008-0708. The EPA’s policy is that all comments received will be included in the public docket without change and may be made available on-line at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov website is an “anonymous access” system, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without goingPage 4 of 197 through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contactinformation in the body of your comment and with any disk or CDROM you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. Public Meeting : If a public meeting is held, it will be held at the EPA’s campus located at 109 T.W. Alexander Drive in Research Triangle Park, NC or an alternate site nearby.

Docket : All documents in the docket are listed in the www.regulations.gov index. The EPA also relies on documents inDocket ID Nos. EPA-HQ-OAR-2002-0059, EPA-HQ-OAR-2005-0029, EPAHQ-OAR-2005-0030, and EPA-HQ-OAR-2010-0295, and incorporated those dockets into the record for this action. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically inPage 5 of 197 www.regulations.gov or in hard copy at the Air and Radiation Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566- 1744, and the telephone number for the Air Docket is (202) 566-

1742.

**FOR FURTHER INFORMATION CONTACT:** Ms. Melanie King, Energy Strategies Group, Sector Policies and Programs Division (D243- 01), Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number (919) 541-2469; facsimile number (919) 541-5450; email address king.melanie@epa.gov.

**SUPPLEMENTARY INFORMATION** : Organization of This Document

. The following outline is provided to aid in locating information in the preamble.

I. General Information A. Executive Summary B. Does this action apply to me? C. What should I consider as I prepare my comments for the EPA? II. Summary of Proposed Amendments A. Total Hydrocarbon Compliance Demonstration Option B. Emergency Demand Response/Peak Shaving C. Non-Emergency Stationary SI RICE Greater than 500 HP Located at Area Sources D. Stationary Agricultural RICE in San Joaquin Valley E. Remote Areas of Alaska F. Miscellaneous Corrections and Revisions G. Compliance Date III. Summary of Environmental, Energy and Economic Impacts A. What are the air quality impacts? B. What are the cost impacts? C. What are the benefits?Page 6 of 197 D. What are the non-air health, environmental and energy impacts? IV. Solicitation of Public Comments and Participation V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act of 1995 E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks H. Executive Order 13211: Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations

**I. General Information** A. Executive Summary 1. Purpose of the Regulatory Action The purpose of this action is to propose amendments to the national emission standards for hazardous air pollutants (NESHAP) for stationary reciprocating internal combustion engines (RICE) under section 112 of the Clean Air Act (CAA). This proposal was developed to address certain issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments and other communications. This proposal also provides

clarifications and corrects minor mistakes in the current RICE NESHAP and revises the new source performance standards (NSPS)Page 7 of 197 for stationary engines, 40 CFR part 60, subparts IIII and JJJJ, for consistency with the RICE NESHAP. This action is conducted under the authority of section 112 of the CAA, “Hazardous Air Pollutants,” (HAP) which requires the

EPA to establish NESHAP for the control of hazardous air pollutants (HAP) from both new and existing sources in regulated source categories. 2. Summary of the Major Provisions of the Regulatory Action After promulgation of the 2010 RICE NESHAP amendments, the EPA received several petitions for reconsideration, legal challenges, and other communications raising issues of practical implementability, and certain factual information that had not been brought to the EPA’s attention during the rulemaking. The

EPA has considered this information and believes that amendments to the rule to address certain of these issues are appropriate. Therefore, the EPA is proposing to amend 40 CFR part 63, subpart ZZZZ, NESHAP for Stationary RICE. The current regulation applies to owners and operators of existing and new stationary RICE at major and area sources of HAP emissions. The applicability of the rule remains the same and is not changed by this proposal. The EPA is also proposing to amend the NSPS for stationary engines to conform with certain of the amendments proposed for

the NESHAP.Page 8 of 197 The EPA proposes to add an alternative compliance demonstration option for stationary 4-stroke rich burn (4SRB) spark ignition (SI) engines subject to a 76 percent or more formaldehyde reduction. Owners and operators of 4SRB engines would be permitted to demonstrate compliance with the 76 percent formaldehyde reduction emission standard by testing total hydrocarbon (THC) emissions and showing that the engine is achieving at least a 30 percent reduction of THC emissions. The alternative compliance option would provide a less expensive and less complex, but equally effective, method for demonstrating compliance than testing for formaldehyde. Certain stationary RICE are maintained in order to be able to respond to emergency power needs. The EPA proposes to allow owners and operators of such stationary emergency RICE to operate their engines as part of an emergency demand response program within the 100 hours per year that is already permitted for maintenance and testing of the engines. The 100 hours per year allowance would ensure that a sufficient number of hours are permitted for engines to meet independent system operator (ISO) and regional transmission organization (RTO) tariffs and other requirements for participating in various emergency demand response programs and would assist in stabilizing the grid, preventing electrical blackouts and supporting local electric system reliability. A temporary limited allowance that willPage 9 of 197 expire on April 16, 2017, is being proposed for stationary emergency engines located at area sources of HAP emissions to be used for up to 50 hours per year for any non-emergency purpose, including peak shaving. The 50 hours is part of the 100 hours per year total allowance for all types of emergency engine operation (except during emergencies where no other power is available, which is not restricted by the rule). The temporary allowance for peak shaving would give sources time to address reliability issues and develop solutions to reliability issues while facilities are coming into compliance with the National

Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units, which were promulgated on February 16, 2012 (77 FR 9304). The EPA proposes management practices for owners and operators of existing stationary 4-stroke SI engines above 500 horsepower (HP) that are area sources of HAP emissions and where the engines are remote from human activity. A remote area along a natural gas pipeline is defined as a Department of Transportation (DOT) Class 1 pipeline location 1 . If the facility

is along a hazardous liquid pipeline or not on a pipeline, an

1 DOT’s definition of a Class 1 location applies to remote areas along natural gas pipelines (49 C.F.R. § 192.5). For purposes of this proposed rule, a Class 1 location is defined as an offshore area or any class location unit along a natural gas that has 10 or fewer buildings intended for human occupancy. Deleted: either

Deleted: , or, if

Deleted: if

Deleted: or a hazardous liquid pipelinePage 10 of 197 area with fewer than 5 buildings intended for human occupancy within a 0.25 mile radius of the facility would be a remote

area . The EPA proposes that these sources be subject to management practices rather than aftertreatment-forcing standards and associated testing and monitoring. This would address reasonable concerns with accessibility, infrastructure, and staffing that stem from the remoteness of the engines and higher costs that would be associated with compliance with the existing requirements. The EPA proposes that existing stationary 4-stroke SI engines above 500 HP at area sources that are in populated areas (defined as DOT pipeline Class 2 through Class 4 areas, or if not on a pipeline, if within a 0.25 mile radius of the facility there are more than 5 buildings intended for human occupancy) be subject to an equipment standard that requires the installation of HAP-reducing aftertreatment. Sources would be required to test their engines to demonstrate compliance initially, perform catalyst activity check-ups, and either monitor the catalyst inlet temperature continuously or employ high temperature shutdown devices to protect the catalyst. To address how certain existing compression ignition (CI) engines are currently regulated, the EPA proposes to specify that any existing certified CI engine above 300 HP at an area

source of HAP emissions that was certified to meet the Tier 3 engine standards and was installed before June 12, 2006, is in Deleted: there are 5 or less buildings intended for human occupancyPage 11 of 197 compliance with the NESHAP. This provision would create regulatory consistency between the same engines installed before and after June 12, 2006. The EPA is proposing amendments to the requirements for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are subject to state and locally enforceable requirements requiring replacement of the engine by January 1, 2018. This is meant to deal with a specific concern regarding the interaction of the NESHAP with certain rules for agricultural engines in the San Joaquin Valley in California. The EPA is proposing to allow these engines to meet management practices under the RICE NESHAP for a period of 2 years until May 3, 2015. This provision would deal with the issue of owners and operators having to install controls on their engines in order to meet the RICE NESHAP, and then having to replace their engines shortly thereafter due to state and local rules specifying the replacement of engines. Owners and operators will have two additional years to replace their engines without having to install controls, but will be required to use management practices during that period. The last major change the EPA proposes to make is to

broaden the definition of remote area sources of Alaska in the RICE NESHAP. Currently, remote areas are those that are not on the Federal Aid Highway System (FAHS). This change would permitPage 12 of 197 existing stationary CI engines at other remote area sources in Alaska to meet management practices as opposed to emission standards likely necessitating aftertreatment. These remote areas have the same challenges as areas not on the FAHS, and complying with the current rule would similarly be prohibitively costly and potentially infeasible. In addition to area sources located in areas of Alaska that are not accessible by the FAHS being defined as remote and subject to management practices, the EPA also proposes that any stationary RICE in Alaska meeting all of the following conditions be subject to management practices: (1) The only connection to the FAHS is through the Alaska Marine Highway System (AMHS), or the stationary RICE operation is within an isolated grid in Alaska that is not connected to the statewide electrical grid referred to as the Alaska Railbelt Grid, and (2) At least 10 percent of the power generated by the stationary RICE on an annual basis is used for residential purposes, and (3) The generating capacity of the area source is less than 12 megawatts, or the stationary RICE is used exclusively for backup power for renewable energy and is used less than 500 hrs per year on a 10 year rolling average.

3. Costs and BenefitsPage 13 of 197 These proposed amendments would reduce the capital and annual costs of the original 2010 amendments by $287 million and $139 million, respectively. The EPA estimates that with the proposed amendments, the capital cost of the rule is $840 million and the annual cost is $490 million ($2010). These proposed amendments would also result in decreases to the reductions estimated in 2013 from the original 2010 RICE

NESHAP amendments. The estimated reductions in 2013 from the 2010 RICE NESHAP rulemaking with these proposed amendments are 2,800 tons per year (tpy) of HAP, 36,000 tpy of carbon monoxide (CO), 2,800 tpy of particulate matter (PM), 9,600 tpy of nitrogen oxide (NOx), and 36,000 tpy of volatile organic compounds (VOC).

The EPA estimates the monetized co-benefits in 2013 of the original 2010 RICE NESHAP amendments with these proposed amendments incorporated to be $830 million to $2,100 million (2010 dollars) at a 3-percent discount rate and $740 million to $1,800 million (2010 dollars) at a 7-percent discount rate. B. Does this action apply to me? Regulated Entities . Categories and entities potentially regulated by this action include: Category NAICS 1 Examples of regulated entities Any industry using a stationary internal 2211 Electric power generation, transmission, or distribution. 622110 Medical and surgical hospitals.Page 14 of 197 combustion engine as defined in the proposed amendments. 48621 Natural gas transmission.

211111 Crude petroleum and natural gas production. 211112 Natural gas liquids producers. 92811 National security.

1 North American Industry Classification System.

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. To determine whether your engine is regulated by this action, you should examine the applicability criteria of this proposed rule. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding **FOR FURTHER INFORMATION CONTACT**

section. C. What should I consider as I prepare my comments for the EPA? 1. Submitting CBI . Do not submit this information to the EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to the EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the

comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket.Page 15 of 197 Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI to only the following address: Ms. Melanie King, c/o OAQPS Document Control Officer (Room C404-02), U.S. EPA, Research Triangle Park, NC 27711, Attention Docket ID No. EPA-HQ-OAR-2008-0708. 2. Tips for Preparing Your Comments. When submitting comments,

remember to: (a) Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number). (b) Follow directions. The EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number. (c) Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. (d) Describe any assumptions and provide any technical information and/or data that you used. (e) If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. (f) Provide specific examples to illustrate your concerns, and suggest alternatives.Page 16 of 197 (g) Explain your views as clearly as possible, avoiding the use of profanity or personal threats. (h) Make sure to submit your comments by the comment period

deadline identified.

Docket . The docket number for this proposed rule is Docket ID No. EPA-HQ-OAR-2008-0708. World Wide Web (WWW) . In addition to being available in the docket, an electronic copy of this proposed rule will be posted on the WWW through the Technology Transfer Network Website (TTN Web). Following signature, the EPA will post a copy of this proposed rule on the TTN’s policy and guidance page for newly proposed or promulgated rules at http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. **II. Summary of Proposed Amendments** This action proposes amendments to the NESHAP for RICE in 40 CFR part 63, subpart ZZZZ. This action also proposes amendments to the NSPS for stationary engines in 40 CFR part 60, subparts IIII and JJJJ. The NESHAP for stationary RICE to regulate emissions of HAP was developed in several stages. The EPA initially addressed stationary RICE greater than 500 HP located at major sources of HAP emissions in 2004 (69 FR 33473). The EPA addressed new stationary RICE less than or equal to 500 HP located at major sources and new stationary RICE located atPage 17 of 197 area sources in 2008 (73 FR 3568). Most recently, requirements for existing stationary RICE less than or equal to 500 HP located at major sources and existing stationary RICE located at area sources were finalized in 2010 (75 FR 9648 and 75 FR 51570). The EPA is proposing to address a number of issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments, and other communications. The EPA is also proposing to revise 40 CFR part 60, subparts IIII and JJJJ for consistency

with the RICE NESHAP and to make minor corrections and clarifications. The following sections present the issues that the EPA is addressing in this action, background information as to why these issues are causing concern among affected stakeholders, and how the EPA proposes to resolve the issues.

A. Total Hydrocarbon Compliance Demonstration Option 1. Background Currently, SI 4SRB non-emergency engines greater than 500 HP located at major sources and existing SI 4SRB non-emergency engines greater than 500 HP located at area sources have the option of meeting either a formaldehyde percent reduction or a formaldehyde concentration standard. Formaldehyde was established in the original 2004 RICE NESHAP as an appropriate surrogate for HAP emissions from 4SRB engines based on industryPage 18 of 197 test data available at that time. Based on testing of stationary lean burn engines conducted at Colorado State University (CSU), the EPA was able to establish CO as a surrogate for HAP for lean burn engines. Rich burn engines were not tested at CSU and the

data the EPA had available at the time that were used to set the standards for rich burn engines did not support the same relationship between CO and HAP reductions for rich burn engines. Therefore, the EPA was unable to establish CO as a surrogate for HAP emissions for rich burn engines and the emission standard for rich burn engines was specified in terms of formaldehyde, the hazardous air pollutant emitted in the largest quantity from stationary engines. The EPA has previously acknowledged that it is significantly more expensive and difficult to test for formaldehyde than for CO, but has been unable in the past to support including the same flexibility for rich burn engines as is currently in the rule for lean burn engines with the option to meet the standards in terms of either formaldehyde or CO. For these reasons and expecting that new data for rich burn engines may become available in the future for the EPA to review and reassess possible surrogates for HAP, the EPA requested comment on this issue when proposing NESHAP for stationary existing engines less than or equal to 500 HP at major sources and all stationary existing engines at area sources in 2009 (74 FRPage 19 of 197 9698). Specifically, the EPA solicited comment on whether it would be appropriate to include an alternative standard in terms of VOC and asked that commenters submit data supporting the relationship between HAP and VOC. Comments the EPA received back on the proposed rule asked that the formaldehyde standards for rich burn engines be replaced with emission standards for THC. The EPA determined at the time that it was not appropriate to adopt an alternative standard in terms of THC (or VOC) for rich burn engines and discussed the reasons why in the 2010 responses

to comments. 2 Compliance with the formaldehyde standard in the rule is, therefore, currently demonstrated by initial and continuous performance testing for formaldehyde. On October 19, 2010, engine manufacturer Dresser-Waukesha submitted a petition for reconsideration of the formaldehyde requirements. The EPA granted the petition for reconsideration on January 5, 2011. (In addition, on November 3, 2010, the Engine Manufacturers Association submitted a petition for judicial review of these requirements.) In the petition for reconsideration, Dresser-Waukesha argued that formaldehyde is

2 Memorandum from Melanie King, EPA Energy Strategies Group to EPA Docket EPA-HQ-OAR-2008-0708. Response to Public Comments on Proposed National Emission Standards for Hazardous Air Pollutants for Existing Stationary Reciprocating Internal Combustion Engines Located at Area Sources of Hazardous Air Pollutant Emissions or Have a Site Rating Less Than or Equal to 500 Brake HP Located at Major Sources of Hazardous Air Pollutant Emissions. August 10, 2010. EPA-HQ-OAR-2008-0708-0557.Page 20 of 197 difficult and costly to measure. The petition requested that the HAP surrogate for 4SRB engines should be THC rather than formaldehyde. Dresser-Waukesha submitted data from testing it conducted illustrating that THC reduction across the catalyst is an appropriate surrogate for HAP reduction across the catalyst. 3 According to the petitioner, testing for THC is easier and less costly and would substantially reduce the burden of the rule for owners and operators of these engines. Testing for formaldehyde emissions could cost more than double that of testing for THC

emissions and on a nationwide basis the EPA estimates that replacing formaldehyde testing with THC testing would result in substantial compliance cost savings annually while achieving the

same reduction in HAP emissions.The EPA has reviewed the data submitted by DresserWaukesha. The data provided indicate that a strong relationship exists between percentage reductions of THC and percentage reductions of formaldehyde (the surrogate for HAP emissions in the NESHAP) on rich burn engines using non-selective catalytic reduction (NSCR). Data analyzed by the EPA indicate that if the NSCR is reducing THC by at least 30 percent from 4SRB engines, formaldehyde emissions are guaranteed to be reduced by at least

3 Letter from Dresser-Waukesha to Melanie King. Follow-up toNovember 18, 2010 Teleconference. December 6, 2010. EPA-HQ-OAR2008-0708-0662.Page 21 of 197 76 percent, which is the percentage reduction required for the relevant engines. Indeed, the percentage reduction of formaldehyde is invariably well above the 76 percent level, and is usually above 90 percent. Therefore, the EPA agrees with the petitioner that for SI 4SRB engines using NSCR and meeting the NESHAP by showing a percentage reduction of HAP, it would be appropriate to allow sources to demonstrate compliance with the NESHAP by showing a THC reduction of at least 30 percent. Including an optional THC compliance demonstration option would reduce the cost of compliance significantly while continuing to

achieve the same level of HAP emission reduction because the emission standards would remain the same. Consequently, the EPA is proposing amendments to allow owners and operators of certain stationary 4SRB engines (i.e., the ones currently subject to a formaldehyde percent reduction requirement) to show compliance with an optional THC compliance demonstration option. The specific amendments the EPA is proposing are presented below.

2. Proposed Amendments The EPA is proposing to add an alternative method of demonstrating compliance with the NESHAP for stationary 4SRB non-emergency engines greater than 500 HP that are located at major sources of HAP emissions and for existing stationary 4SRB non-emergency engines greater than 500 HP that are located at

area sources of HAP emissions that choose to meet thePage 22 of 197 formaldehyde percent reduction requirement of 76 percent or

more. Based on the arguments and evidence presented in the petition discussed above, the EPA is proposing to add a compliance demonstration option for stationary 4SRB engines meeting a 76 percent or more formaldehyde reduction. The compliance demonstration option would be an alternative to the existing method of demonstrating compliance with the formaldehyde percent reduction standard, which is to test engines for formaldehyde. The alternative for owners and operators of 4SRB engines meeting a 76 percent or more formaldehyde reduction would be to test their engines for THC showing that the engine is achieving at least a 30 percent

reduction of THC emissions. Under the proposed amendments, existing and new stationary 4SRB engines greater than 500 HP and located at major sources would still be required to reduce formaldehyde emissions by 76 percent or more or limit the concentration of formaldehyde in the stationary RICE exhaust to 350 parts per billion by volume, dry basis or less at 15 percent oxygen (O 2 ). However, owners and operators choosing to meet the formaldehyde concentration limit would not have the THC demonstration compliance option, because EPA could not verify a clear relationship between concentrations of THC and concentrations of formaldehyde in exhaust from thesePage 23 of 197 SI 4SRB engines. For the reasons discussed in section II.C.1 of this preamble, the EPA is proposing that existing stationary 4SRB non-emergency engines greater than 500 HP located at area sources located in populated areas be subject to an equipment standard and required to install a catalyst. These engines would be subject to testing to demonstrate initially and on an ongoing basis that the catalyst is reducing CO by 75 percent or more, or alternatively that THC emissions are being reduced by 30 percent

or more. Owners and operators of existing stationary 4SRB engines less than or equal to 500 HP who are required to limit the concentration of formaldehyde in the stationary RICE exhaust to 10.3 parts per million by volume, dry basis (ppmvd) or less at 15 percent O 2 do not have the option to demonstrate compliance using THC and must continue to demonstrate compliance by testing for formaldehyde following the methods and procedures specified

in the rule. Owners and operators opting to use the THC compliance demonstration method must demonstrate compliance by showing that the average reduction of THC is equal to or greater than 30 percent. Owners and operators of 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions and demonstrating compliance by using the THC compliance demonstration option must conduct performance testing usingPage 24 of 197 Method 25A of 40 CFR part 60, appendix A – Determination of Total Gaseous Organic Concentration Using a Flame Ionization Analyzer. Measurements of THC at the inlet and the outlet of the NSCR must be on a dry basis and corrected to 15 percent O 2 or equivalent carbon dioxide content. To correct to 15 percent O 2 , dry basis, owners and operators must measure oxygen using Method 3, 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00 (2005) and measure moisture using Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03. Because owners and operators are complying with a percent reduction requirement, the method used must be suitable for the entire range of emissions since pre and post-catalyst emissions must be measured. Method 25A is capable of measuring emissions down to 5 ppmv and is, therefore, an appropriate method for measuring THC emissions for compliance demonstration purposes. The EPA is allowing sources the option to meet a minimum THC percent reduction of 30 percent by using Method 25A of 40 CFR part 60, appendix A to demonstrate compliance with the formaldehyde percent reduction in 40 CFR part 63, subpart ZZZZ. B. Emergency Demand Response/Peak Shaving 1. Background This action also proposes to amend provisions in the RICE NESHAP that currently allow owners and operators to operate stationary emergency engines for up to 15 hours per year as partPage 25 of 197 of a demand response program if the RTO or equivalent balancing authority and transmission operator have determined there are emergency conditions that could lead to a potential electrical blackout, such as unusually low frequency, equipment overload, capacity or energy deficiency, or unacceptable voltage level. The final rule did not allow emergency engines to be used for purposes of peak shaving or other non-emergency purposes as part of a financial arrangement. These provisions were included in the RICE NESHAP when requirements for existing stationary CI engines were finalized on March 3, 2010 (75 FR 9648). Following the completion of that portion of the rule, the EPA received three main petitions for reconsideration. One petition was from CPower, Inc., EnergyConnect, Inc., EnerNOC, Inc., and Innoventive Power, LLC. (EnerNOC et al.)(EPA-HQ-OAR-2008-0708- 0404). Another petition was received from the Delaware Department of Natural Resources and Environmental Control (DE DNREC) (EPA-HQ-OAR-2008-0708-0400). The third petition was from the National Rural Electric Cooperative Association (NRECA) (OAR-2008-0708-0580). In addition to these main petitions the

EPA received a substantial number of letters from others in the electric generation industry. The petition from EnerNOC, et al., asked that EPA increase the period of time permitted for emergency demand response operation in the rule to 60 hours per year, or the minimumPage 26 of 197 number of hours required by the emergency demand response program. By contrast, the DE DNREC petition asked EPA to reconsider the emergency demand response provision because of

the adverse effects that it believes would result from increased emissions from these engines. The petition from NRECA requested that the EPA eliminate the restriction on the use of stationary emergency engines for demand response purposes. The EPA granted the petitions from EnerNOC, et al., DE DNREC and NRECA, and issued a notice on December 7, 2010 (75 FR 75937), requesting comments on whether to amend the 15 hours per year limitation on the operation of stationary emergency RICE participating in emergency demand response programs.

The EPA received more than 120 comments from a number of different entities including various state agencies, utilities, electric cooperatives and industry organizations. Many commenters expressed that 15 hours per year is not sufficient to meet current emergency demand response requirements for participation. For example, several emergency demand response programs have ISO tariff requirements greater than 15 hours per year, including the Electric Reliability Council of Texas emergency demand response program, which has a tariff requirement of 24 hours per year; the Pennsylvania Jersey Maryland (“PJM”) Interconnection, known as the Emergency Load Response Program, which has a tariff requirement of 60 hours perPage 27 of 197 year; and the ISO New England (“ISO-NE”), which forecasts that backup resources would be expected for 55 hours over a 12-month period. Tariff requirements are developed to specify the mandatory time load resources (engines) must be willing and able to operate if the units are enrolled in the program. Conversely, some commenters urged the EPA to allow stationary emergency engines to only operate during true emergencies or when voltage or frequency varies beyond specified parameters. Based on the EPA’s review of the petitions and comments that the EPA has received, the EPA has found it appropriate to propose to amend the current rule to increase the allowance for stationary emergency engine participation in emergency demand response programs to up to 100 hours per year, which would be included as part of the pre-existing allowance of 100 hours for owners of emergency engines to test and maintain their emergency engines. The EPA believes that the emergency demand response programs that exist across the country are important programs that protect the reliability and stability of the national electric service grid. Allowing stationary emergency engines to operate as part of emergency demand response programs can help prevent grid failure or blackouts, by allowing these engines to be used in circumstances of grid instability prior to the occurrence of blackouts. Preventing stationary emergency engines from being able to qualify and participate in emergency demandPage 28 of 197 response programs without having to apply aftertreatment could force owners and operators to leave their engines out of these programs, which will impair the ability of ISOs and RTOs to use these relatively small, quick-starting and reliable sources of energy to protect the reliability of their systems. The EPA does not wish to potentially jeopardize electrical reliability or create a disincentive for stationary emergency engines to participate in these programs. The circumstances during which the EPA would allow stationary emergency engines to operate for emergency demand response purposes include periods during which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency, plus during periods where there is a deviation of voltage or frequency of 5 percent or more below standard voltage or frequency. During EEA Level 2 alerts there is insufficient energy supply and a true potential for electrical blackouts. System operators must call on all available resources during EEA Level 2 alerts in order to stabilize the grid to prevent failure. Therefore, this situation is a good indicator of severe instability on the system. Consistent normal voltage provided by the utility is often called power quality and is an important factor in localPage 29 of 197 electric system reliability. Reliability of the system requires electricity being provided at a normal expected voltage. The

American National Standards Institute standard C84.1-1989 defines the maximum allowable voltage sag at below 5 percent. On the local distribution level local voltage levels are therefore important and a 5 percent or more change in the normal voltage or frequency is substantial and an indication that additional resources are needed to ensure local distribution system reliability. This situation would be indicative of severe instability on the system. Emergency demand response programs rely on agreements under which owners of engine agree to make their engines available to be called upon for a specific number of hours per year, as required by the relevant ISO or RTO tariff, under specified circumstances considered to indicate emergencies. In order to be enrolled in an emergency demand response program, participants must qualify their engines and must be able to use their emergency engines for the number of hours the program requires. Engines are not generally called upon for the maximum hours required by the tariffs. However, even though the engine may not be called at all or may run for fewer hours than the program requires it to be available in a particular year, the engine

must still be available for those theoretical number of hours in order to join the program. Demand response contracts requirePage 30 of 197 more hours than the 15 hours per year that is currently in the regulations, and the commenters state that the 15 hours per year is not a sufficient amount of time to ensure the reliability of the program; some programs require up to 60 hours per year, as discussed earlier in this preamble. For these reasons, the EPA believes it is appropriate to allow additional hours for emergency demand response operation in order for such programs to be accessible to stationary emergency engines. Consequently, the EPA is proposing amendments to the rule to increase the limitation on emergency demand response operation to 100 hours per year for stationary emergency engines. It is expected that owners and operators of stationary emergency engines that seek to qualify their units as demand resources would with the proposed increase to 100 hours per year be able to meet the operational and qualification requirements of the different ISOs and RTOs in the country. As stated, stationary emergency engines that participate in demand response programs may not be called upon at all, but must nonetheless be available to operate for the required amount stipulated by the specific program. The purpose of the limited allowance for emergency demand response is to respond to emergencies, and the EPA is persuaded by the information that has been submitted that 15 hours per year is an insufficient amount of time to allow for emergency demand response needs,Page 31 of 197 given past experience. The EPA believes 100 hours per year is sufficient to cover any potential demand response operation as well as the required maintenance and testing that is also included within the 100 hours of operation. The EPA has previously determined that stationary emergency engines typically operate well below 50 hours per year and more commonly about 1 to 2 hours per month. A survey conducted by the California Air Resources Board (CARB) indicated the average yearly operation for emergency diesel engines was 31 hours over a period of 3 years. The majority of those hours were for the purpose of maintenance and testing; less than 5 hours was for interruptible service contracts, and the remaining amount for emergency/standby operation (EPA-HQ-OAR-2005-0029-0011). Data from demand response programs in ISO-NE and PJM territories show that backup generation was dispatched for less than 30 hours during the summers of 2008, 2009 and 2010. 4 However, again, emergency units must be available to operate more than that in most cases to qualify for demand response programs. For instance, PJM requires a minimum ISO tariff of 60 hours per year of engine availability for program participation. Consequently, in order to ensure that a

4 Memorandum from Stacy Angel, Synapse Energy Economics, Inc. to Doug Hurley, Synapse Energy Economics. Sample Revenue for a 1 MW Backup Generation Unit. June 27, 2011.Page 32 of 197 sufficient amount of operating time is available for maintenance and readiness testing, and for demand response operation, the EPA is proposing 100 hours of operation. A number of commenters requested that an allowance of 100 hours per year be allowed in order to provide adequate hours consistent with minimum required hours that customers must be available to operate and to address local distribution system emergencies. For instance, in Hawaii, the emergency demand response program operated by the Hawaiian Electric Company requires that emergency engines be able to operate for 100 hours per year in the event of an emergency in order to participate in the program. In order to provide a

sufficient amount of time to cover annual maintenance and testing, which is typically more than 20 hours per year according to the survey conducted by CARB (see EPA-HQ-OAR-2005- 0029-0011), plus to cover hours necessary for qualifying for emergency demand response programs or local distribution system emergencies, EPA believes an allowance of 100 hours per year would be appropriate for these activities. Taking into account that there may be situations where annual maintenance and testing could exceed the typical 1 to 2 hours per month and accounting for other emergency demand response programs that require more than 60 hours per year for program participation (e.g., the Hawaiian Electric Company), the EPA believes that 100Page 33 of 197 hours per year is appropriate for emergency demand response plus maintenance and testing. The proposed amendment to the rule would mean that stationary emergency engines could operate for a total of 100 hours per year for emergency demand response operation as part of the 100 hours already permitted for maintenance and readiness testing while maintaining their status as emergency units, rather than non-emergency units, and continue to meet the requirements that apply to emergency engines. On the issue of peak shaving and non-emergency demand response, the EPA is proposing to include a temporary limited allowance for peak shaving and other types of non-emergency use as part of a financial arrangement for existing stationary emergency engines at area sources of HAP, if the peak shaving is done as part of a peak shaving (or load management) program with the local distribution system operator. The power generated under this allowance can only be used at the facility or towards the local system. The EPA has determined that it is appropriate to include the option for existing stationary emergency engines at area sources to operate for a small number (50) of hours per year for any non-emergency reason and not be penalized or considered a non-emergency engine and subsequently required to install aftertreatment that could be prohibitively costly for thesePage 34 of 197 sources in the near term. The EPA is proposing that the 50-hour allowance for peak shaving for emergency engines at area sources be allowed for a limited period of time, but then removed after April 16, 2017. The peak shaving would also be limited to operation as part of a peak shaving (load management program) with the local distribution system operator. Owners would stillhave the pre-existing 50 hours per year allowance for nonemergency operation after April 16, 2017, but those 50 hours could no longer be used for peak shaving. The temporary allowance for peak shaving would give sources an additional resource for maintaining reliability while facilities are coming into compliance with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units (77 FR 9304). While the EPA does not expect the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units to cause regional reliability problems, this limited allowance would allow the owners and operators of these engines more flexibility to run reliability critical units in order to minimize potential grid-related interruptions as coal- and oil-fired baseload power plants may be temporarily shut down to install emission controls to comply with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units. Including this allowance is important for small electric cooperatives and other entities located at area sources that use these engines to maintain voltage and electric reliability. ManyPage 35 of 197 rural electric cooperatives enter agreements with owners of small emergency engines and rely on the engines to reduce demand on the central power supply during periods of high demand, which reduces the cost of power during periods of high demand for the members of the cooperative. Commenters promoting the continued use of peak shaving programs said that maintaining the cost of power as low as possible is important across the country, but is particularly of significant importance to rural electric cooperatives that, according to the commenter, service customers in the most economically depressed areas of the country, where options are the most limited. The commenters argued that if small emergency engines would no longer be permitted to operate for peak shaving purposes without having to be reclassified as non-emergency engines and subsequently subject to costly emissions controls, owners could no longer afford to participate in such programs. Cooperatives argued that this would lead to increased costs that would ultimately be passed along to the customers. Commenters also maintained that keeping peak shaving programs would not lead to additional public health risks or emissions because the operation for peak shaving is minimal. If peak shaving is not allowed under the rule, commenters said that this would lead to an increase in central power station capacity and possibly more transmission and distribution line capacity to accommodate the increase in demand resulting from eliminatingPage 36 of 197 small emergency engines from being used. This could lead to a larger impact on the environment and public health than allowing a small number of hours for peak shaving purposes. Certain small and remote facilities also rely on financial programs to generate additional income in order to maintain their engines and stay in operation. The additional funds can be essential for many smaller facilities and operations. Providing a limited allowance for peak shaving and non-emergency demand response could generate sufficient income to prevent small facilities and owners from ceasing operation where these engines are in service. In order to further limit the operation of these engines to small, remote facilities, the EPA is proposing that the power generated under this allowance can only be used at the facility or towards the local system. In addition, while the EPA is proposing this allowance until the end of April 16, 2017, the EPA does not believe it is appropriate to continue the program beyond that time. Generators receive considerable compensation for their availability in peak shaving programs and the EPA believes that it is not appropriate to allow these engines to continue receiving compensation for this non-emergency use beyond 2017 without having to reduce their emissions. The generators must by that time decide whether to restrict their use to emergency or limited non-compensated non-emergency use or to reduce the emissions from their engines. The EPA alsoPage 37 of 197 encourages engine owners and operators, as well as larger system planners, to consider the use of alternative peak shaving options, such as load curtailments, lower emitting distributed generation, combined heat and power, and reduced line losses on the electricity grid. The previous estimate of emissions from stationary emergency engines is not expected to change due to this proposed limited allowance. To estimate emissions from stationary emergency engines, the EPA has previously estimated that emergency engines would on average operate for 50 hours per year. There is a wide range in how much these engines operate (some well below 50 hours per year), but on average and to be conservative, the EPA believes that 50 hours per year is still representative and consequently the environmental impact the EPA has calculated previously remains appropriate. In consideration of all these issues, the EPA is proposing amendments to the rule to provide a limited allowance for peak shaving for existing stationary emergency engines at area sources of HAP. The specific amendments the EPA is proposing are discussed below. 2. Proposed Amendments a. Emergency Demand Response. Based on the discussion in section II.B.1 of this preamble, the EPA is proposing to revise the current provisions for stationary engines used for emergency demand response operation. The provisions the EPA is proposingPage 38 of 197 to amend are in §§63.6640(f) and 63.6675 of 40 CFR part 63, subpart ZZZZ. Currently, §63.6640(f)(1)(iii) allows a maximum of 15 hours per year to be spent towards demand response operation under certain qualifying conditions. Also, §63.6640(f)(1)(ii) currently includes an allowance of 100 hours per year for purposes of maintenance checks and readiness testing. The EPA is proposing that owners and operators of stationary emergency RICE be permitted to operate their engines as part of an emergency demand response program within the 100 hours per year that is permitted for maintenance and testing in §63.6640(f)(1)(ii). Owners and operators of stationary emergency engines can operate for emergency demand response during periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an EEA Level 2 as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency and during periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. The hours spent for emergency demand response operation are added to the hours spent for maintenance and testing purposes and counted towards the 100 hours per year. If the total time spent for demand response operation and maintenance and testing exceeds 100 hours per year the engine will not be considered an emergency engine under this subpartPage 39 of 197 and will need to meet all requirements for non-emergency engines. The EPA is recognizing that these engines may be called to operate not only by the regional transmission operator or equivalent to maintain the reliability of the bulk power system, but also by the local transmission and distribution system operators to support the local power systems. For stationary emergency engines above 500 HP that were installed prior to June 12, 2006, there is currently no emergency demand response allowance and there is no time limit on the use of emergency engines for routine testing and maintenance in §63.6640(f)(2)(ii). Those engines were not the focus of the 2010 RICE NESHAP amendments; therefore, the EPA did not make any changes to the requirements for those engines as part of the 2010 amendments. For consistency, the EPA is now also proposing that owners and operators of stationary emergency engines installed prior to June 12, 2006, be permitted to operate their engines as part of a demand response program as well for a total of 100 hours per year, including time spent for maintenance and testing. The EPA is also proposing to amend the NSPS for stationary CI and SI engines in 40 CFR part 60, subparts IIII and JJJJ, respectively, to provide the same allowance for stationary emergency engines for emergency demand response operation as for engines subject to the RICE NESHAP. The NSPS regulationsPage 40 of 197 currently do not include such an allowance for emergency demand response operation. For the reasons discussed in section II.B of this preamble as to why the EPA finds it appropriate to allow stationary emergency engines to participate in emergency demand response programs and remain being considered emergency units, and for consistency across engine regulations, the EPA is proposing to add an emergency demand response allowance under the NSPS regulations. Consequently, the EPA is proposing to revise the existing language in §§60.4211(f) and 60.4219 of 40 CFR part 60, subpart IIII, and §§60.4243(d) and 60.4248 of 40 CFR part 60, subpart JJJJ, to specify that emergency engines may participate in demand response programs for up to 100 hours per year, including hours spent towards maintenance and testing of the emergency engines. b. Peak Shaving and other Non-emergency Use as Part of a Financial Arrangement. In addition to the changes the EPA is proposing related to emergency demand response operation, the EPA is also including a further provision for owners and operators of existing stationary emergency RICE located at area

sources for the reasons discussed in section II.B.1 of this preamble. Paragraph §63.6640(f) currently allows owners and operators of emergency stationary RICE to operate their engine for 50 hours per year in non-emergency situations. As currently written, the 50 hours per year for non-emergency situationsPage 41 of 197 cannot be used for peak shaving or to generate income for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity; except that owners and operators of certain emergency engines may operate the engine for a maximum of 15 hours per year as part of an emergency demand response program. As discussed, the 15 hours per year allowance for emergency engines to participate in emergency demand response programs is being increased to 100 hours per year, but will also include hours spent towards maintaining and conducting readiness testing of the emergency engines. However, additionally, the EPA is also proposing that stationary emergency engines located at area sources be permitted to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any non-emergency operation, including operation as part of a financial agreement with another entity. The peak shaving allowance would expire in 2017. The EPA is specifying that the power can only be used at the facility or towards the local system, and the engine can only be operated for peak shaving as part of a program with the local distribution system operator. The EPA is also clarifying that an engine that exceeds the calendar year limitations on non-emergency operation, including emergency demand response or peak shaving, will be considered aPage 42 of 197non-emergency engine and subject to the requirements for nonemergency engines for the remaining life of the engine. C. Non-Emergency Stationary SI RICE Greater than 500 HP Located

at Area Sources 1. Background The EPA is also proposing to amend the requirements that apply to existing stationary non-emergency 4 stroke SI RICE greater than 500 HP located at area sources of HAP emissions, which are generally natural gas fired engines. Currently, the RICE NESHAP requires owners and operators of such engines to 1) either meet a CO concentration limit of 47 parts ppmvd at 15 percent O 2 or reduce emissions of CO by 93 percent or more, if the engines are 4SLB; and 2) to meet a formaldehyde concentration limit of 2.7 ppmvd at 15 percent O 2 or reduce formaldehyde emissions by 76 percent or more, if the engines are 4SRB. In both cases, the EPA expects that the standards would be met using aftertreatment; oxidation catalysts for 4SLB engines and NSCR for 4SRB engines. In addition to these emission requirements, owners and operators of existing stationary 4- stroke engines greater than 500 HP at area sources are also subject to monitoring, testing, recordkeeping and reporting requirements. After the final requirements for existing stationary SI engines greater than 500 HP at area sources were published onPage 43 of 197 August 20, 2010 (75 FR 51570), the EPA received petitions from Exterran (EPA-HQ-OAR-2008-0708-0581), the American Petroleum Institute (EPA-HQ-OAR-2008-0708-0582), the Interstate Natural Gas Association of America (EPA-HQ-OAR-2008-0708-0584), and the Gas Processors Association (EPA-HQ-OAR-2008-0708-0587) requesting that the EPA reconsider the requirements of the final rule. The petitioners expressed many similar concerns. As relevant to this rulemaking, petitioners stated that the EPA did not take into account the difference in population density and subsequently did not consider the difference in health impacts in remote versus more heavily populated locations. In the petitioners’ opinion, there should be less concern about engines that are located farther away from people; the petitioners believed that the EPA has substantial latitude in requiring less stringent standards for owners and operators of stationary engines in remote areas.

While the EPA does not share all of the views of the petitioners regarding the difference between engines based on their location, the EPA does believe that it is reasonable to create a subcategory of existing stationary SI 4SLB and 4SRB engines above 500 HP located in areas remote from human activity. Engines located in remote areas that are not close to significant human activity may be difficult to access, may not have electricity or communications, and may be unmanned most ofPage 44 of 197 the time. The costs of the emission controls, testing, and continuous monitoring requirements may be unreasonable when compared to the HAP emission reductions that would be achieved, considering that the engines are in sparsely populated areas. The EPA believes that establishing a subcategory for SI engines at area sources of HAP located in sparsely populated areas accomplishes the agency’s goals and is adequate in protecting public health. The EPA is proposing to subcategorize sparsely populated engines using the existing DOT classification system for natural gas pipelines. This system classifies locations based on their distance to natural gas pipelines covered by the Pipeline and Hazardous Materials Safety Administration safety regulations. The DOT system defines a class location unit as an onshore area that extends 220 yards or 200 meters on either side of the centerline of any continuous 1-mile (1.6 kilometers) length of natural gas pipeline. The DOT approach further classifies pipeline locations into Class 1 through Class 4 locations based on the number of buildings intended for human occupancy. A Class 1 location is defined as an offshore area or any class location unit that has 10 or fewer buildings intended for human occupancy. Stakeholders from the oil and gas industry have indicated to the EPA that the DOT system is well-established and there would be substantial overlap between engines on naturalPage 45 of 197 gas pipelines affected by the rule and covered by the DOT pipeline classification system. Incorporating this approach

would also create harmonization between the EPA and DOT and would reduce the implementation and enforcement burden for states. Implementation for affected sources would also be less burdensome because the system is already in place and used by the natural gas pipeline industry and covers the majority of these engines. Stakeholders have indicated they are required to review the class location status of natural gas pipeline segments annually. The EPA believes this approach is reasonable for defining the subcategory of remote engines for those engines that are associated with natural gas pipelines. For engines along hazardous liquid pipelines and those engines not associated with pipelines, the EPA is using similar criteria. An engine would be considered to be in sparsely populated areas if within 0.25 mile radius of the engine there are 5 or fewer buildings intended for human occupancy. The EPA is proposing management practices as generally available control technologies for existing stationary SI 4SLB and 4SRB area source non-emergency engines located in sparsely populated areas. Given the remote location of the engines from human activity, the EPA believes that it is appropriate not to include requirements that would necessitate aftertreatment and extensive testing and monitoring. The EPA has previously Deleted: both Deleted: and Deleted: Deleted: . ForPage 46 of 197 estimated that the costs of oxidation catalyst for existing 4SLB and 4SRB engines above 500 HP at area sources are $310 and $150 million, for capital and annual costs, respectively. The capital and annual costs of the RICE NESHAP for existing 4SLB and 4SRB engines above 500 HP at area sources would be $30 million and $12 million, respectively, if these proposed amendments are incorporated into the rule. Creating a subcategory of these engines for the ones located in sparsely populated areas and not mandating emission controls would significantly reduce the cost of the rule for such engines.For existing stationary SI 4SLB and 4SRB area source nonemergency engines that are located in populated areas, the EPA is proposing an equipment standard that requires the installation and operation of a catalyst that will have to be tested initially and annually to ensure that the catalyst is working properly and reducing emissions as required. In addition, these units will be required to have devices to shut down the engine if the catalyst is exposed to dangerous temperatures or have continuous monitoring equipment installed to record catalyst inlet temperatures. The EPA is proposing shorter test duration and less rigorous methods than currently required while still ensuring that HAP reductions remain at expected levels for these engines located in populated areas.Page 47 of 197 The specific amendments the EPA is proposing are discussed

below. 2. Proposed Amendments Owners and operators of engines in sparsely populated areas would have to conduct a review of the surrounding area every 12 months to determine if the nearby population has changed. If the engine no longer meets the criteria for a sparsely populated area the owner and operator must within 1 year comply with the emission standards specified below for populated areas. Owners and operators of existing stationary 4SLB and 4SRB greater than 500 HP at area sources that are in sparsely populated areas as described above would be required to perform the following:

 Change oil and filter every 1,440 hours of operation or annually, whichever comes first;

 Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary;

and

 Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as

necessary. Sources have the option to use an oil analysis program as described in §63.6625(i) of the rule in order to extend the specified oil change requirement. The oil analysis must bePage 48 of 197 performed at the same frequency specified for changing the oil in Table 2d of the rule. The analysis program must at a minimum analyze the following three parameters: Total Acid Number, viscosity, and percent water content. The condemning limits for these parameters are as follows: Total Acid Number increases by more than 3.0 milligrams of potassium hydroxide per gram from Total Acid Number of the oil when new; viscosity of the oil has changed by more than 20 percent from the viscosity of the oil when new; or percent water content (by volume) is greater than 0.5. If all of these condemning limits are not exceeded, the engine owner or operator is not required to change the oil. If any of the limits are exceeded, the engine owner or operator must change the oil within 2 days of receiving the results of the analysis; if the engine is not in operation when the results of the analysis are received, the engine owner or operator must change the oil within 2 days or before commencing operation, whichever is later. The owner or operator must keep records of the parameters that are analyzed as part of the program, the results of the analysis, and the oil changes for the engine. The analysis program must be part of the maintenance plan for the engine. Owners and operators of existing stationary 4SLB and 4SRB area source engines above 500 HP in sparsely populated areas would also have to operate and maintain the stationary RICE andPage 49 of 197 aftertreatment control device (if any) according to the manufacturer's emission-related written instructions or develop their own maintenance plan which must provide to the extent practicable for the maintenance and operation of the engine in a manner consistent with good air pollution control practice for minimizing emissions. For engines in populated areas, i.e., existing stationary 4SLB and 4SRB non-emergency engines greater than 500 HP at area sources that are located on DOT Class 2 through Class 4 pipeline segments or, for engines not associated with pipelines, that do not meet the 0.25 mile radius with 5 or less buildings criteria, the EPA is proposing to adopt an equipment standard requiring the installation of a catalyst to reduce HAP emissions. Owners and operators of existing area source 4SLB non-emergency engines greater than 500 HP in populated areas would be required to install an oxidation catalyst. Owners and operators of existing area source 4SRB non-emergency engines greater than 500 HP in populated areas would be required to install NSCR. Owners and operators must conduct an initial test to demonstrate that the engine achieves at least a 93 percent reduction in CO emissions or a CO concentration level of 47 ppmvd at 15 percent O 2 , if the engine is a 4SLB engine. Similarly, owners and operators must conduct an initial performance test to demonstrate that the engine achieves at least a 75 percent CO reduction or a 30Page 50 of 197 percent THC reduction, if the engine is a 4SRB engine. The

initial test must consist of three test runs. Each test run must be of at least 15 minute duration, except that each test run conducted using the proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the method and include at least 2 minutes of test data phase measurement. To measure CO, emission sources must use the CO methods already specified in subpart ZZZZ, or the proposed appendix A to 40 CFR part 63, subpart ZZZZ. The THC testing must be conducted using EPA Method 25A. The owner or operator of both engine types must also use a high temperature shutdown device that detects if the catalyst inlet temperature is too high, or, alternatively, the owner or operator can monitor the catalyst inlet temperature continuously and maintain the temperature within the range specified in the rule. For 4SLB engines the catalyst inlet temperature must remain at or above 450°F and at or below 1,350°F. For 4SRB engines the temperature range must be greater than or equal to 750°F and less than or equal to 1,250°F at the catalyst inlet. Owners and operators must in addition to the initial performance test conduct annual checks of the catalyst to ensure proper catalyst activity. The annual check of the catalyst must at a minimum consist of one 15-minute run using the methods discussed above, except that each test run conducted using thePage 51 of 197 proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the method and include at least 2 minutes of test data phase measurement. Owners and operators of 4SLB engines must demonstrate during the catalyst activity test that the catalyst achieves at least a 93 percent reduction in CO emissions or that the engine exhaust CO emissions are no more than 47 ppmvd at 15 percent O 2 . Owners and operators of 4SRB engines must demonstrate that their catalyst is reducing CO emissions by 75 percent or more, or alternatively, that THC emissions are being reduced by at least 30 percent during the catalyst activity check. If the emissions from the engine do not exceed the levels required for the initial test or annual checks of the catalyst, then the catalyst is considered to be working properly. If the emissions exceed the specified pollutant levels in the rule, the exceedance(s) is/are not considered a violation, but the owner or operator would be required to shut down the engine and take appropriate corrective action (e.g., repairs, clean or replace the catalyst, as appropriate). A follow-up test must be conducted within 7 days of the engine being started up again to demonstrate that the emission levels are being met. If the retest shows that the emissions continue to exceed the specified levels, the stationary RICE must again be shut down as soon as safely possible, and the engine may not operate, except forPage 52 of 197 purposes of start-up and testing, until the owner/operator demonstrates through testing that the emissions do not exceed the levels specified. D. Stationary Agricultural RICE in San Joaquin Valley In the 2010 amendments to the RICE NESHAP, the EPA required existing non-emergency CI engines above 300 HP to meet a standard of either 70 percent reduction of CO emissions or 49 ppmvd CO, for engines between 300 and 500 HP, or 23 ppmvd CO for engines above 500 HP. The requirements also included testing and monitoring provisions. As with all requirements for existing engines in that rule, owners and operators were required to meet the requirements within 3 years of the effective date of the regulations (May 3, 2013). Since the finalization of the rule for existing stationary CI engines, stakeholders from the agricultural industry in the San Joaquin Valley area of California have expressed concern regarding the effect of certain of these requirements on engines in the San Joaquin Valley. The San Joaquin Valley Air Pollution Control District (APCD) has indicated that there are 17 stationary CI engines at area sources in San Joaquin Valley certified to the Tier 3 standards in 40 CFR part 89 that were installed between January 1 and June 12, 2006. Under the NESHAP, stationary CI engines at area sources are existing if construction of the engine commenced prior to June 12, 2006.Page 53 of 197 These 17 Tier 3 engines in the San Joaquin Valley, which were built to meet stringent emission standards, would not be able to comply with the applicable RICE NESHAP emission standards for existing engines without further testing and monitoring, and possible retrofit with further controls, due to differences in the emission standards and testing protocols in the RICE NESHAP versus the Tier 3 standards in 40 CFR part 89. However, an identical engine certified to the Tier 3 standards (or Tier 2 standards for engines above 560 kilowatts (kW)) in 40 CFR part 89 that was installed after June 12, 2006, would not have to be retrofit in order to comply with the NESHAP. Stationary CI engines installed after June 12, 2006, at area sources of HAP are required to comply with the NSPS for stationary CI engines, which requires engines to be certified to the standards in 40 CFR parts 89, 94, 1039, and 1042, as applicable. Thus, a 2006 model year stationary CI engine installed after June 12, 2006, that is certified to the applicable standards would meet the requirements of the NESHAP without further controls or testing. While the EPA does not know if other certified Tier 3 engines besides these 17 engines in the San Joaquin Valley were installed prior to June 12, 2006, EPA believes the same rationale should apply to any such engine. The EPA believes that the Tier 3 standards (Tier 2 for engines above 560 kW) are technologically stringent regulationsPage 54 of 197 and believes it is unnecessary to require further regulation of engines meeting these standards. Engines meeting the Tier 3 standards typically employed emission control technologies such as combustion optimization and better fuel control to meet the Tier 3 standards. In order to address the concerns raised by the engine owners in the San Joaquin Valley, the EPA is proposing changes to amend the requirements for any certified Tier 3 (Tier 2 for engines above 560 kW) stationary CI engine located at an area source and installed before June 12, 2006. The EPA is proposing amendments to specify that any existing certified Tier 3 (Tier 2 for engines above 560 kW) CI engine that was installed before June 12, 2006, is in compliance with the NESHAP. This amendment would include any existing stationary Tier 3 (Tier 2 for engines above 560 kW) certified CI engine located at an area

source of HAP emissions. Another concern brought to the EPA’s attention by the San Joaquin Valley agricultural industry is that due to state and local requirements in the San Joaquin Valley, many of the Tier 1 and Tier 2 stationary CI engines that are regulated as existing sources under the NESHAP must be replaced in the next few years, only a short time after the emission standards for existing engines must be met. Specifically, the San Joaquin Valley APCD rule for internal combustion engines (Rule 4702) requires Tier 1 and Tier 2 certified engines to meet Tier 4 standards by JanuaryPage 55 of 197 1, 2015, or 12 years after the installation date, but no later than June 1, 2018. The concern is that owners and operators of these engines would have to install aftertreatment by 2013 to meet the emission standards of the RICE NESHAP and then only a few years later be required to replace their engines per San Joaquin Valley APCD Rule 4702. The San Joaquin Valley APCD has identified 49 Tier 1 engines and 360 Tier 2 engines that are scheduled to be replaced under the local rule. The EPA has not identified any engines outside the San Joaquin Valley APCD area that are in the same or similar situation (i.e., required to be replaced shortly after the compliance date for existing engines), but the EPA does not preclude the possibility that there are such engines in other areas, and requests comment and information on other areas that may have similar concerns. The EPA does not think it is appropriate to require emission controls on a stationary CI engine that is going to be retired only a short time after the rule goes into effect. Stationary CI engines would have to comply with this rule by May 3, 2013, and owners of engines above 300 HP are expected to have to install aftertreatment on their engines in order to meet the

emission standards. The EPA estimates that the one-time cost to equip a 500 HP stationary CI engine with the controls necessary

to meet the emission standards under this rule is close to $14,000 and more than $3,000 on a yearly basis, not accountingPage 56 of 197 for additional costs associated with monitoring, testing, recordkeeping and reporting. These engines (equipped with aftertreatment) could end up being in operation for less than 2 years or at most only 5 years before having to be replaced with a certified Tier 4 engine, as required by San Joaquin Valley District Rule 4702. It would not be reasonable to require the engine owner to invest in costly controls and monitoring equipment for an engine that will be replaced shortly after the

installation of the controls. Consequently, the EPA is proposing amendments to existing stationary CI engines located at area sources of HAP emissions to address this concern. The EPA is proposing to amend the requirements for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are greater than 300 HP that are subject to a state or local rule that requires the engine to be replaced. The EPA is proposing to allow these engines to meet management practices for a period of 2 years starting with the applicable May 3, 2013, compliance date. The EPA believes a period of 2 years is appropriate and provides owners enough time to replace their engines without mandating a possibly cost prohibitive requirement to change all of the engines in a short amount of time, while still requiring that replacement of the engine or a retrofit of the engine occur relatively quickly after the owner would have to comply with thePage 57 of 197 NESHAP. The EPA is proposing that these engines be subject to management practices until May 3, 2015, after which time the CO emission standards discussed above (and that are in Table 2d of the rule) apply. The management practices include requirements for when to inspect and replace the engine oil and filter, air cleaner, hoses and belts. The complete details of which management practices are required are shown in Table 2d of the rule. Owners and operators of these existing stationary CI engines located at area sources of HAP emissions that intend to meet management practices rather than the emission limits prior to May 3, 2015, must submit a notification by March 3, 2013, stating that they intend to use this provision and identifying the state or local regulation that the engine is subject to.

E. Remote Areas of Alaska 1. Background The RICE NESHAP currently specifies less stringent requirements for existing non-emergency CI engines at area

sources located in remote areas of Alaska. Remote areas are defined as those not accessible by the FAHS. The FAHS includes areas with year-round ferry service that are not on the contiguous road system. Under the current regulation, stationary non-emergency CI engines at area sources in areas of Alaska that are not accessible by the FAHS are subject to management practices as opposed to numerical emission standards.Page 58 of 197 Following the publication of the final rule in 2010, the EPA received requests to expand the definition of remote areas

of Alaska. Stakeholders asserted that facilities in areas that are accessible by the FAHS but are not connected to the Alaska Railbelt grid face the same challenges as those in areas not accessible by the FAHS. The Alaska Railbelt Grid refers to the service areas of the six regulated public utilities that extend from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are the Golden Valley Electric Association, Chugach Electric Association, Matanuska Electric Association, Homer Electric Association, Anchorage Municipal Light & Power, and the City of Seward Electric System. According to the stakeholders, one reason for broadening the definition of remote areas in Alaska is high energy costs, which provide a natural incentive to run CI engines as little as possible. The cost of energy is utilities’ greatest concern in Alaska. Also, the stakeholders

indicated that extreme weather conditions in certain areas of Alaska is another reason for including additional areas in the

definition of remote areas of Alaska. The climate issue is unique to remote areas of Alaska that experience some of the most extreme temperatures in the country. Heavy snowfall and high winds are not uncommon in several areas that are accessible by the FAHS. For instance, Copper Valley Electric Association (CVEA) is a utility accessible by the FAHS, but it includesPage 59 of 197 areas that face the same challenges as other communities not accessible by the FAHS. The utility operates on an isolated grid and relies on diesel power generation. In one of CVEA’s territories, Valdez, Alaska, CVEA indicated that this area experiences brutal conditions and stated that Valdez is considered to have the greatest snowfall (326 inches per winter) in any city of the United States. Also, winds at more than 100 miles per hour are not uncommon for Valdez, Alaska, according to CVEA. Temperatures between 40 and 50 below zero are also not abnormal, which emphasizes the extreme reliance on power, CVEA asserted. Travel times and accessibility are issues on a regular basis, but can be additionally exacerbated due to severe weather, which in some cases may lead to avalanches and road closings. In particular, even if a site is on the FAHS, in the event of poor weather conditions and road closings, there are in many cases no alternate roads to travel on. Further, access to specific isolated sites can also be problematic in particular remote areas of Alaska and the problems are unique to Alaska because of the infrastructure and environment. For example, communities made the case that sources along the AMHS that are only accessible by the AMHS should be treated the same way as communities not accessible by the FAHS. The AMHS primarily serves passengers and vehicles, and is not intended for transporting goods. Therefore, the same methods used to bring inPage 60 of 197 goods to communities not on the FAHS are the same as those Alaskan villages served only by the AMHS. Goods are typically brought in to remote communities by barge and this is another example of a scenario that is unique to Alaska. Other arguments for expanding the definition of remote areas of Alaska beyond those not accessible by the FAHS include very low population density in many other remote areas although accessible by the FAHS, and the fact that many of these areas are not connected to the electric grid and rely on back up diesel generation to support fluctuating renewable energy systems. The energy supply system is another area that is particularly different in Alaska compared to the rest of the country where the majority of customers are connected to the grid. Therefore, for the reasons discussed, the EPA is proposing expansion of the remote area source category. This proposal is supported by the Alaska Department of Environmental Conservation and communities with

whom the EPA has discussed this issue. 2. Proposed Amendments The EPA is proposing to expand the current definition of remote areas of Alaska to extend beyond areas that are not accessible by the FAHS. Specifically, the EPA is proposing that areas of Alaska that are accessible by the FAHS and that meet all of the following criteria are also considered remote and subject to management practices under the rule:Page 61 of 197

 The stationary CI engine is located in an area not connected to the Alaska Railbelt Grid,

 At least 10 percent of the power generated by the engine per year is used for residential purposes, and

 The system capacity is less than 12 megawatts, or the engine is used exclusively for backup power for renewable energy and is used less than 500 hours per year on a 10- year rolling average. The EPA is proposing limiting the remote classification to engines that are used at least partially for residential purposes, where the impact of higher energy costs is of greatest

concern. The classification is further limited to sources that are used infrequently as backup for renewable power, or that are at smaller capacity facilities, which are generally in more sparsely populated areas.

F. Miscellaneous Corrections and Revisions The EPA is making some minor corrections to the stationary engine rules to address miscellaneous issues. The EPA is making

some minor revisions in the rules to correct mistakes in the current rules or to clarify the rules. The revisions are as

follows:

 Revising Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ to correct language requiring the pressure drop to be at plus or minus 10 percent 100 percent load for all engines.Page 62 of 197 The engines that were regulated in 2010 are not subject to the load requirements and therefore the EPA is correcting

these tables to make this clear.

 Adding a footnote to Table 1b of 40 CFR part 63, subpart ZZZZ stating that sources can petition the Administrator for a different temperature range consistent with Table 2b

of the rule.

 Correcting rows 8 and 10 in Table 2d of 40 CFR part 63, subpart ZZZZ to indicate that the requirements apply to non-emergency, non-black start stationary RICE greater than 500 HP that are 4SLB and 4SRB that operate more than 24 hours per year, as intended in the original rule.

 Revising the language in §63.6625(b) of 40 CFR part 63, subpart ZZZZ that states “...in paragraphs (b)(1) through (5) of this section” to “in paragraphs (b)(1) through (6)

of this section.”

 Changing Tables 2c and 2d of 40 CFR part 63, subpart ZZZZ, where it currently specifies to inspect air cleaner, to also specify that it must be replaced as necessary.

 Revising §63.6620(b) of 40 CFR part 63, subpart ZZZZ to indicate that testing must be conducted within plus or minus 10 percent of 100 percent load for stationary RICE greater than 500 HP located at a major source (exceptPage 63 of 197 existing non-emergency CI stationary RICE greater than 500 HP located at a major source) that are subject to testing.

 Specifying that, as was intended in the rule adding these requirements, the operating limitations (pressure drop and catalyst inlet temperature) in Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ do not have to be met during startup.

 For consistency, and as provided in the original RICE NESHAP for other stationary RICE, clarifying in 40 CFR part 63, subpart ZZZZ that the existing stationary RICE regulated in 2010 (i.e., engines constructed before June 12, 2006 that are less than or equal to 500 HP located at major sources or engines located at area sources) must burn landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis in order to qualify as a landfill or digester gas engine under the

rule.

 Clarifying §60.4207(b) of 40 CFR part 60, subpart IIII to specify that owners and operators of stationary CI engines less than 30 liters per cylinder that are subject to the subpart that use diesel fuel must use diesel fuel that meets the requirements of 40 CFR 80.510(b), except owners and operators may use up any diesel fuel acquired prior to October 1, 2010, that does not meet the requirements of 40 CFR 80.510(b) for nonroad diesel fuel.Page 64 of 197

 Adding appendix A to 40 CFR part 63, subpart ZZZZ, which includes procedures that can be used for measuring CO emissions from existing stationary 4SLB and 4SRB stationary

RICE above 500 HP located at area sources of HAP that are complying with the emission limits in Table 2d of 40 CFR part 63, subpart ZZZZ.

 Reinstating the footnotes for Table 2 of 40 CFR part 60, subpart JJJJ. The footnotes were inadvertently removed when the rule was amended on June 28, 2011 (76 FR 37954).

 Adding “part 60” in Table 4 of the NESHAP, in row 2 where it refers to 40 CFR appendix A.

 Clarifying in §63.6625(a) of 40 CFR part 63, subpart ZZZZ that a continuous emission monitoring system is only required to be installed at the outlet of the control device for engines that are complying with the requirement

to limit the concentration of CO.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(b) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that use gasoline.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICEPage 65 of 197 in §60.4231(c) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that are rich burn engines that use LPG.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(d) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that are not gasoline engines or rich burn engines that use LPG. G. Compliance Date The EPA has received questions regarding whether the compliance dates for engines impacted by the 2010 amendments and this proposed reconsideration will be extended. Affected sources that may be impacted by this action have expressed concern about having sufficient time to comply with the rule by the compliance date, which is May 3, 2013, for existing stationary CI RICE and October 19, 2013, for existing stationary SI RICE. Sources impacted by this reconsideration are particularly concerned with compliance in the event that the EPA does not finalize changes that are substantially similar to the changes being proposed in this action. The EPA does not intend to extend the May 3, 2013, and October 19, 2013, compliance dates, because there are many engines that must meet those compliance dates that are not impacted by this reconsideration. However, the EPA notes that sources that are affected by the reconsideration and that may need additional time to install controls to comply with thePage 66 of 197 applicable requirements can request up to an additional year to install controls, as specified in 40 CFR 63.6(i). **III. Summary of Environmental, Energy and Economic Impacts**

A. What are the air quality impacts? The EPA estimates that the rule with the proposed amendments incorporated will reduce emissions from existing stationary RICE as shown in Table 1 of this preamble. The emissions reductions the EPA previously estimated for the 2010 amendments to the RICE NESHAP are shown for comparison. Reductions are shown for the year 2013, which is the first year the final RICE NESHAP will be implemented for existing stationary RICE. **Table 1. Summary of Reductions for Existing Stationary RICE**

**Pollutant Emission Reductions (tpy)**  **in the year 2013**

**2010 Final Rule 2010 Final Rule with**  **these Proposed Amendments**  **CI SI C**  **I S**  **I HAP**  1,014 6,008 1,005 1,778 **CO** 14,342 109,321 14,238 22,211 **PM** 2,844 N/A 2,818 N/A **NO x**  N/A 96,479 N/A 9,648 **VOC** 27,395 30,907 27,142 9,147

The EPA estimates that more than 900,000 stationary CI engines will be subject to the rule in total, but only a small number of stationary CI engines are affected by the proposed amendments in this action. It is estimated that approximatelyPage 67 of 197 330,000 stationary SI engines will be subject to the rule in total; however, only a subset of stationary SI engines are affected by the proposed amendments in this action. The decrease in estimated reductions for SI engines is primarily due to proposed amendments to the requirements for existing 4SRB and 4SLB SI engines larger than 500 HP at area sources of HAP that are in remote areas. Those engines were required by the 2010 rule to meet emission limits that were expected to require the installation of aftertreatment to reduce emissions; under these proposed amendments, those engines are required to meet management practices that would not require the installation of aftertreatment. Further information regarding the estimated

reductions of this final rule can be found in the memorandum titled, “RICE NESHAP Reconsideration Amendments - Cost andEnvironmental Impacts,” which is available in the docket (EPAHQ-OAR-2008-0708). The EPA did not estimate any reductions associated with the minor changes to the NSPS for stationary CI and SI engines. B. What are the cost impacts? The proposed amendments are expected to reduce the overall cost of the original 2010 RICE NESHAP amendments. The EPA estimates that with these proposed amendments incorporated the cost of the rule for existing stationary RICE will be as shown in Table 2 of this preamble. The costs the EPA previouslyPage 68 of 197 estimated for the 2010 amendments to the RICE NESHAP are shown for comparison. **Table 2. Summary of Cost Impacts for Existing Stationary RICE**

**Engine 2010 Final Rule**  **2010 Final Rule with these Proposed Amendments**  **Total Annual Cost SI**  $253 million ($2009) $115 million ($2010) **CI** $373 million ($2008) $373 million ($2010) **Total Capital Cost SI**  $383 million ($2009) $103 million ($2010) **CI** $744 million ($2008) $740 million ($2010) Further information regarding the estimated cost impacts of the proposed amendments, including the cost of the proposed amendments in 2010 dollars, can be found in the memorandum titled, “RICE NESHAP Reconsideration Amendments - Cost andEnvironmental Impacts,” which is available in the docket (EPAHQ-OAR-2008-0708). The EPA did not estimate costs associated with the changes to the NSPS for stationary CI and SI engines. The changes to the NSPS are minor and are not expected to impact

the costs of those rules.

C. What are the benefits? Emission controls installed to meet the requirements of these rules will generate benefits by reducing emissions of HAP as well as criteria pollutants and their precursors, including CO, NOx and VOC. NOx and VOC are precursors to PM 2.5 (particles smaller than 2.5 microns) and ozone. The criteria pollutant

benefits are considered co-benefits for these rules. For thesePage 69 of 197 rules, we were only able to quantify the health co-benefits associated with reduced exposure to PM 2.5 from emission reductions of NOx and directly emitted PM 2.5 . The EPA previously estimated that the monetized co-benefits in 2013 of the stationary CI NESHAP would be $940 million to $2,300 million (2008 dollars) at a 3-percent discount rate and $850 million to $2,100 million (2008 dollars) at a 7-percent

discount rate. 5 For stationary SI engines, EPA previously estimated that the monetized co-benefits in 2013 would be $510 million to $1,200 million (2009 dollars) at a 3-percent discount rate) and $460 million to $1,100 million (2009 dollars) at a 7- percent discount rate. 6 The proposed amendments are expected to reduce the overall emission reductions of the rules. In addition to revising the anticipated emission reductions, we have also updated the methodology used to calculate the co-benefits to be consistent with methods used in more recent rulemakings, which is summarized below and discussed in more detail in the Regulatory

5 U.S. Environmental Protection Agency. 2010. Regulatory Impact Analysis (RIA) for Existing Stationary Compression Ignition Engines NESHAP: Final Draft . Research Triangle Park, NC. February. http://www.epa.gov/ttn/ecas/regdata/RIAs/CIRICENESHAPRIA2-17- 0cleanpublication.pdf. 6 U.S. Environmental Protection Agency. 2010. Regulatory Impact Analysis (RIA) for Existing Stationary Spark Ignition (SI) RICE NESHAP: Final Report . Research Triangle Park, NC. August. http://www.epa.gov/ttn/ecas/regdata/RIAs/riceriafinal.pdf.Page 70 of 197 Impact Analysis (RIA). We estimate the monetized co-benefits of the proposed amendments of the CI NESHAP in 2013 to be $770 million to $1,900 million (2010 dollars) at a 3-percent discount rate and $690 million to $1,700 million (2010 dollars) at a 7- percent discount rate. For SI engines, we estimate the monetized co-benefits of the proposed amendments in 2013 to be $62 million to $150 million (2010 dollars) at a 3-percent discount rate and $55 million to $140 million (2010 dollars) at a 7-percent

discount rate. Using alternate relationships between PM 2.5 and premature mortality supplied by experts, higher and lower co-benefits estimates are plausible, but most of the expert-based estimates

fall between these two estimates. 7 A summary of the monetized cobenefits estimates for CI and SI engines at discount rates of 3 percent and 7 percent is in Table 3 of this preamble.

7 Roman, et al. , 2008. Expert Judgment Assessment of the Mortality Impact of Changes in Ambient Fine Particulate Matter in the U.S. , Environ. Sci. Technol., 42, 7, 2268 – 2274.Page 71 of 197 Table 3. Summary of the Monetized PM 2.5 Co-Benefits for Proposed Amendments to the NESHAP for Stationary CI and SI Engines (millions of 2010 dollars) a

Pollutant Emission reductions

(tons per

year) Total monetized co-benefits

(3 percent Discount) Total monetized co-benefits

(7 percent Discount) Stationary CI Engines Directly emitted PM 2.5 2,818 $770 to $1,900 $690 to $1,700 Stationary SI Engines NOx 9,648 $62 to $150 $55 to $140

a All estimates are for the analysis year (2013) and are rounded to two significant figures so numbers may not sum across rows. The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . It is important to note that the monetized co-benefits do not include reduced health effects from exposure to HAP, direct exposure to NO 2 , exposure to ozone, ecosystem effects or visibility impairment. b PM co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. These co-benefits estimates represent the total monetized human health benefits for populations exposed to less PM 2.5 in 2013 from controls installed to reduce air pollutants in order

to meet these rules. To estimate human health co-benefits of these rules, the EPA used benefit-per-ton factors to quantify the changes in PM 2.5 -related health impacts and monetized benefits based on changes in directly emitted PM 2.5 and NOx emissions. These benefit-per-ton factors were derived using the general approach and methodology laid out in Fann, Fulcher, andPage 72 of 197 Hubbell (2009). 8 This approach uses a model to convert emissions

of PM 2.5 precursors into changes in ambient PM 2.5 levels and another model to estimate the changes in human health associated with that change in air quality, which are then divided by the emission reductions to create the benefit-per-ton estimates. However, for these rules, we utilized source apportionment air quality modeling of emissions in the “Non-EGU Point other” category because we do not have modeling specifically for stationary engines. 9 We apply these national benefit-per-ton estimates calculated for this sector separately for directly

emitted PM 2.5 and NOx and multiply them by the corresponding emission reductions. The sector-specific modeling does not provide estimates of the PM 2.5 -related benefits associated with reducing VOC emissions, but these unquantified benefits are generally small compared to other PM 2.5 precursors. More information regarding the derivation of the benefit-per-ton estimates for this category is available in the technical support document, which is available in the docket.

8 Fann, N., C.M. Fulcher, B.J. Hubbell. 2009. The influence of location, source, and emission type in estimates of the human health benefits of reducing a ton of air pollution . Air Qual Atmos Health (2009) 2:169–176. 9 U.S. Environmental Protection Agency. 2012. Technical support document: Estimating the benefit per ton of reducing PM 2.5 precursors from other point sources

. Research Triangle Park, NC.Page 73 of 197 These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. The main PM 2.5 precursors affected by these rules are directly emitted PM 2.5 and NO X . Even though we assume that allfine particles have equivalent health effects, the benefit-perton estimates vary between precursors depending on the location and magnitude of their impact on PM 2.5 levels, which drive population exposure. For example, directly emitted PM 2.5 has a lower benefit-per-ton estimate than direct PM 2.5 because it does

not form as much PM 2.5 ; thus, the exposure would be lower, and

the monetized health benefits would be lower. It is important to note that the magnitude of the PM 2.5 cobenefits is largely driven by the concentration response function for premature mortality. Experts have advised the EPA to consider a variety of assumptions, including estimates based both on empirical (epidemiological) studies and judgments elicited from scientific experts, to characterize the uncertainty in the relationship between PM 2.5 concentrations and premature mortality. We cite two key empirical studies, onePage 74 of 197 based on the American Cancer Society cohort study 10 and the extended Six Cities cohort study. 11 In the RIA for this proposed amendments rule, which is available in the docket, we also include benefits estimates derived from the expert judgments and other assumptions.

The EPA strives to use the best available science to support our benefits analyses. We recognize that interpretation of the science regarding air pollution and health is dynamic and evolving. After reviewing the scientific literature, we have determined that the no-threshold model is the most appropriate model for assessing the mortality benefits associated with reducing PM 2.5 exposure. Consistent with this finding, we have conformed the previous threshold sensitivity analysis to the current state of the PM science by incorporating a new “Lowest Measured Level” (LML) assessment in the RIA accompanying these rules. While an LML assessment provides some insight into the level of uncertainty in the estimated PM mortality benefits, the

EPA does not view the LML as a threshold and continues to quantify PM-related mortality impacts using a full range of modeled air quality concentrations.

10 Pope, et al. , 2002. Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine Particulate Air Pollution

. Journal of the American Medical Association 287:1132-1141. 11 Laden, et al. , 2006. Reduction in Fine Particulate Air Pollution and Mortality . American Journal of Respiratory and Critical Care Medicine 173: 667-672.Page 75 of 197 Most of the estimated PM-related co-benefits for these rules would accrue to populations exposed to higher levels of

PM 2.5 . For this analysis, policy-specific air quality data are not available due to time or resource limitations, and thus, we are unable to estimate the percentage of premature mortality associated with this specific rule’s emission reductions at each

PM 2.5 level. As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the source apportionment modeling used to calculate the benefit-per-ton estimates for this sector. Using the Pope,

et al. (2002) study, 77 percent of the population is exposed to

annual mean PM 2.5 levels at or above the LML of 7.5 micrograms per cubic meter (μg/m 3 ). Using the Laden, et al. (2006) study, 25 percent of the population is exposed above the LML of 10 μg/m 3

. It is important to emphasize that we have high confidence in

PM 2.5 -related effects down to the lowest LML of the major cohort studies. This fact is important, because, as we model avoided premature deaths among populations exposed to levels of PM 2.5 , we have lower confidence in levels below the LML for each study. Every benefit analysis examining the potential effects of a change in environmental protection requirements is limited, to some extent, by data gaps, model capabilities (such as geographic coverage) and uncertainties in the underlying scientific and economic studies used to configure the benefitPage 76 of 197 and cost models. Despite these uncertainties, we believe the benefit analysis for these rules provides a reasonable indication of the expected health benefits of the rulemaking under a set of reasonable assumptions. This analysis does not include the type of detailed uncertainty assessment found in the

2006 PM 2.5 National Ambient Air Quality Standard (NAAQS) RIA because we lack the necessary air quality input and monitoring data to run the benefits model. In addition, we have not conducted air quality modeling for these rules, and using a benefit-per-ton approach adds another important source of uncertainty to the benefits estimates. The 2006 PM 2.5 NAAQS benefits analysis 12 provides an indication of the sensitivity of our results to various assumptions.

It should be noted that the monetized co-benefits estimates provided above do not include benefits from several important benefit categories, including exposure to HAP, NOx, ozone exposure, as well as ecosystem effects and visibility impairment. Although we do not have sufficient information or modeling available to provide monetized estimates for these proposed amendments, we include a qualitative assessment of

12 U.S. Environmental Protection Agency, 2006. Proposed amendments Regulatory Impact Analysis: PM 2.5 NAAQS . Prepared by Office of Air and Radiation. October. Available on the Internet at http://www.epa.gov/ttn/ecas/ria.html

.Page 77 of 197 these unquantified benefits in the RIA for these proposed

amendments. For more information on the benefits analysis, please refer to the RIA for these proposed amendments, which is available in

the docket. D. What are the non-air health, environmental and energy impacts? The EPA does not anticipate any significant non-air health, environmental or energy impacts as a result of these proposed

amendments. **IV. Solicitation of Public Comments and Participation** The EPA seeks full public participation in arriving at its final decisions, and strongly encourages comments on all aspects of this proposed rule from all interested parties. Whenever applicable, full supporting data and detailed analysis should be

submitted to allow the EPA to make maximum use of the comments. The agency invites all parties to coordinate their data collection activities with the EPA to facilitate mutually

beneficial and cost-effective data submissions. A redline/strikeout version of the complete NESHAP for stationary RICE, which shows the changes that are being proposed in this action, is available from the rulemaking docket. The EPA is seeking specific comment on the proposal to temporarily allow stationary emergency engines located at areaPage 78 of 197 sources to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any typeof non-emergency operation, including peak shaving and nonemergency demand response if the peak shaving is done as part of a peak shaving (load management) program with the local distribution system operator. The EPA is proposing that the allowance be removed after April 16, 2017. The EPA recognizes that the electricity grid achieves demand response and grid stability with and without the use of emergency stationary RICE. Alternative approaches include reductions or shifts in energy use, electricity storage, distribution automation, microgrids, natural gas-fired combustion turbines, and grid-connected distributed generation, including non-emergency engines and combined heat and power. Many of these approaches can provide additional benefits, such as additional energy efficiency, lower costs, shorter electricity outage times, and better integration of renewable energy generation into the electricity grid. Several studies project a significant future potential for using less energy in homes, buildings, and industry during times of peak electricity demand. The EPA seeks comment on how these investments may affect the number of hours which emergency stationary RICE are needed in the future to address electricity peak shaving and grid stability.Page 79 of 197 The EPA is also specifically seeking comment on the proposed criteria for expanding the current definition of remote areas of Alaska beyond areas that are not accessible by the FAHS. The EPA requests comment on whether the proposed system capacity limitation of 12 megawatts and the alternative 500 hour cap on annual usage (based on a 10-year rolling average) are the appropriate criteria for distinguishing the areas of Alaska that, while accessible by the FAHS, have the same unique challenges as the areas that are not accessible by the FAHS. The EPA is also seeking information related to irrigation pump engine sizes. During the 2010 rulemaking, the EPA relied upon several sources to determine the potential number of irrigation engines that may be impacted by the rule. Using these sources, the EPA estimated that the vast majority of the existing irrigation engines were less than or equal to 300 HP. The EPA received several comments confirming this estimation. The EPA seeks comprehensive, nationwide information on the size of existing irrigation engines to either confirm or refute our understanding of existing irrigation engine sizes; this information will assist EPA in assessing the impacts of the 2010 rule on existing irrigation engines. **V. Statutory and Executive Order Reviews**Page 80 of 197 A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory

Review Under section 3(f)(1) of Executive Order 12866 (58 FR 51735, October 4, 1993), this action is an “economically significant regulatory action” because it is likely to have an annual effect on the economy of $100 million or more. Accordingly, the EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Order 12866 and Executive Order 13563 (76 FR 3821, January 21, 2011), and any changes made in response to OMB recommendations have been documented in the docket for this action. In addition, the EPA prepared a RIA of the potential costs and benefits

associated with this action. A summary of the monetized benefits, compliance costs and net benefits for the proposed amendments to the stationary CI engines NESHAP at discount rates of 3 percent and 7 percent is in Table 4 of this preamble. The summary for stationary SI engines is included in Table 5 of this preamble. Table 4. Summary of the Monetized Benefits, Compliance Costs and Net benefits for the Proposed Amendments to the Stationary CI Engine NESHAP in 2013 (millions of 2010 dollars) a 3-Percent Discount Rate 7-Percent Discount Rate Total Monetized Benefits b $770 to $1,900 $690 to $1,700 Total Compliance $373 $373Page 81 of 197

Costs c Net Benefits $400 to $1,500 $320 to $1,300

Non-Monetized Benefits Health effects from exposure to HAP Health effects from direct exposure to NO 2 and ozone Health effects from PM 2 .5 exposure from VOC Ecosystem effects Visibility impairment

a All estimates are for the implementation year (2013) and are rounded to two significant figures. b The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . Co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.

c The engineering compliance costs are annualized using a 7- percent discount rate. Table 5. Summary of the Monetized Benefits, Compliance Costs and Net benefits for the Proposed Amendments to the Stationary SI Engine NESHAP in 2013 (millions of 2010 dollars) a 3-Percent Discount Rate 7-Percent Discount Rate Total Monetized Benefits b $62 to $150 $55 to $140 Total Compliance Costs c $115 $115 Net Benefits $-53 to $35 $-60 to $25

Non-Monetized Benefits Health effects from exposure to HAP Health effects from direct exposure to NO 2 and ozone Health effects from PM 2 .5 exposure from VOC Ecosystem effects Visibility impairment

a All estimates are for the implementation year (2013) and are rounded to two significant figures. b The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emittedPage 82 of 197

PM 2.5 . Co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.

c The engineering compliance costs are annualized using a 7- percent discount rate. For more information on the cost-benefit analysis, please refer to the RIA for these proposed amendments, which is

available in the docket. B. Paperwork Reduction Act This action does not impose any new information collection burden. This action does not impose an information collection burden because the agency is not requiring any additional recordkeeping, reporting, notification or other requirements in these proposed amendments. The changes being proposed in this action do not affect information collection, but include revisions to emission standards and other minor issues. However, the OMB has previously approved the information collection requirements contained in the existing regulations under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0548. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility ActPage 83 of 197 The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations and small governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The companies owning facilities with affected RICE can be grouped into small and large categories using SBA general size standard definitions. Size standards are based on industry classification codes (i.e., North American Industrial Classification System, or NAICS) that each company uses to identify the industry or industries in which they operate. The SBA defines a small business in terms of the maximum employment, annual sales, or annual energy-generating capacity (forPage 84 of 197 electricity generating units—EGUs) of the owning entity. These thresholds vary by industry and are evaluated based on the primary industry classification of the affected companies. In cases where companies are classified by multiple NAICS codes, the most conservative SBA definition (i.e., the NAICS code with the highest employee or revenue size standard) was used. As mentioned earlier in this preamble, facilities across several industries use affected CI and SI stationary RICE; therefore, a number of size standards are utilized in this analysis. For the 15 industries identified at the 6-digit NAICS code represented in this analysis, the employment size standard (where it applies) varies from 500 to 1,000 employees. The annual sales standard (where it applies) is as low as 0.75 million dollars and as high as 33.5 million dollars. In addition, for the electric power generation industry, the small business size standard is an ultimate parent entity defined ashaving a total electric output of 4 million megawatt-hours (MWhr) in the previous fiscal year. The specific SBA size standard is identified for each affected industry within the industry profile to support this economic analysis. After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This certification is based on the economic impact ofPage 85 of 197 this action to all affected small entities across all industries affected. The percentage of small entities impacted by this proposal having annualized costs of greater than 1 percent of their sales is less than 2 percent according to the small entity analysis. We conclude that there is no significant economic impact on a substantial number of small entities for this rule. For more information on the small entity impacts associated with the rule, please refer to the Economic Impact and Small Business Analyses in the public docket. These analyses can be found in the RIA for each of the rules affected by this action. Although the proposed reconsideration rule would not have a significant economic impact on a substantial number of small entities, EPA nonetheless tried to reduce the impact of the rule on small entities. When developing the revised standards, EPA took special steps to ensure that the burdens imposed on small entities were minimal. EPA conducted several meetings with industry trade associations to discuss regulatory options and the corresponding burden on industry, such as recordkeeping and reporting. In addition, as mentioned earlier in this preamble, EPA proposes to reduce regulatory requirements for a variety of

area sources affected under each of the RICE rules with amendments to the final RICE rules promulgated in 2010. We continue to be interested in the potential impacts of thisPage 86 of 197 proposed rule on small entities and welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act of 1995 This rule does not contain a federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the private sector in any one year. The EPA is proposing management practices for certain existing engines located at area sources and is proposing amendments that will provide owners and operators with alternative and less expensive compliance demonstration methods. As a result of these proposed changes, the EPA anticipates a

substantial reduction in the cost burden associated with this rule. Thus, this rule is not subject to the requirements of

sections 202 or 205 of UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The changes being proposed in this action by the agency will mostly affect stationary engine owners and operators and will not affect small governments. The proposed amendments

will lead to a reduction in the cost burden.

E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on thePage 87 of 197 relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This proposed action primarily affects private industry, and does not impose significant economic costs on state or local governments. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Order 13132 and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicits comment on this proposed action from state and local officials.

F. Executive Order 13175: Consultation and Coordination with

Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this action. The EPA specifically solicits additional comment on this proposed action from tribal officials.

G. Executive Order 13045: Protection of Children from Environmental Health and Safety RisksPage 88 of 197 The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it is based solely on technology performance. H. Executive Order 13211: Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution or Use This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action reduces the burden of the rule on owners and operators of stationary engines by providing less burdensome compliance demonstration methods to owners and operators and greater flexibility in the operation of emergency engines. As a result of these proposed changes, the EPA anticipates a substantial reduction in the cost burden

associated with this rule. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would bePage 89 of 197 inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable voluntary consensus standards. This proposed rulemaking involves technical standards. The EPA proposes to use EPA Method 25A of 40 CFR part 60, appendix A. While the agency identified two voluntary consensus standards as being potentially applicable, we do not propose to use it in this rulemaking. The two candidate voluntary consensus standards, ISO 14965:2000(E) and EN 12619 (1999), identified would not be practical due to lack of equivalency, documentation, validation data and other important technical and policy considerations. The search and review results have been documented and are placed in the docket for the proposed rule. EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income PopulationsPage 90 of 197 Executive Order 12898 (59 FR 7629 (February 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies and activities on minority populations and low-income populations in the United

States.

The EPA has concluded that it is not feasible to determine whether there would be disproportionately high and adverse human health or environmental effects on minority, low income or indigenous populations from the reconsideration of this final rule, as the EPA does not have specific information about the location of the stationary RICE affected by this rule. Although the EPA does not have specific engine location information, to the extent this rule achieves fewer reductions than the original rule, the decrease in reductions is primarily occurring in very remote areas that are sparsely populated.National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source Performance Standards for Stationary Internal Combustion Engines Page 91 of 197 **List of Subjects** 40 CFR part 60 Administrative practice and procedure, Air pollution control, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping. 40 CFR part 63 Administrative practice and procedure, Air pollution control, Hazardous substances, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping requirements.

______________________ Dated:

______________________ Lisa P. Jackson, Administrator.Page 92 of 197

For the reasons stated in the preamble, title 40, chapter I of the Code of Federal Regulations is amended as follows: **PART 60—[AMENDED]** 1. The authority citation for part 60 continues to read as

follows: Authority: 42 U.S.C. 7401, et seq

. **Subpart IIII—[amended]** 1. Section 60.4207 is amended by revising paragraph (b) to

read as follows: §60.4207 What fuel requirements must I meet if I am an owner or operator of a stationary CI internal combustion engine subject to this subpart?

* * * * * (b) Beginning October 1, 2010, owners and operators of stationary CI ICE subject to this subpart with a displacement of less than 30 liters per cylinder that use diesel fuel must use diesel fuel that meets the requirements of 40 CFR 80.510(b) for nonroad diesel fuel, except that any existing diesel fuel purchased (or otherwise obtained) prior to October 1, 2010, may be used until depleted.

* * * * * 2. Section 60.4211 is amended by revising paragraph (f) to

read as follows:Page 93 of 197

§60.4211 What are my compliance requirements if I am an owner or operator of a stationary CI internal combustion engine?

* * * * * (f) If you own or operate an emergency stationary ICE, you must operate the emergency stationary ICE according to the requirements in paragraphs (f)(1) through (3) of this section. In order for the engine to be considered an emergency stationary ICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (f)(1) through (3) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (f)(1) through (3) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations on non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary ICE in emergency situations. (2) You may operate your emergency stationary ICE for any combination of the purposes specified in paragraphs (f)(2)(i) through (iii) of this section for a maximum of 100 hours perPage 94 of 197

calendar year. Any operation for non-emergency situations as allowed by paragraph (f)(3) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (f)(2). (i) Emergency stationary ICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency ICE beyond 100 hours per calendar year. (ii) Emergency stationary ICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies.Page 95 of 197

(iii) Emergency stationary ICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary ICE may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 3. Section 60.4219 is amended by revising the definition of “Emergency stationary internal combustion engine” to read as

follows: §60.4219 What definitions apply to this subpart?

* * * * * Emergency stationary internal combustion engine means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary ICE must comply with the requirements specified in §60.4211(f) in order to be considered emergency stationary ICE. If the engine does not comply with thePage 96 of 197

requirements specified in §60.4211(f), then it is not considered to be an emergency stationary ICE under this subpart. (1) The stationary ICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary ICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary ICE used to pump water in the case of fire or flood, etc. (2) The stationary ICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §60.4211(f). (3) The stationary ICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §60.4211(f)(2)(ii) or (iii).

* * * * * **Subpart JJJJ—[amended]** 4. Section 60.4231 is amended by revising paragraphs (b) through (d) to read as follows:

§60.4231 What emission standards must I meet if I am a manufacturer of stationary SI internal combustion engines or equipment containing such engines?Page 97 of 197

* * * * * (b) Stationary SI internal combustion engine manufacturers must certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) (except emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(2), or manufactured on or after the applicable date in §60.4230(a)(4) for emergency stationary ICE with a maximum engine power greater than or equal to 130 HP, to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cubic centimeters (cc) that use gasoline to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90.Page 98 of 197

(c) Stationary SI internal combustion engine manufacturers must certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) (except emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) that are rich burn engines that use LPG and that are manufactured on or after the applicable date in §60.4230(a)(2) , or manufactured on or after the applicable date in §60.4230(a)(4) for emergency stationary ICE with a maximum engine power greater than or equal to 130 HP, to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that are rich burn engines that use LPG and that are manufactured on or after the applicable date in §60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cc that are rich burn engines that use LPG to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90.Page 99 of 197

(d) Stationary SI internal combustion engine manufacturers who choose to certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except gasoline and rich burn engines that use LPG and emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) under the voluntary manufacturer certification program described in this subpart must certify those engines to the certification emission standards for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers who choose to certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP (except gasoline and rich burn engines that use LPG), must certify those engines to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cc (except gasoline and rich burn engines that use LPG) to the certification emission standards for new nonroad SI engines in 40 CFR part 90. For stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except gasoline and rich burn engines that use LPG and emergency stationary ICE with a maximum engine powerPage 100 of 197

greater than 25 HP and less than 130 HP) manufactured prior to January 1, 2011, manufacturers may choose to certify these engines to the standards in Table 1 to this subpart applicable to engines with a maximum engine power greater than or equal to

100 HP and less than 500 HP.

* * * * * 5. Section 60.4243 is amended by revising paragraph (d) to

read as follows: §60.4243 What are my compliance requirements if I am an owner or operator of a stationary SI internal combustion engine?

* * * * * (d) If you own or operate an emergency stationary ICE, you must operate the emergency stationary ICE according to the requirements in paragraphs (d)(1) through (3) of this section. In order for the engine to be considered an emergency stationary ICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (d)(1) through (3) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (d)(1) through (3) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations onPage 101 of 197

non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary ICE in emergency situations. (2) You may operate your emergency stationary ICE for any combination of the purposes specified in paragraphs (d)(2)(i) through (iii) of this section for a maximum of 100 hours per calendar year. Any operation for non-emergency situations as allowed by paragraph (d)(3) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (d)(2). (i) Emergency stationary ICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency ICE beyond 100 hours per calendar year.Page 102 of 197

(ii) Emergency stationary ICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. (iii) Emergency stationary ICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary ICE may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (d)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 6. Section 60.4248 is amended by revising the definition of “Emergency stationary internal combustion engine” to read as

follows: §60.4248 What definitions apply to this subpart?Page 103 of 197

* * * * * Emergency stationary internal combustion engine means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary ICE must comply with the requirements specified in §60.4243(d) in order to be considered emergency stationary ICE. If the engine does not comply with the requirements specified in §60.4243(d), then it is not considered to be an emergency stationary ICE under this subpart. (1) The stationary ICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary ICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary ICE used to pump water in the case of fire or flood, etc. (2) The stationary ICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §60.4243(d). (3) The stationary ICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §60.4243(d)(2)(ii) or (iii).Page 104 of 197

* * * * * 7. Table 2 to Subpart JJJJ of Part 60 is revised to read as

follows: **Table 2 to Subpart JJJJ of Part 60 –- Requirements for Performance Tests**  As stated in §60.4244, you must comply with the following requirements for performance tests within 10 percent of 100 percent peak (or the highest achievable) load: **For each Complying with the**  **requirement to**  **You must U**  **sing According to the**  **following requirement**  **s** 1. Stationary SI internal combustion engine demonstrati ng compliance according to §60.4244. a. limit the concentrati on of NO x in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A or ASTM Method D6522- 00(2005) a

. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device. ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for NO x concentrati on.Page 105 of 197

iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for NO x concentrati on.

v. Measure NO x at the exhaust of the stationary internal combustion engine. ( 5) Method 7E of 40 CFR part 60, a ppendix A, Method D6522- 00(2005) a , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.Page 106 of 197

b. limit the concentrati on of CO in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 40 CFR pa r t 60, Appendix A or ASTM Method D6522- 00(2005) a

. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device. ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for CO concentrati on. iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.Page 107 of 197

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for CO concentrati on.

v. Measure CO at the exhaust of the stationary internal combustion engine. ( 5) Method 10 of 40 CFR part 60, a ppendix A, A STM Method D6522- 00(2005) a , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.

c. limit the concentrati on of VOC in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device.Page 108 of 197

ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for VOC concentrati on. iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for VOC concentrati on.Page 109 of 197

v. Measure VOC at the exhaust of the stationary internal combustion engine. (5) M ethods 25A and 18 of 4 0 CFR part 60, a ppendix A, Method 25A with the use of a methane cutter as described in 40 CFR 1065.265, Method 18 or 40 CFR part 60, appendix A c,d , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.

a ASTM D6522-00 is incorporated by reference; see 40 CFR 60.17. Also, you may petition the Administrator for approval to use alternative methods for portable analyzer. b You may use ASME PTC 19.10-1981, Flue and Exhaust Gas Analyses, for measuring the O 2 content of the exhaust gas as an alternative to EPA Method 3B.

c You may use EPA Method 18 of 40 CFR part 60, appendix A, provided that you conduct an adequate presurvey test prior to the emissions test, such as the one described in OTM 11 on EPA’s website ( http://www.epa.gov/ttn/emc/prelim/otm11.pdf ). d You may use ASTM D6420-99 (2004), Test Method for Determination of Gaseous Organic Compounds by Direct Interface Gas Chromatography/Mass Spectrometry as an alternative to EPA Method 18 for measuring total nonmethane organic. **PART 63--[AMENDED]**Page 110 of 197

8. The authority citation for part 63 continues to read as

follows: Authority: 42 U.S.C. 7401, et seq

. **Subpart ZZZZ--[amended]** 9. Section 63.6585 is amended by adding paragraph (f) to

read as follows: §63.6585 Am I subject to this subpart?

* * * * * (f) The emergency stationary RICE listed in paragraphs (f)(1) through (3) of this section are not subject to this subpart. The stationary RICE must meet the definition of an emergency stationary RICE in §63.6675, which includes operating according to the provisions specified in §63.6640(f). (1) Existing residential emergency stationary RICE located

at an area source of HAP emissions. (2) Existing commercial emergency stationary RICE located

at an area source of HAP emissions. (3) Existing institutional emergency stationary RICE

located at an area source of HAP emissions. 10. Section 63.6590 is amended by removing paragraphs (b)(3)(vi) through (viii). 11. Section 63.6595 is amended by revising paragraph (a)(1)

to read as follows: §63.6595 When do I have to comply with this subpart?Page 111 of 197

(a) * * * (1) If you have an existing stationary RICE, excluding existing non-emergency CI stationary RICE, with a site rating of more than 500 brake HP located at a major source of HAP emissions, you must comply with the applicable emission limitations, operating limitations and other requirements no later than June 15, 2007. If you have an existing non-emergency CI stationary RICE with a site rating of more than 500 brake HP located at a major source of HAP emissions, an existing stationary CI RICE with a site rating of less than or equal to 500 brake HP located at a major source of HAP emissions, or an existing stationary CI RICE located at an area source of HAP emissions, you must comply with the applicable emission limitations, operating limitations, and other requirements no later than May 3, 2013. If you have an existing stationary SI RICE with a site rating of less than or equal to 500 brake HP located at a major source of HAP emissions, or an existing stationary SI RICE located at an area source of HAP emissions, you must comply with the applicable emission limitations, operating limitations, and other requirements no later than October 19, 2013.

* * * * *

12. Section 63.6602 is revised to read as follows:Page 112 of 197

§63.6602 What emission limitations and other requirements must I meet if I own or operate an existing stationary RICE with a site rating of equal to or less than 500 brake HP located at a major source of HAP emissions? If you own or operate an existing stationary RICE with a site rating of equal to or less than 500 brake HP located at a major source of HAP emissions, you must comply with the emission limitations and other requirements in Table 2c to this subpart which apply to you. Compliance with the numerical emission limitations established in this subpart is based on the results of testing the average of three 1-hour runs using the testing requirements and procedures in §63.6620 and Table 4 to this subpart. 13. Section 63.6603 is amended by: a. Revising the section heading; b. Revising paragraph (b); and c. Adding paragraphs (c) through (e) to read as follows: §63.6603 What emission limitations, operating limitations, and other requirements must I meet if I own or operate an existing stationary RICE located at an area source of HAP emissions?

* * * * *(b) If you own or operate an existing stationary nonemergency CI RICE with a site rating of more than 300 HP located at an area source of HAP that meets either paragraph (b)(1) orPage 113 of 197

(b)(2) of this section, you do not have to meet the numerical CO emission limitations specified in Table 2d of this subpart. Existing stationary non-emergency CI RICE with a site rating of

more than 300 HP located at an area source of HAP that meet either paragraph (b)(1) or (b)(2) of this section must meet the management practices that are shown for stationary non-emergency CI RICE with a site rating of less than or equal to 300 HP in Table 2d of this subpart. (1) The area source is located in an area of Alaska that is not accessible by the Federal Aid Highway System (FAHS). (2) The stationary RICE is located at an area source that meets paragraphs (b)(2)(i), (b)(2)(ii), and (b)(2)(iii) of this

section. (i) The only connection to the FAHS is through the Alaska Marine Highway System (AMHS), or the stationary RICE operation is within an isolated grid in Alaska that is not connected to the statewide electrical grid referred to as the Alaska Railbelt

Grid. (ii) At least 10 percent of the power generated by the stationary RICE on an annual basis is used for residential

purposes. (iii) The generating capacity of the area source is less than 12 megawatts, or the stationary RICE is used exclusivelyPage 114 of 197

for backup power for renewable energy and is used less than 500 hrs per year on a 10 year rolling average. (c) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source

of HAP emissions that is certified to the Tier 1 or Tier 2

emission standards in Table 1 of 40 CFR 89.112 and that is subject to an enforceable state or local standard that requires the engine to be replaced no later than June 1, 2018, you may until May 3, 2015, choose to comply with the management practices that are shown for stationary non-emergency CI RICE with a site rating of less than or equal to 300 HP in Table 2d of this subpart instead of the applicable emission limitations in Table 2d, operating limitations in Table 2b, and crankcase ventilation system requirements in §63.6625(g). After May 3, 2015, you must comply with the emission limitations in Table 2dand operating limitations in Table 2b that apply for nonemergency CI RICE with a site rating of more than 300 HP located at an area source of HAP emissions. After May 3, 2015, you must also comply with the crankcase ventilation system requirements in §63.6625(g). (d) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP emissions that is certified to the Tier 3 (Tier 2 for engines above 560 kW) emission standards in Table 1 of 40 CFRPage 115 of 197

89.112, you may comply with the requirements under this part by meeting the requirements for Tier 3 engines (Tier 2 for engines above 560 kW) in 40 CFR part 60 subpart IIII instead of the emission limitations and other requirements that would otherwise apply under this part for existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP

emissions. (e) An existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at area sources of HAP must meet the definition of remote stationary RICE in §63.6675 on the initial compliance date for the engine, October 19, 2013, in order to be considered a remote stationaryRICE under this subpart. Owners and operators of existing nonemergency SI 4SLB and 4SRB stationary RICE with a site rating of

more than 500 HP located at area sources of HAP that meet the definition of remote stationary RICE in §63.6675 of this subpart as of October 19, 2013 must evaluate the status of their stationary RICE every 12 months. Owners and operators must keep

records of the initial and annual evaluation of the status of the engine. If the evaluation indicates that the stationary RICE no longer meets the definition of remote stationary RICE in §63.6675 of this subpart, the owner or operator must comply with all of the requirements for existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HPPage 116 of 197

located at area sources of HAP that are not remote stationary RICE within one year of the evaluation.

14. Section 63.6604 is revised to read as follows: §63.6604 What fuel requirements must I meet if I own or operate an existing stationary CI RICE? If you own or operate an existing non-emergency, non-black start CI stationary RICE with a site rating of more than 300 brake HP with a displacement of less than 30 liters per cylinder that uses diesel fuel, you must use diesel fuel that meets the requirements in 40 CFR 80.510(b) for nonroad diesel fuel. Existing non-emergency CI stationary RICE located in Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or at area sources in areas of Alaska that meet either §63.6603(b)(1) or §63.6603(b)(2) are exempt from the requirements of this section. 15. Section 63.6605 is amended by revising paragraph (a) to

read as follows: §63.6605 What are my general requirements for complying with this subpart? (a) You must be in compliance with the emission limitations, operating limitations, and other requirements in this subpart that apply to you at all times.

* * * * *Page 117 of 197

16. Section 63.6620 is amended by revising paragraphs (b) and (e) to read as follows: §63.6620 What performance tests and other procedures must I

use?

* * * * * (b) Each performance test must be conducted according to the requirements that this subpart specifies in Table 4 to this subpart. If you own or operate a non-operational stationary RICE that is subject to performance testing, you do not need to start up the engine solely to conduct the performance test. Owners and operators of a non-operational engine can conduct the performance test when the engine is started up again. The test must be conducted at any load condition within plus or minus 10 percent of 100 percent load for the stationary RICE listed in paragraphs (b)(1) through (4) of this section. (1) Non-emergency 4SRB stationary RICE with a site rating of greater than 500 brake HP located at a major source of HAP

emissions. (2) New non-emergency 4SLB stationary RICE with a site rating of greater than or equal to 250 brake HP located at a major source of HAP emissions. (3) New non-emergency 2SLB stationary RICE with a site rating of greater than 500 brake HP located at a major source of

HAP emissions.Page 118 of 197

(4) New non-emergency CI stationary RICE with a site rating of greater than 500 brake HP located at a major source of HAP

emissions.

* * * * * (e)(1) You must use Equation 1 of this section to

determine compliance with the percent reduction requirement:

Where:

C i = concentration of CO, THC, or formaldehyde at the control device inlet, C o = concentration of CO, THC, or formaldehyde at the control device outlet, and R = percent reduction of CO, THC, or formaldehyde emissions.

(2) You must normalize the carbon monoxide (CO), total hydrocarbons (THC), or formaldehyde concentrations at the inlet and outlet of the control device to a dry basis and to 15 percent oxygen, or an equivalent percent carbon dioxide (CO 2 ). If pollutant concentrations are to be corrected to 15 percent oxygen and CO 2 concentration is measured in lieu of oxygen concentration measurement, a CO 2 correction factor is needed.

Calculate the CO 2 correction factor as described in paragraphs (e)(2)(i) through (iii) of this section. C i - C o

C i x 100 = R ( Eq . 1)Page 119 of 197

(i) Calculate the fuel-specific F o value for the fuel burned during the test using values obtained from Method 19,

Section 5.2, and the following equation:

Where:

F o = Fuel factor based on the ratio of oxygen volume to the ultimate CO 2 volume produced by the fuel at zero percent excess air. 0.209 = Fraction of air that is oxygen, percent/100. F d = Ratio of the volume of dry effluent gas to the gross calorific value of the fuel from Method 19, dsm 3 /J (dscf/10 6 Btu). F c = Ratio of the volume of CO 2 produced to the gross calorific value of the fuel from Method 19, dsm 3 /J (dscf/10 6 Btu) (ii) Calculate the CO 2 correction factor for correcting

measurement data to 15 percent oxygen, as follows: Where:

X co2 = CO 2 correction factor, percent. 5.9 = 20.9 percent O 2 - 15 percent O 2 , the defined O 2 correction value, percent. (iii) Calculate the CO, THC, and formaldehyde gas concentrations adjusted to 15 percent O 2 using CO 2 as follows: F o = 0.209 F d F c ( Eq . 2)

X CO2 = 5.9 F o ( Eq . 3)

C adj = C d X CO2 % CO 2 ( Eq . 4)Page 120 of 197

Where:

%CO 2 = Measured CO 2 concentration measured, dry basis, percent.

* * * * * 17. Section 63.6625 is amended by: a. Revising the first sentence in paragraph (a); b. Revising the first sentence in paragraph (b); c. Revising paragraph (e)(6); and d. Revising paragraph (g) to read as follows: §63.6625 What are my monitoring, installation, collection, operation, and maintenance requirements? (a) If you elect to install a CEMS as specified in Table 5 of this subpart, you must install, operate, and maintain a CEMS to monitor CO and either oxygen or CO 2 according to the requirements in paragraphs (a)(1) through (4) of this section. If you are meeting a requirement to reduce CO emissions, the

CEMS must be installed at both the inlet and outlet of the control device. If you are meeting a requirement to limit the concentration of CO, the CEMS must be installed at the outlet of

the control device. * * *

* * * * * (b) If you are required to install a continuous parameter monitoring system (CPMS) as specified in Table 5 of this subpart, you must install, operate, and maintain each CPMSPage 121 of 197

according to the requirements in paragraphs (b)(1) through (6)

of this section. * * *

* * * * * (e) * * * (6) An existing non-emergency, non-black start stationary

RICE located at an area source of HAP emissions which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis;

* * * * * (g) If you own or operate an existing non-emergency, non-black start CI engine greater than or equal to 300 HP that is not equipped with a closed crankcase ventilation system, you must comply with either paragraph (g)(1) or paragraph (g)(2) of this section. Owners and operators must follow the manufacturer’s specified maintenance requirements for operating and maintaining the open or closed crankcase ventilation systems and replacing the crankcase filters, or can request the Administrator to approve different maintenance requirements that are as protective as manufacturer requirements. Existing CI engines

located at area sources in areas of Alaska that meet either §63.6603(b)(1) or §63.6603(b)(2) do not have to meet the requirements of paragraph (g) of this section.Page 122 of 197

(1) Install a closed crankcase ventilation system that prevents crankcase emissions from being emitted to the atmosphere, or (2) Install an open crankcase filtration emission control system that reduces emissions from the crankcase by filtering the exhaust stream to remove oil mist, particulates and metals.

* * * * * 18. Section 63.6630 is amended by: a. Revising the section heading; b. Revising paragraph (a); c. Adding paragraph (d); and d. Adding paragraph (e) to read as follows: §63.6630 How do I demonstrate initial compliance with the emission limitations, operating limitations, and other requirements? (a) You must demonstrate initial compliance with each emission limitation, operating limitation, and other requirement that applies to you according to Table 5 of this subpart.

* * * * * (d) Non-emergency 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions by 76 percent or more can demonstrate initial compliance with the formaldehyde emission limit by testing for THC instead of formaldehyde. The testing must be conducted according to the requirements in TablePage 123 of 197

4 of this subpart. The average reduction of emissions of THC determined from the performance test must be equal to or greater than 30 percent. (e) The initial compliance demonstration required for existing non-emergency 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year must be conducted according to the following requirements: (1) The compliance demonstration must consist of at least

three test runs. (2) Each test run must be of at least 15 minute duration, except that each test conducted using the method in appendix A to this subpart must consist of at least one measurement cycle and include at least 2 minutes of test data phase measurement. (3) If you are demonstrating compliance with the CO concentration or CO percent reduction requirement, you must measure CO emissions using one of the CO measurement methods specified in Table 4 of this subpart, or using appendix A to this subpart. (4) If you are demonstrating compliance with the THC percent reduction requirement, you must measure THC emissions using Method 25A of 40 CFR part 60, appendix A.Page 124 of 197

(5) You must measure O 2 using one of the O 2 measurement methods specified in Table 4 of this subpart. Measurements to

determine O 2 concentration must be made at the same time as the

measurements for CO or THC concentration. (6) If you are demonstrating compliance with the CO or THC percent reduction requirement, you must measure CO or THC

emissions and O 2 emissions simultaneously at the inlet and outlet

of the control device. 19. Section 63.6640 is amended by: a. Amending the section heading; b. Revising paragraph (a); c. Revising paragraph (c); and d. Revising paragraph (f) to read as follows: §63.6640 How do I demonstrate continuous compliance with the emission limitations, operating limitations, and other requirements? (a) You must demonstrate continuous compliance with each emission limitation, operating limitation, and other requirements in Tables 1a and 1b, Tables 2a and 2b, Table 2c, and Table 2d to this subpart that apply to you according to methods specified in Table 6 to this subpart.

* * * * * (c) The annual compliance demonstration required for existing non-emergency 4SLB and 4SRB stationary RICE with a sitePage 125 of 197

rating of more than 500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year must be conducted according to the following requirements: (1) The compliance demonstration must consist of at least

one test run. (2) Each test run must be of at least 15 minute duration, except that each test conducted using the method in appendix A to this subpart must consist of at least one measurement cycle and include at least 2 minutes of test data phase measurement. (3) If you are demonstrating compliance with the CO concentration or CO percent reduction requirement, you must measure CO emissions using one of the CO measurement methods specified in Table 4 of this subpart, or using appendix A to this subpart. (4) If you are demonstrating compliance with the THC percent reduction requirement, you must measure THC emissions using Method 25A of 40 CFR part 60, appendix A. (5) You must measure O 2 using one of the O 2 measurement methods specified in Table 4 of this subpart. Measurements to

determine O 2 concentration must be made at the same time as the

measurements for CO or THC concentration. (6) If you are demonstrating compliance with the CO or THC percent reduction requirement, you must measure CO or THCPage 126 of 197

emissions and O 2 emissions simultaneously at the inlet and outlet

of the control device. (7) If the results of the annual compliance demonstration show that the emissions exceed the levels specified in Table 6 of this subpart, the stationary RICE must be shut down as soon as safely possible, and appropriate corrective action must be taken (e.g., repairs, catalyst cleaning, catalyst replacement). The stationary RICE must be retested within 7 days of being restarted and the emissions must meet the levels specified in Table 6 of this subpart. If the retest shows that the emissions continue to exceed the specified levels, the stationary RICE must again be shut down as soon as safely possible, and the stationary RICE may not operate, except for purposes of startup and testing, until the owner/operator demonstrates through testing that the emissions do not exceed the levels specified in Table 6 of this subpart.

* * * * * (f) If you own or operate an emergency stationary RICE, you must operate the emergency stationary RICE according to the requirements in paragraphs (f)(1) through (4) of this section. In order for the engine to be considered an emergency stationary RICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year,Page 127 of 197

as described in paragraphs (f)(1) through (4) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (f)(1) through (4) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations on non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary RICE in emergency situations. (2) You may operate your emergency stationary RICE for any combination of the purposes specified in paragraphs (f)(2)(i) through (iii) of this section for a maximum of 100 hours per calendar year. Any operation for non-emergency situations as allowed by paragraphs (f)(3) and (4) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (f)(2). (i) Emergency stationary RICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner orPage 128 of 197

operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency RICE beyond 100 hours per calendar year. (ii) Emergency stationary RICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. (iii) Emergency stationary RICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary RICE located at major sources ofHAP may be operated for up to 50 hours per calendar year in nonemergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to generate incomePage 129 of 197

for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity. (4) Existing emergency stationary RICE located at area sources of HAP may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section.(i) Prior to April 16, 2017, the 50 hours per year for nonemergency situations can be used for peak shaving or nonemergency demand response to generate income for a facility, or to otherwise supply power as part of a financial arrangement with another entity if engines is operated as part of a peak shaving (load management program) with the local distribution system operator and the power is provided only to the facility itself or to support the local distribution system. (ii) On or after April 16, 2017, the 50 hours per year fornon-emergency situations cannot be used for peak shaving or nonemergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 20. Section 63.6645 is amended by adding a new paragraph (i) to read as follows:Page 130 of 197

§63.6645 What notifications must I submit and when?

* * * * * (i) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source

of HAP emissions that is certified to the Tier 1 or Tier 2 emission standards in Table 1 of 40 CFR 89.112 and subject to an enforceable state or local standard requiring engine replacement and you intend to meet management practices rather than emission limits, as specified in §63.6603(c), you must submit a notification by March 3, 2013, stating that you intend to use the provision in §63.6603(c) and identifying the state or local regulation that the engine is subject to. 21. Section 63.6675 is amended by: a. Adding in alphabetical order the definition of Alaska Railbelt Grid; b. Revising the definition of Emergency stationary RICE ;

and c. Adding in alphabetical order the definition of Remote stationary RICE to read as follows. §63.6675 What definitions apply to this subpart?

Alaska Railbelt Grid means the service areas of the six regulated public utilities that extend from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are Golden Valley Electric Association; Chugach Electric Association;Page 131 of 197

Matanuska Electric Association; Homer Electric Association; Anchorage Municipal Light & Power; and the City of Seward Electric System.

* * * * * Emergency stationary RICE means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary RICE must comply with the requirements specified in §63.6640(f) in order to be considered emergency stationary RICE. If the engine does not comply with the requirements specified in §63.6640(f), then it is not considered to be an emergency stationary RICE under this subpart. (1) The stationary RICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary RICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary RICE used to pump water in the case of fire or flood, etc. (2) The stationary RICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §63.6640(f).Page 132 of 197

(3) The stationary RICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §63.6640(f)(2)(ii) or (iii) and §63.6640(f)(4)(i).

* * * * * Remote stationary RICE means stationary RICE meeting any of the following criteria: (1) Stationary RICE located in an offshore area that is beyond the line of ordinary low water along that portion of the

coast of the United States that is in direct contact with the open seas and beyond the line marking the seaward limit of

inland waters. (2) Stationary RICE located on a pipeline segment that meets both of the criteria in paragraphs (2)(i) and (ii) of this

definition. (i) A pipeline segment with 10 or fewer buildings intended for human occupancy within 220 yards (200 meters) on either side of the centerline of any continuous 1-mile (1.6 kilometers) length of pipeline. Each separate dwelling unit in a multiple dwelling unit building is counted as a separate building intended for human occupancy. (ii) The pipeline segment does not lie within 100 yards (91 meters) of either a building or a small, well-defined outside area (such as a playground, recreation area, outdoor theater, orPage 133 of 197

other place of public assembly) that is occupied by 20 or more persons on at least 5 days a week for 10 weeks in any 12-month period. The days and weeks need not be consecutive. The building or area is considered occupied for a full day if it is occupied for any portion of the day. (iii) For purposes of this paragraph (2), the term pipeline segment means all parts of those physical facilities through which gas moves in transportation, including but not limited to pipe, valves, and other appurtenance attached to pipe, compressor units, metering stations, regulator stations, delivery stations, holders, and fabricated assemblies. Stationary RICE located within 50 yards (46 m) of the pipeline segment providing power for equipment on a pipeline segment are part of the pipeline segment. Transportation of gas means the gathering, transmission, or distribution of gas by pipeline, or the storage of gas. A building is intended for human occupancy if its primary use is for a purpose involving the presence of

humans. (3) Stationary RICE that are not located on natural gas pipelines and that have 5 or fewer buildings intended for human occupancy within a 0.25 mile radius around the engine.

* * * * * 22. Table 1b to Subpart ZZZZ of Part 63 is revised to read

as follows:Page 134 of 197

**Table 1b to Subpart ZZZZ of Part 63. Operating Limitations for Existing, New, and Reconstructed SI 4SRB Stationary RICE >500 HP**  **Located at a Major Source of HAP Emissions** As stated in §§63.6600, 63.6603, 63.6630 and 63.6640, you must comply with the following operating limitations for existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions:

**For each... Y**  **ou must meet the following operating limitation, except**  **during periods of startup...** 1. existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to reduce formaldehyde emissions by 76 percent or more (or by 75 percent or more, if applicable) and using NSCR;

or existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd or less at 15 percent O 2 and using NSCR; a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water at 100 percent load plus or minus 10 percent from the pressure drop across the catalyst measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 750°F and less than or equal to 1250°F. 1Page 135 of 197

2. existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to reduce formaldehyde emissions by 76 percent or more (or by 75 percent or more, if applicable) and not using NSCR;

or existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd or less at 15 percent O 2 and not using NSCR. Comply with any operating limitations approved by the Administrator.

1 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.8(f) for a different temperature range. 23. Table 2b to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2b to Subpart ZZZZ of Part 63** 

. **Operating Limitations for New and Reconstructed 2SLB and CI Stationary RICE >500 HP**  **Located at a Major Source of HAP Emissions, New and Reconstructed 4SLB Stationary RICE**  **≥ 250 HP Located at a Major**  **Source of HAP Emissions, Existing CI Stationary RICE >500 HP, and Existing 4SLB Stationary RICE >500 HP Located at an Area**  **Source of HAP Emissions** As stated in §§63.6600, 63.6601, 63.6603, 63.6630, and 63.6640, you must comply with the following operating limitations for new and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions; new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions; and existing CI stationary RICE >500 HP **:**

**For each... Y**  **ou must meet the following operating limitation, except**  **during periods of startup...**Page 136 of 197

1. New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to reduce CO emissions and using an oxidation catalyst;

and

New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust and using an oxidation catalyst a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water at 100 percent load plus or minus 10 percent from the pressure drop across the catalyst that was measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 450°F and less than or equal to 1350°F. 1

2. Existing CI stationary RICE >500 HP complying with the requirement to limit or reduce the concentration of CO in the stationary RICE exhaust and using an oxidation catalyst a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water from the pressure drop across the catalyst that was measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 450°F and less than or equal to 1350°F. 1Page 137 of 197

3. New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to reduce CO emissions and not using an oxidation catalyst;

and

New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust and not using an oxidation catalyst

and existing CI stationary RICE >500 HP complying with the requirement to limit or reduce the concentration of CO in the stationary RICE exhaust and not using an oxidation catalyst Comply with any operating limitations approved by the Administrator.

1 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.8(f) for a different temperature range. 24. Table 2c to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2c to Subpart ZZZZ of Part 63** 

. **Requirements for Existing Compression Ignition Stationary RICE Located at a Major Source**  **of HAP Emissions and Existing Spark Ignition Stationary RICE ≤**  **500 HP Located at a Major Source of HAP Emissions**Page 138 of 197

As stated in §§63.6600, 63.6602, and 63.6640, you must comply with the following requirements for existing compression ignition stationary RICE located at a major source of HAP emissions and existing spark ignition stationary RICE ≤ 500 HP located at a major source of HAP emissions **:**

**F or each... You must meet the**  **following requirement, except during periods of**  **startup... D**  **uring periods of startup you must...** 

1. Emergency stationary CI RICE and black start stationary CI RICE. 1 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 2 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 3 Minimize the engine’s time spent a t idle and minimize t he engine’s startup t ime at startup to a

period needed for a ppropriate and safe loading of the engine, not to exceed 30 minutes, a fter which time the non- s tartup emission

limitations apply. 32. NonEmergency, nonblack start stationary CI RICE <100 HP. a. Change oil and filter every 1,000 hours of operation or annually, whichever comes first 2 ; b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 33. NonEmergency, nonblack start CI stationary RICE 100< HP< 300 HP. Limit concentration of CO in the stationary RICE exhaust to 230 ppmvd or less at 15 percent O 2 .Page 139 of 197

4. NonEmergency, nonblack start CI stationary RICE 300<HP< 500. a. Limit concentration of CO in the stationary RICE exhaust to 49 ppmvd or less at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more.5. NonEmergency, nonblack start stationary CI RICE >500 HP. a. Limit concentration of CO in the stationary RICE exhaust to 23 ppmvd or less at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 6. Emergency stationary SI RICE and black start stationary SI RICE. 1 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 2 b. Inspect spark plugs every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 37. NonEmergency, nonblack start stationary SI RICE <100 HP that are not 2SLB stationary RICE. a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first 2 ; b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 3Page 140 of 197

8. NonEmergency, nonblack start 2SLB stationary SI RICE <100 HP. a. Change oil and filter every 4,320 hours of operation or annually, whichever comes first 2 ; b. Inspect spark plugs every 4,320 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 4,320 hours of operation or annually, whichever comes first, and replace as necessary. 39. Nonemergency, nonblack start 2SLB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of CO in the stationary RICE exhaust to 225 ppmvd or less at 15 percent O 210. Nonemergency, nonblack start 4SLB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of CO in the stationary RICE exhaust to 47 ppmvd or less at 15 percent O 211. Nonemergency, nonblack start 4SRB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of formaldehyde in the stationary RICE exhaust to 10.3 ppmvd or less at 15 percent O 212. Nonemergency, nonblack start stationary RICE 100 ≤ HP ≤ 500 which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis Limit concentration of CO in the stationary RICE exhaust to 177 ppmvd or less at 15 percent O 2

1 If an emergency engine is operating during an emergency and it is not possible to shut down the engine in order to perform the work practice requirements on the schedule required in Table 2c of this subpart, or if performing the work practice on thePage 141 of 197

required schedule would otherwise pose an unacceptable risk under federal, state, or local law, the work practice can be delayed until the emergency is over or the unacceptable risk under federal, state, or local law has abated. The work practice should be performed as soon as practicable after the emergency has ended or the unacceptable risk under federal, state, or local law has abated. Sources must report any failure to perform the work practice on the schedule required and the federal, state or local law under which the risk was deemed unacceptable. 2 Sources have the option to utilize an oil analysis program as described in §63.6625(i) in order to extend the specified oil change requirement in Table 2c of this subpart. 3 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.6(g) for alternative work practices. 25. Table 2d to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2d to Subpart ZZZZ of Part 63** 

. **Requirements for Existing Stationary RICE Located at Area Sources of HAP Emissions**  As stated in §§63.6603 and 63.6640, you must comply with the following requirements for existing stationary RICE located at area sources of HAP emissions **:**

**For each... You must meet the following**  **requirement, except during periods of**  **startup... During periods of**  **startup you must...**

1. Non-Emergency, non-black start CI stationary RICE < 300 HP a. Change oil and filter every 1,000 hours of operation or annually, whichever comes first; 1 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of Minimize the engine’s time spent at idle and minimize the engine’s startup time at startup to a period needed for appropriate and safe loading of the engine, not to exceed 30 minutes, after which time the non-startup emission limitations apply.Page 142 of 197

operation or annually, whichever comes first, and replace as necessary. 2. Non-Emergency, non-black start CI stationary RICE 300<HP< 500 a. Limit concentration of CO in the stationary RICE exhaust to 49 ppmvd at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 3. Non-Emergency, non-black start CI stationary RICE >500 HP a. Limit concentration of CO in the stationary RICE exhaust to 23 ppmvd at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 4. Emergency stationary CI RICE and black start stationary CI RICE 2 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 1 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary.Page 143 of 197

5. Emergency stationary SI RICE; black start stationary SIRICE; nonemergency, nonblack start 4SLB stationary RICE >500 HP that operate 24 hours or less per calendar year; non-emergency, non-black start 4SRB stationary RICE >500 HP that operate 24 hours or less per calendar year 2 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 6. Non-emergency, non-black start 2SLB stationary RICE a. Change oil and filter every 4,320 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 4,320 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 4,320 hours of operation or annually, whichever comes first, and replace as necessary.Page 144 of 197

7. Non-emergency, non-black start 4SLB stationary RICE ≤ 500 HP; nonemergency, nonblack start 4SLB remote stationary RICE >500 HP a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 8. Non-emergency, non-black start 4SLB stationary RICE >500 HP that are not remote stationary RICE and that operate more than 24 hours per calendar year Install an oxidation catalyst to reduce HAP emissions from the stationary RICEPage 145 of 197

9. Non-emergency, non-black start 4SRB stationary RICE ≤ 500 HP; nonemergency, nonblack start 4SRB remote stationary RICE >500 HP a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 10. Non-emergency, non-black start 4SRB stationary RICE >500 HP that are not remote stationary RICE and that operate more than 24 hours per calendar year Install NSCR to reduce HAP emissions from the stationary RICEPage 146 of 197

11. Non-emergency, non-black start stationary RICE which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 1 Sources have the option to utilize an oil analysis program as described in §63.6625(i) in order to extend the specified oil change requirement in Table 2d of this subpart. 2 If an emergency engine is operating during an emergency and it is not possible to shut down the engine in order to perform the management practice requirements on the schedule required in Table 2d of this subpart, or if performing the management practice on the required schedule would otherwise pose an unacceptable risk under federal, state, or local law, the management practice can be delayed until the emergency is over or the unacceptable risk under federal, state, or local law has abated. The management practice should be performed as soon as practicable after the emergency has ended or the unacceptable risk under federal, state, or local law has abated. Sources must report any failure to perform the management practice on the schedule required and the federal, state or local law under which the risk was deemed unacceptable. 26. Table 3 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 3 to Subpart ZZZZ of Part 63. Subsequent Performance Tests** As stated in §§63.6615 and 63.6620, you must comply with the following subsequent performance test requirements:Page 147 of 197

**For each... Complying with the**  **requirement to... Y**  **ou must...**

1. New or reconstructed 2SLB stationary RICE >500 HP located at major sources; new or reconstructed 4SLB stationary RICE ≥ 250 HP located at major sources; and new or reconstructed CI stationary RICE >500 HP located at major sources. Reduce CO emissions and not using a CEMS Conduct subsequent performance tests semiannually 1

.

2. 4SRB stationary RICE ≥ 5,000 HP located at major sources. Reduce formaldehyde emissions Conduct subsequent performance tests semiannually 1

. 3. Stationary RICE >500 HP located at major sources and new or reconstructed 4SLB stationary RICE 250 ≤ HP ≤ 500 located at major sources. Limit the concentration of formaldehyde in the stationary RICE exhaust Conduct subsequent performance tests semiannually 1

.

4. Existing nonemergency, nonblack start CI stationary RICE >500 HP that are not limited use stationary RICE Limit or reduce CO emissions and not using a CEMS Conduct subsequent performance tests every 8,760 hrs or 3 years, whichever comes first.

5. Existing nonemergency, nonblack start CI stationary RICE >500 HP that are limited use stationary RICE Limit or reduce CO emissions and not using a CEMS Conduct subsequent performance tests every 8,760 hrs or 5 years, whichever comes first.

1 After you have demonstrated compliance for two consecutive tests, you may reduce the frequency of subsequent performance tests to annually. If the results of any subsequent annual performance test indicate the stationary RICE is not inPage 148 of 197

compliance with the CO or formaldehyde emission limitation, or you deviate from any of your operating limitations, you must resume semiannual performance tests. 27. Table 4 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 4 to Subpart ZZZZ of Part 63. Requirements for Performance Tests**  As stated in §§63.6610, 63.6611, 63.6612, 63.6620, and 63.6640, you must comply with the following requirements for performance tests for stationary RICE:

**For each...**  **Complying with the**  **requirement to...**  **You must...**  **Using... According to the**  **following requirements** 

**...** 1. 2SLB, 4SLB, and CI stationary RICE a. reduce CO emissions i. Measure the O 2 at the inlet and outlet of the control device; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522-00 (2005) a (incorpo rated by referenc e, see §63.14). (a) Measurements to determine O 2 must be made at the same time as the measurements for COconcentration.

ii. Measure the CO at the inlet and the outlet of the control device (1) ASTM D6522-00 (2005) a,b (incorpo ra-ted by referenc e, see §63.14) (a) The COconcentration must be at 15 percent O 2 , dry basis.Page 149 of 197

or Method 10 of 40 CFR part 60, appendix A. 2. 4SRB stationary RICE a. reduce formaldehyd e emissions i. Select the sampling port location and the number of traverse points; and (1) Method 1 or 1A of 40 CFR part 60, appendix A §63.7(d) (1)(i) (a) sampling sites must be located at the inlet and outlet of the control device.

ii. Measure O 2 at the inlet and outlet of the control device; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00(2005)

. (a) measurements to determine O 2 concentratio n must be made at the same time as the measurements for formaldehyde or THC concentratio n.Page 150 of 197

iii. Measure moisture content at the inlet and outlet of the control device; and (1) Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D 6348-03 (a) measurements to determine moisture content must be made at the same time and location as the measurements for formaldehyde or THC concentratio n. iv. If demonstra ting complianc e with the formaldeh yde percent reduction requireme nt, measureformaldehyde at the inlet and the outlet of the control device (1) Method 320 or 323 of 40 CFR part 63, appendix A; or ASTM D6348- 03 c , provided in ASTM D6348-03 Annex A5 (Analyte Spiking Techniqu e), the percent R must be greater than or equal to 70 and less than or equal to 130. (a) formaldehydeconcentration must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.Page 151 of 197

iv. If demonstra ting complianc e with the THC percent reduction requireme nt, measure THC at the inlet and the outlet of the control device (1) Method 25A of 40 CFR part 60, appendix A (a) THCconcentration must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

3. Stationary RICE a. limit theconcentration offormaldehyde or CO in the stationary RICE exhaust i. Select the sampling port location and the number of traverse points; and (1) Method 1 or 1A of 40 CFR part 60, appendix A §63.7(d) (1)(i) (a) if using a control device, the sampling site must be located at the outlet of the control device. ii. Determine the O 2 concentra tion of the stationar y RICE exhaust at the sampling port location; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00(2005)

. (a) measurements to determine O 2 concentration must be made at the same time and location as the measurements for formaldehyde or COconcentration. iii. Measure moisture (1) Method 4 of 40 (a) measurements to determinePage 152 of 197

content of thestationary RICE exhaust at the sampling port location; and CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D 6348-03 moisture content must be made at the same time and location as the measurements for formaldehyde or CO concentratio n. iv. Measureformaldehyde at the exhaust of thestationary RICE; or (1) Method 320 or 323 of 40 CFR part 63, appendix A; or ASTM D6348- 03 c , provided in ASTM D6348-03 Annex A5 (Analyte Spiking Techniqu e), the percent R must be greater than or equal to 70 and less than or equal to 130. (a) Formaldehyde concentratio n must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

v. measure CO at the exhaust (1) Method 10 of 40 CFR part (a) CO concentratio n must be at 15 percentPage 153 of 197

of thestationary RICE. 60, appendix A, ASTM Method D6522-00 (2005) a , Method 320 of 40 CFR part 63, appendix A, or ASTM D6348- 03. O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

a You may obtain a copy of ASTM-D6522-00 (2005) from at least one of the following addresses: American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428- 2959, or University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. ASTM-D6522-00 (2005) may be used to test both CI and SI stationary RICE. b You may also use Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03.

c You may obtain a copy of ASTM-D6348-03 from at least one of the following addresses: American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428-2959, or University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. 28. Table 5 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 5 to Subpart ZZZZ of Part 63. Initial Compliance with Emission Limitations and Operating Limitations**  As stated in §§63.6612, 63.6625 and 63.6630, you must initially comply with the emission and operating limitations as required by the following:

**For each . . . Complying with the**  **requirement to . . .**  **You have demonstrated**  **initial compliance if . . .** Page 154 of 197

1. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions and using oxidation catalyst, and using a CPMS i. The average reduction of emissions of CO determined from the initial performance test achieves the required CO percent reduction; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test.Page 155 of 197

2. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, using oxidation catalyst, and using a CPMS i. The average CO concentration determined from the initial performance test is less than or equal to the CO emission limitation; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial p erformance test. 3. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions and not using oxidation catalyst i. The average reduction of emissions of CO determined from the initial performance test achieves the required CO percent reduction; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded thePage 156 of 197

approved operating parameters (if any) during the initial performance test. 4. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, and not using oxidation catalyst i. The average CO concentration determined from the initial performance test is less than or equal to the CO emission limitation; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test.Page 157 of 197

5. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions, and using a CEMS i. You have installed a CEMS to continuously monitor CO and either O 2 or CO 2 at both the inlet and outlet of the oxidation catalyst according to the requirements in §63.6625(a); and

ii. You have conducted a performance evaluation of your CEMS using PS 3 and 4A of 40 CFR part 60, appendix B; and iii. The average reduction of CO calculated using §63.6620 equals or exceeds the required percent reduction. The initial test comprises the first 4-hour period after successful validation of the CEMS. Compliance is based on the average percent reduction achieved during the 4-hour period.Page 158 of 197

6. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, and using a CEMS i. You have installed a CEMS to continuously monitor CO and either O 2 or CO 2 at the outlet of the oxidation catalyst according to the requirements in §63.6625(a); and

ii. You have conducted a performance evaluation of your CEMS using PS 3 and 4A of 40 CFR part 60, appendix B; and iii. The average concentration of CO calculated using §63.6620 is less than or equal to the CO emission limitation. The initial test comprises the first 4-hour period after successful validation of the CEMS. Compliance is based on the average concentration measured during the 4-hour period. 7. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and u sing NSCR i. The average reduction of emissions of formaldehyde determined from the initial performance test is equal to or greater than the required formaldehydePage 159 of 197

percent reduction, or the average reduction of emissions of THC determined from the initial performance test is equal to or greater than 30 percent; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test. 8. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and not using NSCR i. The average reduction of emissions of formaldehyde determined from the initial performance test is equal to or greater than the required formaldehyde percent reduction; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according toPage 160 of 197

the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test. 9. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Limit the concentration of formaldehyde i n the stationary RICE exhaust and using oxidation catalyst or NSCR i. The average formaldehyde concentration, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde emission limitation; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test. 10. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE a. Limit the concentration of formaldehyde in the stationary RICE exhaust and not using oxidation catalyst or NSCR i. The average formaldehyde concentration, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde e missionPage 161 of 197

250 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency 4SRB stationary RICE >500 HP located at a major source of HAP. limitation; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test.11. Existing nonemergency stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency stationary CI RICE 300<HP ≤ 500 located at an area source of HAP. a. Reduce CO emissions. i. The average reduction of emissions of CO or formaldehyde, as applicable determined from the initial performance test is equal to or greater than the required CO or formaldehyde, as applicable, percent reduction.12. Existing nonemergency stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency stationary CI RICE 300<HP ≤ 500 located at an area source of HAP. a. Limit the concentration of formaldehyde or CO in the stationary RICE exhaust. i. The average formaldehyde or CO concentration, as applicable, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde or CO emission limitation, as applicable.13. Existing nonemergency 4SLB a. Install an oxidation catalyst i. You have conducted anPage 162 of 197

stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year initial compliance demonstration as specified in §63.6630(e) to show that the average reduction of emissions of CO is 93 percent or more, or the average CO concentration is less than or equal to 47 ppmvd at 15 percent O 2 ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b), or you have installed equipment to automatically shut down the engine if the catalyst inlet temperature exceeds 1350°F.14. Existing nonemergency 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install NSCR i. You have conducted an initial compliance demonstration as specified in §63.6630(e) to show that the average reduction of emissions of CO is 75 percent or more, or the average reduction of emissions of THC is 30 percent or more ii. You have installed a CPMS to continuously monitor catalystPage 163 of 197

inlet temperature according to the requirements in §63.6625(b), or you have installed equipment to automatically shut down the engine if the catalyst inlet temperature exceeds 1250°F.

29. Table 6 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 6 to Subpart ZZZZ of Part 63. Continuous Compliance with Emission Limitations, Operating Limitations, Work Practices, and**  **Management Practices** As stated in §63.6640, you must continuously comply with the emissions and operating limitations and work or management practices as required by the following:

**For each . . . Complying with the**  **requirement to . .**

**. You must**  **demonstrate continuous**  **compliance by**

**. . .** 1. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, and new orreconstructed nonemergency CI a. Reduce CO emissions and using an oxidation catalyst, and using a CPMS i. Conducting semiannual performance tests for CO to demonstrate that the required CO percent reduction is achieved a ; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 164 of 197

stationary RICE >500 HP located at a major source of HAP. i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 2. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, and new orreconstructed nonemergency CI stationary RICE >500 HP located at a major source of HAP. a. Reduce CO emissions and not using an oxidation catalyst, and using a CPMS i. Conducting semiannual performance tests for CO to demonstrate that the required CO percent reduction is achieved a ; and ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining thePage 165 of 197

4-hour rolling a verages within the operating l imitations for the operating parameters established during the performance test. 3. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, new orreconstructed nonemergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and using a CEMS i. Collecting the monitoring data according to §63.6625(a), reducing the measurements to 1- hour averages, calculating the percent reduction or concen t ration of CO emissions according to §63.6620; and ii. Demonstrating that the catalyst achieves the required percent reduction of CO emissions over the 4-hour averaging p eriod, or that the emission remain at or below the CO concentration limit; and iii. Conducting an a nnual RATA of your C EMS using PS 3 and 4A of 40 CFR part 60, appendix B, as well as daily and periodic data quality checks in accordance with 40 CFR part 60, appendix F,Page 166 of 197

procedure 1. 4. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and using NSCR i. Collecting the catalyst inlet temperature data according to §63.6625(b); and ii. reducing these data to 4-hour rolling averages; and iii. Maintaining the 4-hour rolling averag e s within the operating l imitations for the catalyst inlet temperature; and iv. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 5. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and not using NSCR i. Collecting the approved operating parameter (if any) data according to §63.6625(b); and ii. Reducing these data to 4-hour rolling averages; and iii. Maintaining the 4-hour rolling a verages within thePage 167 of 197

operating l imitations for the operating parameters established during the performance test. 6. Non-emergency 4SRB stationary RICE with a brake HP ≥ 5,000 located at a major source of HAP. a. Reduce formaldehyde emissions Conducting semiannual performance tests f or formaldehyde to demonstrate that the required formaldehyde percent reduction is achieved, or to demonstrate that the average reduction of emissions of THC d etermined from the p erformance test is e qual to or greater than 30 percent. a 7. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP and new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP. a. Limit the concentration of formaldehyde i n the stationary RICE exhaust and using oxidation catalyst or NSCR i. Conducting semiannual performance tests f or formaldehyde to demonstrate that your emissions remain at or below the formaldehyde concentration limit a ; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining thePage 168 of 197

4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 8. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP and new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP. a. Limit the concentration of formaldehyde in the stationary RICE exhaust and not using oxidation catalyst or NSCR i. Conducting semiannual performance tests f or formaldehyde to demonstrate that your emissions remain at or below the formaldehyde concentration limit a ; and ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for thePage 169 of 197

operating parameters established during the performance test. 9. Existing emergency and black start stationary RICE ≤ 500 HP located at a major source ofHAP, existing nonemergency stationary RICE <100 HP located at a major source of HAP, existing emergency and black start stationary RICE located at an area source of HAP,existing nonemergency stationary CI RICE ≤ 300 HP located at an area source ofHAP, existing nonemergency 2SLB stationary RICE located at an area source of HAP,existing nonemergency stationary SI RICE located at an area source of HAP which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis, existing non-emergency 4SLB and 4SRB a. Work or Management practices. i. Operating and maintaining the stationary RICE according to the manufacturer’s emission-related operation and maintenance instructions; or ii. Develop and follow your own maintenance plan which must provide to the extent p racticable for the maintenance and operation of the engine in a manner consistent with good air pollution control practice for minimizing emissions.Page 170 of 197

stationary RICE ≤ 500 HP located at an area source ofHAP, existing nonemergency 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that operate 24 hours or less per calendar year, andexisting nonemergency 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that are remote stationary RICE. 10. Existing stationary CI RICE >500 HP that are not limited use stationary RICE. a. Reduce CO emissions, or l i mit the concentration of CO in the stationary RICE exhaust, and using oxidation catalyst i. Conducting performance tests every 8,760 hours or 3 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 171 of 197

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 11. Existing stationary CI RICE >500 HP that are not limited use stationary RICE. a. Reduce CO emissions, or l i mit the concentration of CO in the stationary RICE exhaust, and not using oxidation catalyst i. Conducting performance tests every 8,760 hours or 3 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; andPage 172 of 197

ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the operating parameters established during the performance test. 12. Existing limited use CI stationary RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and using an oxidation catalyst i. Conducting performance tests every 8,760 hours or 5 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 173 of 197

i ii. Reducing these data to 4-hour rolling averages; and iv. Maintaining th e 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 13. Existing limited use CI stationary RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and not using an oxidation catalyst i. Conducting performance tests every 8,760 hours or 5 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; andPage 174 of 197

ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating limita t ions for the operating parameters established during the performance test.14. Existing nonemergency 4SLB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install an oxidation catalyst i. Conducting annual compliance demonstrations as specified in §63. 6 640(c) to show that the average reduction of emissions of CO is 9 3 percent or more, or the average CO concentration is less than or equal to 47 ppmvd at 15 percent O 2 ; and either ii. Collecting the catalyst inlet temperature data according to §63.6625(b), r educing these data to 4-hour rolling averages; and maintaining the 4- hour rollingPage 175 of 197

a verages within the operating l imitations for the catalyst inlet temperature; or iii. Immediately shutting down the engine if the catalyst inlet t emperature exceeds 1350° F.15. Existing nonemergency 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install NSCR i. Conducting annual compliance demonstrations as specified in §63. 6 640(c) to show that the average reduction of emissions of CO is 75 p ercent or more, or the average reduction of e missions of THC is 30 percent or more ; and either ii. Collecting the catalyst inlet temperature data according to §63.6625(b), r educing these data to 4-hour rolling averages; and maintaining the 4- hour rolling a verages within the operating l imitations for the catalyst inlet temperature; or iii. Immediately shutting down the engine if the catalyst inlet t emperature exceeds 1250° F.Page 176 of 197

a After you have demonstrated compliance for two consecutive tests, you may reduce the frequency of subsequent performance tests to annually. If the results of any subsequent annual performance test indicate the stationary RICE is not in compliance with the CO or formaldehyde emission limitation, or you deviate from any of your operating limitations, you must resume semiannual performance tests. 30. Table 7 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 7 to Subpart ZZZZ of Part 63. Requirements for Reports** As stated in §63.6650, you must comply with the following requirements for reports:

**For each . .**

**. You must**  **submit a . .**

**. The report must**  **contain . . . You must submit**  **the report . . .** 1. Existingnonemergency, non-black start stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP;existing nonemergency, non-black start stationary CI RICE >500 HP located at a major source of HAP;existing nonemergency 4SRB stationary RICE >500 HP located at a Compliance report a. If there are no deviations from any emission limitations or operating limitations that apply to you, a statement that there were no deviations from the emission limitations or operating limitations during the reporting period. If there were no periods during which the CMS, including CEMS and CPMS,was out-ofcontrol, as specified in §63.8(c)(7), a i. Semiannually according to the requirements in §63.6650(b)(1)- (5) for engines that are not limited use stationary RICE subject to numerical emission limitations; and ii. Annually according to the requirements in §63.6650(b)(6)- (9) for engines that are limited use stationary RICE subject to numerical emission limitations.Page 177 of 197

major source of HAP;existing nonemergency, non-black start stationary CI RICE >300 HP located at an area source of HAP; new or reconstructed non-emergency stationary RICE >500 HP located at a major source of HAP; and new or reconstructed non-emergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP statement that there were not periods during which the CMSwas out-ofcontrol during the reporting period; or b. If you had a deviation from any emission limitation or operating limitation during the reporting period, the information in §63.6650(d). If there were periods during which the CMS, including CEMS and CPMS, was out-of-control, as specified in §63.8(c)(7), the information in §63.6650(e); or i. Semiannually according to the requirements in §63.6650(b).

c. If you had a malfunction during the reporting period, the information in §63.6650(c)(4). i. Semiannually according to the requirements in §63.6650(b).

2. New or reconstructed non-emergency stationary RICE that combusts landfill gas or digester gas equivalent to Report a. The fuel flow rate of each fuel and the heating values that were used in your calculations, and you must demonstrate that the percentage i. Annually, according to the requirements in §63.6650.Page 178 of 197

10 percent or more of the gross heat input on an annual basis of heat input provided by landfill gas or digester gas, is equivalent to 10 percent or more of the gross heat input on an annual basis; and b. The operating limits provided in your federally enforceable permit, and any deviations from these limits; and i. See item 2.a.i.

c. Any problems or errors suspected with the meters. i. See item 2.a.i.

3. Existingnonemergency, non-black start 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that operate more than 24 hours per calendar year Compliance report a. The results of the annual compliance demonstration, if conducted during the reporting period. i. Semiannually according to the requirements in §63.6650(b)(1)- (5)

31. Appendix A to Subpart ZZZZ of Part 63 is added to read

as follows:Page 179 of 197

**Appendix A Protocol for Using an Electrochemical Analyzer to Determine**  **Oxygen and Carbon Monoxide Concentrations from Certain Engines**

1.0 Scope and Application. What is this Protocol? This protocol is a procedure for using portable electrochemical (EC) cells for measuring carbon monoxide (CO) and oxygen (O 2 )

concentrations in controlled and uncontrolled emissions from existing stationary 4-stroke lean burn and 4-stroke rich burn reciprocating internal combustion engines as specified in the applicable rule. 1.1 Analytes. What does this protocol determine? This protocol measures the engine exhaust gas concentrations of carbon monoxide (CO) and oxygen (O 2 ). **Analyte CAS No.**  **S ensitivity**  Carbon monoxide (CO) 630-08-0 Minimum detectable limit should be 2

percent of the nominal range or 1 ppm, whichever is less restrictive. Oxygen (O 2 ) 7782-44-7

1.2 Applicability. When is this protocol acceptable? This protocol is applicable to 40 CFR part 63, subpart ZZZZ. Because of inherent cross sensitivities of EC cells, you must not apply this protocol to other emissions sources without specific instruction to that effect. 1.3 Data Quality Objectives. How good must my collected data be?Page 180 of 197

Refer to Section 13 to verify and document acceptable analyzer performance. 1.4 Range. What is the targeted analytical range for this protocol? The measurement system and EC cell design(s) conforming to this protocol will determine the analytical range for each gas component. The nominal ranges are defined by choosing up-scale calibration gas concentrations near the maximum anticipated flue gas concentrations for CO and O 2 , or no more than twice the permitted CO level. 1.5 Sensitivity. What minimum detectable limit will this protocol yield for a particular gas component? The minimum detectable limit depends on the nominal range and resolution of the specific EC cell used, and the signal to noise ratio of the measurement system. The minimum detectable limit should be 2 percent of the nominal range or 1 ppm, whichever is

less restrictive. 2.0 Summary of Protocol In this protocol, a gas sample is extracted from an engine exhaust system and then conveyed to a portable EC analyzer for

measurement of CO and O 2 gas concentrations. This method provides measurement system performance specifications and sampling protocols to ensure reliable data. You may use additions to, or modifications of vendor supplied measurement systems (e.g.,Page 181 of 197

heated or unheated sample lines, thermocouples, flow meters, selective gas scrubbers, etc.) to meet the design specifications of this protocol. Do not make changes to the measurement system from the as-verified configuration (Section 3.12).

3.0 Definitions

3.1 Measurement System . The total equipment required for the

measurement of CO and O 2 concentrations. The measurement system consists of the following major subsystems:

3.1.1 Data Recorder . A strip chart recorder, computer or digital recorder for logging measurement data from the analyzer output. You may record measurement data from the digital data display manually or electronically. 3.1.2 Electrochemical (EC) Cell . A device, similar to a fuel cell, used to sense the presence of a specific analyte and generate an electrical current output proportional to the analyte concentration.

3.1.3 Interference Gas Scrubber . A device used to remove or neutralize chemical compounds that may interfere with the selective operation of an EC cell. 3.1.4 Moisture Removal System . Any device used to reduce the concentration of moisture in the sample stream so as to protect the EC cells from the damaging effects of condensation and to minimize errors in measurements caused by the scrubbing of soluble gases.Page 182 of 197

3.1.5 Sample Interface . The portion of the system used for one or more of the following: sample acquisition; sample transport; sample conditioning or protection of the EC cell from any degrading effects of the engine exhaust effluent; removal of particulate matter and condensed moisture. 3.2 Nominal Range . The range of analyte concentrations over which each EC cell is operated (normally 25 percent to 150 percent of up-scale calibration gas value). Several nominal ranges can be used for any given cell so long as the calibration and repeatability checks for that range remain within specifications.

3.3 Calibration Gas . A vendor certified concentration of a specific analyte in an appropriate balance gas.

3.4 Zero Calibration Error . The analyte concentration output exhibited by the EC cell in response to zero-level calibration

gas. 3.5 Up-Scale Calibration Error . The mean of the difference between the analyte concentration exhibited by the EC cell and the certified concentration of the up-scale calibration gas.

3.6 Interference Check . A procedure for quantifying analytical interference from components in the engine exhaust gas other than the targeted analytes. 3.7 Repeatability Check . A protocol for demonstrating that an EC cell operated over a given nominal analyte concentration rangePage 183 of 197

provides a stable and consistent response and is not significantly affected by repeated exposure to that gas. 3.8 Sample Flow Rate . The flow rate of the gas sample as it passes through the EC cell. In some situations, EC cells can experience drift with changes in flow rate. The flow rate must be monitored and documented during all phases of a sampling run. 3.9 Sampling Run . A timed three-phase event whereby an EC cell’s response rises and plateaus in a sample conditioning phase, remains relatively constant during a measurement data phase, then declines during a refresh phase. The sample conditioning phase exposes the EC cell to the gas sample for a length of time sufficient to reach a constant response. The measurement data phase is the time interval during which gas sample measurements can be made that meet the acceptance criteria of this protocol. The refresh phase then purges the EC cells with CO-free air. The refresh phase replenishes requisite O 2 and moisture in the electrolyte reserve and provides a mechanism to de-gas or desorb any interference gas scrubbers or filters so as to enable a stable CO EC cell response. There are four primary types of sampling runs: pre- sampling calibrations; stack gas sampling; post-sampling calibration checks; and measurement system repeatability checks. Stack gas sampling runs can be chained together for extended evaluations, providing all other procedural specifications are met.Page 184 of 197

3.10 Sampling Day . A time not to exceed twelve hours from the time of the pre-sampling calibration to the post-sampling calibration check. During this time, stack gas sampling runs can be repeated without repeated recalibrations, providing all other sampling specifications have been met. 3.11 Pre-Sampling Calibration/Post-Sampling Calibration Check. The protocols executed at the beginning and end of each sampling day to bracket measurement readings with controlled performance

checks. 3.12 Performance-Established Configuration . The EC cell and sampling system configuration that existed at the time that it initially met the performance requirements of this protocol.

4.0 Interferences. When present in sufficient concentrations, NO and NO 2 are two gas species that have been reported to interfere with CO

concentration measurements. In the likelihood of this occurrence, it is the protocol user’s responsibility to employ and properly maintain an appropriate CO EC cell filter or scrubber for removal of these gases, as described in Section

6.2.12. 5.0 Safety. [Reserved] 6.0 Equipment and Supplies. 6.1 What equipment do I need for the measurement system?Page 185 of 197

The system must maintain the gas sample at conditions that will prevent moisture condensation in the sample transport lines, both before and as the sample gas contacts the EC cells. The essential components of the measurement system are described

below. 6.2 Measurement System Components. 6.2.1 Sample Probe . A single extraction-point probe constructed of glass, stainless steel or other non-reactive material, and of length sufficient to reach any designated sampling point. The sample probe must be designed to prevent plugging due to condensation or particulate matter. 6.2.2 Sample Line . Non-reactive tubing to transport the effluent from the sample probe to the EC cell. 6.2.3 Calibration Assembly (optional) . A three-way valve assembly or equivalent to introduce calibration gases at ambient pressure at the exit end of the sample probe during calibration checks. The assembly must be designed such that only stack gas or calibration gas flows in the sample line and all gases flow through any gas path filters. 6.2.4 Particulate Filter (optional) . Filters before the inlet of the EC cell to prevent accumulation of particulate material in the measurement system and extend the useful life of the components. All filters must be fabricated of materials that are non-reactive to the gas mixtures being sampled.Page 186 of 197

6.2.5 Sample Pump . A leak-free pump to provide undiluted sample gas to the system at a flow rate sufficient to minimize the response time of the measurement system. If located upstream of the EC cells, the pump must be constructed of a material that is non-reactive to the gas mixtures being sampled. 6.2.8 Sample Flow Rate Monitoring . An adjustable rotameter or equivalent device used to adjust and maintain the sample flow rate through the analyzer as prescribed. 6.2.9 Sample Gas Manifold (optional) . A manifold to divert a portion of the sample gas stream to the analyzer and the remainder to a by-pass discharge vent. The sample gas manifold may also include provisions for introducing calibration gases directly to the analyzer. The manifold must be constructed of a material that is non-reactive to the gas mixtures being sampled.

6.2.10 EC cell . A device containing one or more EC cells to

determine the CO and O 2 concentrations in the sample gas stream. The EC cell(s) must meet the applicable performance specifications of Section 13 of this protocol.

6.2.11 Data Recorder . A strip chart recorder, computer or digital recorder to make a record of analyzer output data. The data recorder resolution (i.e., readability) must be no greater than 1 ppm for CO; 0.1 percent for O 2 ; and one degree (either o C

or o F) for temperature. Alternatively, you may use a digital orPage 187 of 197

analog meter having the same resolution to observe and manually record the analyzer responses.

6.2.12 Interference Gas Filter or Scrubber . A device to remove interfering compounds upstream of the CO EC cell. Specificinterference gas filters or scrubbers used in the performanceestablished configuration of the analyzer must continue to be

used. Such a filter or scrubber must have a means to determine when the removal agent is exhausted. Periodically replace or replenish it in accordance with the manufacturer’s

recommendations. 6.2.13 EC Cell Temperature Device . A temperature measurement device (e.g., thermocouple, thermistor or equivalent) to monitor EC cell temperature. The temperature may be monitored within or at the surface of a cell, or in close proximity to the cells so as to indicate the operating temperature of the cells. Do not operate the analyzer outside the manufacturer’s recommended operating temperature range. 7.0 Reagents and Standards. What calibration gases are needed?

7.1 Calibration Gases . CO calibration gases for the EC cell must be CO in nitrogen or CO in a mixture of nitrogen and O 2. Use CO calibration gases with labeled concentration values certified by the manufacturer to be within ± 5 percent of the label value. Dry ambient air (20.9 percent O 2 ) is acceptable for calibrationPage 188 of 197

of the O 2 cell. If needed, any lower percentage O 2 calibration gas must be a mixture of O 2 in nitrogen.

7.1.1 Up-Scale CO Calibration Gas Concentration. Choose one or more up-scale gas concentrations such that the average of the stack gas measurements for each stack gas sampling run are between 25 and 150 percent of those concentrations. Alternatively, choose an up-scale gas that does not exceed twice the concentration of the applicable outletstandard. If a measured gas value exceeds 150 percent of the upscale CO calibration gas value at any time during the stack gas sampling run, the run must be discarded and repeated.

7.1.2 Up-Scale O 2 Calibration Gas Concentration.

Select an O 2 gas concentration such that the difference between the gas concentration and the average stack gas measurement or reading for each sample run is less than 15 percent O 2 . When the average exhaust gas O 2 readings are above 6 percent, you may use dry ambient air (20.9 percent O 2 ) for the up-scale O 2 calibration

gas.

7.1.3 Zero Gas . Use an inert gas that contains less than 0.25 percent of the up-scale CO calibration gas concentration. You may use dry air that is free from ambient CO and other combustion gas products (e.g., CO 2 ). 8.0 Sample Collection and Analysis 8.1 Selection of Sampling Sites

**.**Page 189 of 197

8.1.1 Control Device Inlet. Select a sampling site sufficiently downstream of the engine so that the combustion gases should be well mixed. Use a single sampling extraction point near the center of the duct (e.g., within the 10 percent centroidal area), unless instructed otherwise.

8.1.2 Exhaust Gas Outlet. Select a sampling site located at least two stack diameters downstream of any disturbance (e.g.,turbocharger exhaust, crossover junction or recirculation takeoff) and at least one-half stack diameter upstream of the gas discharge to the atmosphere. Use a single sampling extraction point near the center of the duct (e.g., within the 10 percent centroidal area), unless instructed otherwise. 8.2 Stack Gas Collection and Analysis

**.** Prior to the first stack gas sampling run, conduct that the pre-sampling calibration in accordance with Section 10.1. Use Figure 1 to record all data. Zero the analyzer with zero gas. Confirm and record that the scrubber media color is correct and not exhausted. Then position the probe at the sampling point and begin the sampling run at the same flow rate used during the up-scale calibration. Record the start time. Record all EC cell output responses, the EC cell temperature, and the flow rate during the “sample conditioning phase” once per minute until constant readings are obtained. Then begin the “measurement data phase” and record readings every 15 seconds for at least two minutes (or eight readings),Page 190 of 197

or as otherwise required to achieve two continuous minutes of data that meet the specification given in Section 13.1. Finally, perform the “refresh phase” by introducing dry air, free from CO and other combustion gases, until several minute-to-minute readings of consistent value have been obtained. For each run use the “measurement data phase” readings to calculate the average stack gas CO and O 2 concentrations. 8.3 EC Cell Temperature

**.** During each stack gas sampling run, measure and record the temperature of the EC cells. The temperature during each run must not vary more than ± 10°F. The overall EC cell temperature variation must be less than ± 20°F from the pre-sampling calibration to the final post-sampling

calibration check.

8.4 EC Cell Flow Rate. Maintain t he EC cell sample flow rate so that it does not vary by more than ± 10 percent throughout the pre-sampling calibration, stack gas sampling and post-sampling calibration check. Alternatively, the EC cell sample flow rate can be maintained within a tolerance range that does not affect the gas concentration readings by more than ± 3 percent, as instructed by the EC cell manufacturer. 9.0 Quality Control (Reserved)

10.0 Calibration and Standardization 10.1 Pre-Sampling Calibration

**.** Conduct the following protocol once for each nominal range to be used on each EC cell beforePage 191 of 197

performing a stack gas sampling run on each field sampling day. Repeat the calibration if you replace an EC cell before completing all of the sampling runs. There is no prescribed order for calibration of the EC cells; however, each cell must complete the measurement data phase during calibration. Assemble the measurement system by following the manufacturer's recommended protocols including for preparing and preconditioning the EC cell. Assure the measurement system has no leaks and verify the gas scrubbing agent is not depleted. Use Figure 1 to record all data.

10.1.1 Zero Calibration. For both the O 2 and CO cells, introduce zero gas to the measurement system (e.g., at the calibration assembly) and record the concentration reading every minute until readings are constant for at least two consecutive minutes. Include the time, EC cell temperature, and sample flow rate. Repeat the steps in this section at least once to verify the zero calibration for each component gas.

10.1.2 Zero Calibration Tolerance

**.** For each zero gas introduction, the zero level output must be less than or equal to ± 3 percent of the up-scale gas value or ± 1 ppm, whichever is less restrictive, for the CO channel and less than or equal to ± 0.3 percent O 2 for the O 2 channel. 10.1.3 Up-Scale Calibration. Individually introduce each calibration gas to the measurement system (e.g., at thePage 192 of 197

calibration assembly) and record the start time. Record all EC cell output responses, the EC cell temperature, and the flow rate during this “sample conditioning phase” once per minute until readings are constant for at least two minutes. Then begin the “measurement data phase” and record readings every 15 seconds for a total of two minutes, or as otherwise required. Finally, perform the “refresh phase” by introducing dry air, free from CO and other combustion gases, until readings are constant for at least two consecutive minutes. Then repeat the steps in this section at least once to verify the calibration for each component gas. Introduce all gases to flow through the entire sample handling system (i.e., at the exit end of the sampling probe or the calibration assembly). 10.1.4 Up-Scale Calibration Error

**.** The mean of the difference of the “measurement data phase” readings from the reported standard gas value must be less than or equal to ± 5 percent or ± 1 ppm for CO or ± 0.5 percent O 2 , whichever is less restrictive, respectively. The maximum allowable deviation from the mean measured value of any single "measurement data phase" reading must be less than or equal to ± 2 percent or ± 1 ppm for CO or ± 0.5 percent O 2 , whichever is less restrictive, respectively. 10.2 Post-Sampling Calibration Check . Conduct a stack gas postsampling calibration check after the stack gas sampling run or

set of runs and within 12 hours of the initial calibration.Page 193 of 197

Conduct up-scale and zero calibration checks using the protocol in Section 10.1. Make no changes to the sampling system or EC cell calibration until all post-sampling calibration checks have been recorded. If either the zero or up-scale calibration error exceeds the respective specification in Sections 10.1.2 and 10.1.4 then all measurement data collected since the previous

successful calibrations are invalid and re-calibration and resampling are required. If the sampling system is disassembled or the EC cell calibration is adjusted, repeat the calibration check before conducting the next analyzer sampling run. 11.0 Analytical Procedure The analytical procedure is fully discussed in Section 8. 12.0 Calculations and Data Analysis

Determine the CO and O 2 concentrations for each stack gas sampling run by calculating the mean gas concentrations of the data recorded during the “measurement data phase”.

13.0 Protocol Performance Use the following protocols to verify consistent analyzer performance during each field sampling day.

13.1 Measurement Data Phase Performance Check . Calculate the mean of the readings from the “measurement data phase”. The

maximum allowable deviation from the mean for each of the individual readings is ± 2 percent, or ± 1 ppm, whichever is

less restrictive. Record the mean value and maximum deviationPage 194 of 197

for each gas monitored. Data must conform to Section 10.1.4. The EC cell temperature and EC cell flow rate must conform to the specifications in Section 8.3 and 8.4 respectively. Example: A measurement data phase is invalid if the maximum deviation of any single reading comprising that mean is greater than ± 2 percent or ± 1 ppm (the default criteria). For example, if the mean = 30 ppm, single readings of below 29 ppm and above 31 ppm are disallowed).

13.2 Interference Check

**.** Before the initial use of the EC cell and interference gas scrubber in the field, and semi-annually thereafter, challenge the interference gas scrubber with an NO 2 gas standard that is generally recognized as representative of diesel-fueled engine NO 2 emission values. Record the response displayed by the CO EC cell and other pertinent data on Figure 1

or a similar form. 13.2.1 Interference Response

**.** The CO interference response should be less than or equal to ± 5 percent of the up-scale CO calibration gas concentration. 13.3 Repeatability Check

**.** Conduct the following check once for each nominal range that is to be used on the CO EC cell within five days prior to each field sampling program. If a field sampling program lasts longer than five days, repeat this check every five days. Immediately repeat the check if the EC cell is replaced or if the EC cell is exposed to gas concentrationsPage 195 of 197

greater than 150 percent of the highest up-scale gas

concentration. 13.3.1 Repeatability Check Procedure . Perform a complete EC cell sampling run (all three phases) by introducing the CO calibration gas to the measurement system and record the response. Follow Section 10.1.3. Use Figure 1 to record all data. Repeat the run three times for a total of four complete runs. During the four repeatability check runs, do not adjust the system except where necessary to achieve the correct calibration gas flow rate at the analyzer. 13.3.2 Repeatability Check Calculations

**.** Determine the highest and lowest average “measurement data phase” CO concentrations from the four repeatability check runs and record the results on Figure 1 or a similar form. The absolute value of the difference between the maximum and minimum average values recorded must not vary more than ± 3 percent or ± 1 ppm of the up-scale gas value,

whichever is less restrictive. 14.0 Pollution Prevention (Reserved) 15.0 Waste Management (Reserved) 16.0 Alternative Procedures (Reserved)

17.0 References (1) “Development of an Electrochemical Cell Emission Analyzer Test Protocol”, Topical Report, Phil Juneau, Emission Monitoring, Inc., July 1997.Page 196 of 197

(2) “Determination of Nitrogen Oxides, Carbon Monoxide, and Oxygen Emissions from Natural Gas-Fired Engines, Boilers, and Process Heaters Using Portable Analyzers”, EMC Conditional TestProtocol 30 (CTM-30), Gas Research Institute Protocol GRI96/0008, Revision 7, October 13, 1997. (3) "ICAC Test Protocol for Periodic Monitoring”, EMC Conditional Test Protocol 34 (CTM-034), The Institute of Clean Air Companies, September 8, 1999. (4) “Code of Federal Regulations”, Protection of Environment, 40 CFR, Part 60, Appendix A, Methods 1-4; 10.

Table 1: Appendix A - Sampling Run Data. Facility________________ Engine I.D.______________ Date_________ Run Type: (__) (__) (__) (__) (X) Pre-Sample Stack Gas Post-Sample Repeatability Calibration Sample Cal. Check Check Run # 1 1 2 2 3 3 4 4 T ime Scrub. OK FlowRate Gas 

## O 2 

## CO O 2 

## CO O 2 

## CO O 2 

## CO

Sample Cond. Phase “ “ “ “

Measurement Data Phase “Page 197 of 197

“ “ “ “ “ “ “ “ “

Mean

Refresh

Phase

“ “ “ “

## Subject: RICE -- Comments on CI RIA and Pipeline issue From: "Higgins, Cortney" <Cortney_Higgins@omb.eop.gov> To: Melanie King/RTP/USEPA/US@EPA, Larry Sorrels/RTP/USEPA/US@EPA Cc: RobertJ Wayland/RTP/USEPA/US@EPA, Fred Talcott/DC/USEPA/US@EPA Date: 05/17/2012 06:20 PM Subject: RE: RICE -- Comments on CI RIA and Pipeline issue

Hi Melanie, Below are additional comments received from the interagency reviewers on the rule: Brief Comment on Applicability of Remote Engine Provisions, Currently Proposed for SI Engines, for CI Engines in Proposed RICE Rule The latest RICE proposal exempts “remote” SI engines from the new regulations (SI = spark ignition, usually natural gas fired engines; “remote” means no more than 5 structures within 1⁄4 mile of an engine). Should CI engines also be exempted from the new regulations, if they meet the definition of “remote”? CI engines (usually diesel fired) emit considerably more particulates than would an engine fired with natural gas. Diesel emissions, from my published understanding of the science, are likely the most harmful of all PM2.5 species (see Grahame and Schlesinger, 2010, referenced below, for a 25 page review connecting in vitro toxicology, in vivo animal studies, population-based epidemiology and human panel studies of black carbon (BC)/vehicular emissions, with seven different cardiovascular endpoints). Nevertheless, there are good reasons to exempt CI engines which would meet the definition of “remote” from the proposed RICE regulations. It is therefore proposed that “remote” CI engines also be exempted, as are remote SI engines. The first, primary reason for exemption is that BC and other vehicular emissions emitted at ground level largely disperse within roughly 100 meters (much less than 1⁄4 mile) of where they are emitted. The second, related reason is that significant adverse health effects are found within 100 meters of a major road, compared to areas further away. About a dozen such health studies (“highway proximity” studies) are listed and discussed in the Grahame and Schlesinger (2010) reference. The third reason is that a single remote diesel engine would in virtually all cases emit less BC than would be emitted from trucks and some cars on a major road. Thus health effects, even within 100 meters of a remote engine, in addition to further from such an engine, would likely be less than observed in “highway proximity” studies. Below is an illustration (from Zhu et al., 2002) showing the rapid decline of BC and particle number from a major freeway, note that most of the decline of BC back to upwind levels occurs in the first 100 meters, and “normalcy” is almost achieved by 300 meters (under 1/5 of a mile). There is no physical reason I can think of why emissions released at ground level from a remote diesel engine would behave any differently than in the illustration.

References: Grahame TJ and Schlesinger RB. 2010. Cardiovascular health and particulate vehicular emissions: a critical evaluation of the evidence. Air Qual Atmos Health. 3:3–27 Study is available online here: http://www.biomedsearch.com/attachments/00/20/37/61/20376169/11869_2009_Article_47.pdf

## Zhu Y, Hinds WG, Kim S, Sioutas C. 2002. Concentration and size distribution of ultrafine particles near a major highway. J Air Waste Manage Assoc 52:1032–1042

From: Higgins, Cortney Sent: Wednesday, May 16, 2012 2:07 PM To: King.Melanie@epamail.epa.gov; Sorrels.Larry@epamail.epa.gov Cc: Bob Wayland (Wayland.Robertj@epamail.epa.gov); Talcott.Fred@epamail.epa.gov Subject: RICE -- Comments on CI RIA and Pipeline issue Hi Melanie and Larry, Below are additional comments on the CI RIA from interagency reviewers: - Table 3-23 on page 3-29 does not fit in that location, as it is a table related to hospitals in the section for irrigation and welding engines. Also, in the paragraph just following Table 3-27 on page 3-32, the acreages included by EPA represent all acreage (irrigated and non-irrigated) and should be noted as such. As it reads now, one could assume that this acreage represents irrigated acreage only. EPA’s statement in that paragraph that the use of on-farm irrigation pumps “...is tied to the amount of agricultural land in production” is also not entirely correct, as there is no set percentage of agricultural land in production that is annually under irrigation. Additionally, the use of engines (and size of engines) is also related to the source of water for irrigated lands. Larger engines will be needed for pumping groundwater from greater depths, whereas smaller electric pumps may be used more appropriately for nearby surface irrigation water. - The CI RICE RIA only shows 18 total irrigation engines >300 hp (see Table 4-5). These numbers appear to go all the way back to the original CI RICE analysis, which was prior to receiving the updated irrigation information from USDA that was used in the SI analysis. Although those numbers aren’t perfect either, that analysis indicated there were likely a little over 5200 CI irrigation engines >300 hp. We also know that the San Joaquin Valley has at least 426 engines in this category (17 Tier 3 with early adoption, 49 Tier 1, 306 Tier 2 – all of these are involved in the issues under consideration in this rule), so the national inventory should be higher. From this, we obviously already know that there are more than 18. - It looks to me like the numbers in the CI RIA weren’t updated after receiving the update information fromUSDA because the 2010 CI rule was already finalized and this is the first time since then that it has been reopened. We should really use the updated USDA-NASS information, realizing that most of the 5200 CI engines >300 hp are going to be at area sources and remote. That also obviously changes the cost/benefits for these engines, and puts a greater emphasis on extending the remoteness relief proposal to CI engines. We aren’t talking about 18 engines that would be affected anymore, we’re now talking about several thousand – many of which are likely on individual farms with individual farmers operating them. Melanie, on the pipeline issue, interrgency reviewers had the following comments: If EPA intends to keep the definition of a pipeline segment to mean only a natural gas pipeline, we agree that the change to the reg text in paragraph 3 of 63.6675 set forth below is needed. In addition, we suggest minor modifications be made to the preamble at pages 10-11 and 45 to clarify that the alternative of 5 buildings in 0.25 mile radius for non-pipeline engines will also be applied to engines along hazardous liquid pipelines. See attached. Thanks, Cortney

________________________________________________ Cortney Higgins, PhD Policy Analyst OMB/OIRA/NRE 202.395.7856 chiggins@omb.eop.gov

## Subject: RICE: Excerpt Pages 28-29

- Emergency Demand Response Engines (new language in bold italics)

From: "Higgins, Cortney" < Cortney_Higgins@omb.eop.gov > To: RobertJ Wayland/RTP/USEPA/US@EPA, Melanie King/RTP/USEPA/US@EPA Cc: Fred Talcott/DC/USEPA/US@EPA Date: 05/18/2012 01:33 PM Subject: RICE: Excerpt Pages 28-29 - Emergency Demand Response Engines (new language in bold italics)



### Hi Bob and Melanie, See the suggested edit below regarding the emergency demand response engines.

Thanks, Cortney 

## The circumstances during which the EPA would allow stationary emergency engines to operate for emergency demand response purposes include periods during which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency, plus during periods where there is a deviation of voltage or frequency of 5 percent or more below standard voltage or frequency. During EEA Level 2 alerts there is insufficient energy supply and a true potential for electrical blackouts. System operators must call on all available resources during EEA Level 2 alerts in order to stabilize the grid to prevent failure. Therefore, this situation is a good indicator of severe instability on the system. Consistent normal voltage provided by the utility is often called power quality and is an important factor in local electric system reliability. Reliability of the system requires electricity being provided at a normal expected voltage. The American National Standards Institute standard C84.1-1989 defines the maximum allowable voltage sag at below 5 percent. On the local distribution level local voltage levels are therefore important and a 5 percent or more change in the normal voltage or frequency is substantial and an indication that additional resources are needed to ensure local distribution system reliability. This situation would be indicative of severe instability on the system. **EPA has revised the language identifying the emergency conditions that currently appears at 60.421ll because**  **that language is not as specific as the newly proposed language. The agency**  **believes that the newly proposed language will address all emergency events, including all those that would be recognized solely by the local system**  **operators, such as local weather events and requests comments on the scope of the new language.** 

## From: "Higgins, Cortney" <Cortney_Higgins@omb.eop.gov> To: Melanie King/RTP/USEPA/US@EPA Cc: Fred Talcott/DC/USEPA/US@EPA, RobertJ Wayland/RTP/USEPA/US@EPA, Michael Horowitz/DC/USEPA/US@EPA, Larry Sorrels/RTP/USEPA/US@EPA, Amy Lamson/RTP/USEPA/US@EPA Date: 05/22/2012 11:19 AM Subject: RE: revised RICE preamble/reg

Hi Melanie, Attached is a redline with comments on the preamble. There was one further question on the San Joaquin Valley issue: It’s our understanding that the San Joaquin Rule 4702 Tier 4 standard requires 2.6 gm/bhp-hr CO or less for engines of 300 hp and greater. It’s our understanding that this is not directly comparable to the CO RICE standard – can you let us know if it is? If not, should EPA explain the local standard in the preamble, e.g. a conversion based on horsepower, and possibly a correction for O2 concentration? Can EPA indicate if the RICE rule would effectively replace the local rule, or whether compliance with two rules is still required? Thanks, Cortney From: Melanie King [mailto:King.Melanie@epamail.epa.gov] Sent: Monday, May 21, 2012 2:40 PM To: Higgins, Cortney Cc: Fred Talcott; RobertJ Wayland; Michael Horowitz; Larry Sorrels; Amy Lamson Subject: revised RICE preamble/reg Hi Cortney, We made additional revisions to the package in response to the interagency comments. Please see the attached redline/strikeout file which shows the changes we have made since the version I sent on Friday, May 11. (See attached file: RICE NESHAP Reconsideration Proposal 2060-AQ58 5-21-12 pm redline.docx) Melanie King Energy Strategies Group Sector Policies and Programs Division Office of Air Quality Planning and Standards U.S. Environmental Protection Agency Mail Code D243-01 RTP, NC 27711 Phone: (919) 541-2469 Fax: (919) 541-5450 king.melanie@epa.gov(See attached file: CFR-2009-title49-vol3-sec192-5.pdf)(See attached file: RICE NESHAP Reconsideration Proposal 2060-AQ58 5-21-12 pm_InteragencycommentsunderEO13563.docx)***E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

**E.O. 12866 NESHAP RICE; NSPS For Stationary Internal Combustion Engines 2060-AQ58 Proposal 20120521** 

6560-50-P

**ENVIRONMENTAL PROTECTION AGENCY**

**40 CFR Part 63 [EPA-HQ-OAR-2008-0708, FRL-XXXX-Y]**  **RIN 2060-AQ58**

**National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source**  **Performance Standards for Stationary Internal Combustion Engines**

**AGENCY:** Environmental Protection Agency (EPA).

**ACTION:** Proposed rule.

**SUMMARY:** The EPA is proposing amendments to the national emission standards for hazardous air pollutants for stationary reciprocating internal combustion engines under section 112 of the Clean Air Act. The proposed amendments include alternative testing options for certain large spark ignition (generally natural gas-fueled) stationary reciprocating internal combustion engines, management practices for a subset of existing spark ignition stationary reciprocating internal combustion engines in sparsely populated areas and alternative monitoring and compliance options for the same engines in populated areas. ThePage 2 of 201 EPA is also proposing to include a limited temporary allowance for existing stationary emergency area source engines to be used for peak shaving and non-emergency demand response. In addition, the EPA is proposing to increase the hours that stationary emergency engines may be used for emergency demand response. Theproposed amendments also correct minor mistakes in the preexisting regulations.

**DATES** : Comments . Comments must be received on or before [INSERT DATE 45 DAYS AFTER PUBLICATION IN THE FEDERAL REGISTER], or 30 days after date of public meeting if later. Public Meeting . If anyone contacts us requesting to speak at a public meeting by [INSERT DATE 7 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER], a public meeting will be held on [INSERT DATE 15 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. If you are interested in attending the public meeting, contact Ms. Pamela Garrett at (919) 541-7966 to verify that a meeting will be held.

**ADDRESSES** : Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2008-0708, by one of the following methods:

 www.regulations.gov: Follow the on-line instructions for submitting comments.

 Email: a-and-r-docket@epa.gov.

 Fax: (202) 566-1741.

 Mail: Air and Radiation Docket and Information Center,Page 3 of 201 Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW, Washington, DC 20460. Please include a total of two copies. The EPA requests a separate copy also be sent to the contact person identified below (see **FOR FURTHER INFORMATION CONTACT** ).

 Hand Delivery: Air and Radiation Docket and Information Center, U.S. EPA, Room B102, 1301 Constitution Avenue, NW, Washington, DC. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of

boxed information.

Instructions : Direct your comments to Docket ID No. EPA-HQ-OAR2008-0708. The EPA’s policy is that all comments received will be included in the public docket without change and may be made available on-line at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov website is an “anonymous access” system, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without goingPage 4 of 201 through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contactinformation in the body of your comment and with any disk or CDROM you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. Public Meeting : If a public meeting is held, it will be held at the EPA’s campus located at 109 T.W. Alexander Drive in Research Triangle Park, NC or an alternate site nearby.

Docket : All documents in the docket are listed in the www.regulations.gov index. The EPA also relies on documents inDocket ID Nos. EPA-HQ-OAR-2002-0059, EPA-HQ-OAR-2005-0029, EPAHQ-OAR-2005-0030, and EPA-HQ-OAR-2010-0295, and incorporated those dockets into the record for this action. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically inPage 5 of 201 www.regulations.gov or in hard copy at the Air and Radiation Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566- 1744, and the telephone number for the Air Docket is (202) 566-

1742.

**FOR FURTHER INFORMATION CONTACT:** Ms. Melanie King, Energy Strategies Group, Sector Policies and Programs Division (D243- 01), Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number (919) 541-2469; facsimile number (919) 541-5450; email address king.melanie@epa.gov.

**SUPPLEMENTARY INFORMATION** : Organization of This Document

. The following outline is provided to aid in locating information in the preamble.

I. General Information A. Executive Summary B. Does this action apply to me? C. What should I consider as I prepare my comments for the EPA? II. Summary of Proposed Amendments A. Total Hydrocarbon Compliance Demonstration Option B. Emergency Demand Response/Peak Shaving C. Non-Emergency Stationary SI RICE Greater than 500 HP Located at Area Sources D. Stationary Agricultural RICE in San Joaquin Valley E. Remote Areas of Alaska F. Miscellaneous Corrections and Revisions G. Compliance Date III. Summary of Environmental, Energy and Economic Impacts A. What are the air quality impacts? B. What are the cost impacts? C. What are the benefits?Page 6 of 201 D. What are the non-air health, environmental and energy impacts? IV. Solicitation of Public Comments and Participation V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act of 1995 E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks H. Executive Order 13211: Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations

**I. General Information** A. Executive Summary 1. Purpose of the Regulatory Action The purpose of this action is to propose amendments to the national emission standards for hazardous air pollutants (NESHAP) for stationary reciprocating internal combustion engines (RICE) under section 112 of the Clean Air Act (CAA). This proposal was developed to address certain issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments and other communications. This proposal also provides

clarifications and corrects minor mistakes in the current RICE NESHAP and revises the new source performance standards (NSPS)Page 7 of 201 for stationary engines, 40 CFR part 60, subparts IIII and JJJJ, for consistency with the RICE NESHAP. This action is conducted under the authority of section 112 of the CAA, “Hazardous Air Pollutants,” (HAP) which requires the

EPA to establish NESHAP for the control of hazardous air pollutants (HAP) from both new and existing sources in regulated source categories. 2. Summary of the Major Provisions of the Regulatory Action After promulgation of the 2010 RICE NESHAP amendments, the EPA received several petitions for reconsideration, legal challenges, and other communications raising issues of practical implementability, and certain factual information that had not been brought to the EPA’s attention during the rulemaking. The

EPA has considered this information and believes that amendments to the rule to address certain of these issues are appropriate. Therefore, the EPA is proposing to amend 40 CFR part 63, subpart ZZZZ, NESHAP for Stationary RICE. The current regulation applies to owners and operators of existing and new stationary RICE at major and area sources of HAP emissions. The applicability of the rule remains the same and is not changed by this proposal. The EPA is also proposing to amend the NSPS for stationary engines to conform with certain of the amendments proposed for

the NESHAP.Page 8 of 201 The EPA proposes to add an alternative compliance demonstration option for stationary 4-stroke rich burn (4SRB) spark ignition (SI) engines subject to a 76 percent or more formaldehyde reduction. Owners and operators of 4SRB engines would be permitted to demonstrate compliance with the 76 percent formaldehyde reduction emission standard by testing total hydrocarbon (THC) emissions and showing that the engine is achieving at least a 30 percent reduction of THC emissions. The alternative compliance option would provide a less expensive and less complex, but equally effective, method for demonstrating compliance than testing for formaldehyde. Certain stationary RICE are maintained in order to be able to respond to emergency power needs. The EPA proposes to allow owners and operators of such stationary emergency RICE to operate their engines as part of an emergency demand response program within the 100 hours per year that is already permitted for maintenance and testing of the engines. The 100 hours per year allowance would ensure that a sufficient number of hours are permitted for engines to meet independent system operator (ISO) and regional transmission organization (RTO) tariffs and other requirements for participating in various emergency demand response programs and would assist in stabilizing the grid, preventing electrical blackouts and supporting local electric system reliability. A temporary limited allowance that willPage 9 of 201 expire on April 16, 2017 (the date by which full compliance with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units (77 FR 9304) is expected), is being proposed for stationary emergency engines located at area sources of HAPemissions to be used for up to 50 hours per year for any nonemergency purpose, including peak shaving. The 50 hours is part of the 100 hours per year total allowance for all types of emergency engine operation (except during emergencies where no other power is available, which is not restricted by the rule). The temporary allowance for peak shaving would give sources time to address reliability issues and develop solutions to reliability issues while facilities are coming into compliance

with the National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units, which were promulgated on February 16, 2012 (77 FR 9304). The EPA proposes management practices for owners and operators of existing stationary 4-stroke SI engines above 500 horsepower (HP) that are area sources of HAP emissions and where the engines are remote from human activity. A remote area is defined as either a Department of Transportation (DOT) Class 1Page 10 of 201 pipeline location 1 , or, if the facility is not on a pipeline, if within a 0.25 mile radius of the facility there are 5 or less buildings intended for human occupancy. The 0.25 mile radius was

chosen as the area would be similar to the area used for the DOT pipeline Class location. The EPA proposes that these sources be subject to management practices rather than numeric emission limits and associated testing and monitoring. This would address reasonable concerns with accessibility, infrastructure, and staffing that stem from the remoteness of the engines and higher costs that would be associated with compliance with the existing requirements. The EPA proposes that existing stationary 4-stroke SI engines above 500 HP at area sources that are in populated areas (defined as DOT pipeline Class 2 through Class 4 areas, or if not on a pipeline, if within a 0.25 mile radius of the facility there are more than 5 buildings intended for human occupancy) be subject to an equipment standard that requires the installation of HAP-reducing aftertreatment. The EPA has the discretion to set an equipment standard as GACT for engines located at area sources of HAP. Sources would be required to test their engines to demonstrate compliance initially, perform catalyst activity check-ups, and either monitor the catalyst

1 A Class 1 location is defined as an offshore area or any class location unit that has 10 or fewer buildings intended for human occupancy.Page 11 of 201 inlet temperature continuously or employ high temperature shutdown devices to protect the catalyst. To address how certain existing compression ignition (CI) engines are currently regulated, the EPA proposes to specify that any existing certified CI engine above 300 HP at an area

source of HAP emissions that was certified to meet the Tier 3 engine standards and was installed before June 12, 2006, is in compliance with the NESHAP. This provision would create regulatory consistency between the same engines installed before and after June 12, 2006. Engines at area sources of HAP for which construction commenced before June 12, 2006, are considered existing engines under the NESHAP. The EPA is proposing amendments to the requirements for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are subject to state and locally enforceable requirements requiring replacement of the engine by June 1, 2018. This is meant to deal with a specific concern regarding the interaction of the NESHAP with certain rules for agricultural engines in the San Joaquin Valley in California. The EPA is proposing to allow these engines to meet management practices under the RICE NESHAP from the May 3, 2013 compliance date until January 1, 2015, or 12 years after installation date, but not later than June 1, 2018. This provision would deal with the issue of owners and operators having to install controls onPage 12 of 201 their engines in order to meet the RICE NESHAP, and then having to replace their engines shortly thereafter due to state and local rules specifying the replacement of engines. Owners and operators will have additional time to replace their engines without having to install controls, but will be required to use management practices during that period. The last major change the EPA proposes to make is to

broaden the definition of remote area sources of Alaska in the RICE NESHAP. Currently, remote areas are those that are not on the Federal Aid Highway System (FAHS). This change would permit existing stationary CI engines at other remote area sources in Alaska to meet management practices as opposed to emission standards likely necessitating aftertreatment. These remote areas have the same challenges as areas not on the FAHS, and complying with the current rule would similarly be prohibitively costly and potentially infeasible. In addition to area sources located in areas of Alaska that are not accessible by the FAHS being defined as remote and subject to management practices, the EPA also proposes that any stationary RICE in Alaska meeting all of the following conditions be subject to management practices: (1) The only connection to the FAHS is through the Alaska Marine Highway System (AMHS), or the stationary RICE operation is within an isolated grid in Alaska that is not connected toPage 13 of 201 the statewide electrical grid referred to as the Alaska Railbelt Grid, and (2) At least 10 percent of the power generated by the stationary RICE on an annual basis is used for residential purposes, and (3) The generating capacity of the area source is less than 12 megawatts, or the stationary RICE is used exclusively for backup power for renewable energy and is used less than 500 hrs per year on a 10 year rolling average.

3. Costs and Benefits These proposed amendments would reduce the capital and annual costs of the original 2010 amendments by $287 million and $139 million, respectively. The EPA estimates that with the proposed amendments, the capital cost of the rule is $840 million and the annual cost is $490 million ($2010). These proposed amendments would also result in decreases to the emissions reductions estimated in 2013 from the original

2010 RICE NESHAP amendments. The estimated reductions in 2013 from the 2010 RICE NESHAP rulemaking with these proposed amendments are 2,800 tons per year (tpy) of HAP, 36,000 tpy of carbon monoxide (CO), 2,800 tpy of particulate matter (PM), 9,600 tpy of nitrogen oxide (NOx), and 36,000 tpy of volatile organic compounds (VOC). The reductions that were estimated for the original 2010 RICE NESHAP amendments were 7,000 tpy of HAP,Page 14 of 201 124,000 tpy of CO, 2,800 tpy of PM, 96,000 tpy of NOx, and 58,000 tpy of VOC.

The EPA estimates the monetized co-benefits in 2013 of the original 2010 RICE NESHAP amendments with these proposed amendments incorporated to be $830 million to $2,100 million (2010 dollars) at a 3-percent discount rate and $740 million to $1,800 million (2010 dollars) at a 7-percent discount rate. The benefits that were estimated for the original 2010 RICE NESHAP amendments were $1,500 million to $3,600 million (2010 dollars) at a 3-percent discount rate and $1,300 million to $3,200 million (2010 dollars) at a 7-percent discount rate. B. Does this action apply to me? Regulated Entities . Categories and entities potentially regulated by this action include: Category NAICS 1 Examples of regulated entities Any industry using a stationary internal combustion engine as defined in the proposed amendments. 2211 Electric power generation, transmission, or distribution. 622110 Medical and surgical hospitals.

48621 Natural gas transmission.

211111 Crude petroleum and natural gas production. 211112 Natural gas liquids producers. 92811 National security.

1 North American Industry Classification System.

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated byPage 15 of 201 this action. To determine whether your engine is regulated by this action, you should examine the applicability criteria of this proposed rule. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding **FOR FURTHER INFORMATION CONTACT**

section. C. What should I consider as I prepare my comments for the EPA? 1. Submitting CBI . Do not submit this information to the EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to the EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the

comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI to only the following address: Ms. Melanie King, c/o OAQPS Document Control Officer (Room C404-02), U.S. EPA, Research Triangle Park, NC 27711, Attention Docket ID No. EPA-HQ-OAR-2008-0708.Page 16 of 201 2. Tips for Preparing Your Comments. When submitting comments,

remember to: (a) Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number). (b) Follow directions. The EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number. (c) Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. (d) Describe any assumptions and provide any technical information and/or data that you used. (e) If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. (f) Provide specific examples to illustrate your concerns, and suggest alternatives. (g) Explain your views as clearly as possible, avoiding the use of profanity or personal threats. (h) Make sure to submit your comments by the comment period

deadline identified.

Docket . The docket number for this proposed rule is Docket ID No. EPA-HQ-OAR-2008-0708.Page 17 of 201 World Wide Web (WWW) . In addition to being available in the docket, an electronic copy of this proposed rule will be posted on the WWW through the Technology Transfer Network Website (TTN Web). Following signature, the EPA will post a copy of this proposed rule on the TTN’s policy and guidance page for newly proposed or promulgated rules at http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. **II. Summary of Proposed Amendments** This action proposes amendments to the NESHAP for RICE in 40 CFR part 63, subpart ZZZZ. This action also proposes amendments to the NSPS for stationary engines in 40 CFR part 60, subparts IIII and JJJJ. The NESHAP for stationary RICE to regulate emissions of HAP was developed in several stages. The EPA initially addressed stationary RICE greater than 500 HP located at major sources of HAP emissions in 2004 (69 FR 33473). The EPA addressed new stationary RICE less than or equal to 500 HP located at major sources and new stationary RICE located at area sources in 2008 (73 FR 3568). Most recently, requirements for existing stationary RICE less than or equal to 500 HP located at major sources and existing stationary RICE located at area sources were finalized in 2010 (75 FR 9648 and 75 FR 51570).Page 18 of 201 The EPA is proposing to address a number of issues that have been raised by different stakeholders through lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP amendments, and other communications. The EPA is also proposing to revise 40 CFR part 60, subparts IIII and JJJJ for consistency

with the RICE NESHAP and to make minor corrections and clarifications. The following sections present the issues that the EPA is addressing in this action, background information as to why these issues are causing concern among affected stakeholders, and how the EPA proposes to resolve the issues.

A. Total Hydrocarbon Compliance Demonstration Option 1. Background Currently, SI 4SRB non-emergency engines greater than 500 HP located at major sources and existing SI 4SRB non-emergency engines greater than 500 HP located at area sources have the option of meeting either a formaldehyde percent reduction or a formaldehyde concentration standard. Formaldehyde was established in the original 2004 RICE NESHAP as an appropriate surrogate for HAP emissions from 4SRB engines based on industry test data available at that time. Based on testing of stationary lean burn engines conducted at Colorado State University (CSU), the EPA was able to establish CO as a surrogate for HAP for lean burn engines. Rich burn engines were not tested at CSU and the

data the EPA had available at the time that were used to set thePage 19 of 201 standards for rich burn engines did not support the same relationship between CO and HAP reductions for rich burn engines. Therefore, the EPA was unable to establish CO as a surrogate for HAP emissions for rich burn engines and the emission standard for rich burn engines was specified in terms of formaldehyde, the hazardous air pollutant emitted in the largest quantity from stationary engines. The EPA has previously acknowledged that it is significantly more expensive and difficult to test for formaldehyde than for CO, but has been unable in the past to support the same flexibility for rich burn engines as is currently in the rule for lean burn engines with the option to meet the standards in terms of either formaldehyde or CO. For these reasons, and expecting that new data for rich burn engines may become available in the future for the EPA to review and reassess possible surrogates for HAP, the EPA requested comment on this issue when proposing NESHAP for stationary existing engines less than or equal to 500 HP at major sources and all stationary existing engines at area sources in 2009 (74 FR 9698). Specifically, the EPA solicited comment on whether it would be appropriate to include an alternative standard in terms of VOC and asked that commenters submit data supporting the relationship between HAP and VOC. Comments the EPA received back on the proposed rule asked that the formaldehyde standards forPage 20 of 201 rich burn engines be replaced with emission standards for THC. The EPA determined at the time that it was not appropriate to adopt an alternative standard in terms of THC (or VOC) for rich burn engines and discussed the reasons why in the 2010 responses

to comments. 2 Compliance with the formaldehyde standard in the rule is, therefore, currently demonstrated by initial and continuous performance testing for formaldehyde. On October 19, 2010, engine manufacturer Dresser-Waukesha submitted a petition for reconsideration of the formaldehyde requirements. The EPA granted the petition for reconsideration on January 5, 2011. (In addition, on November 3, 2010, the Engine Manufacturers Association submitted a petition for judicial review of these requirements.) In the petition for reconsideration, Dresser-Waukesha argued that formaldehyde is difficult and costly to measure. The petition requested that the HAP surrogate for 4SRB engines should be THC rather than formaldehyde. Dresser-Waukesha submitted data from testing it conducted illustrating that THC reduction across the catalyst is

2 Memorandum from Melanie King, EPA Energy Strategies Group to EPA Docket EPA-HQ-OAR-2008-0708. Response to Public Comments on Proposed National Emission Standards for Hazardous Air Pollutants for Existing Stationary Reciprocating Internal Combustion Engines Located at Area Sources of Hazardous Air Pollutant Emissions or Have a Site Rating Less Than or Equal to 500 Brake HP Located at Major Sources of Hazardous Air Pollutant Emissions. August 10, 2010. EPA-HQ-OAR-2008-0708-0557.Page 21 of 201 an appropriate surrogate for HAP reduction across the catalyst. 3 According to the petitioner, testing for THC is easier and less costly and would substantially reduce the burden of the rule for owners and operators of these engines. Testing for formaldehyde emissions could cost more than double that of testing for THC

emissions and on a nationwide basis the EPA estimates that replacing formaldehyde testing with THC testing would result in substantial compliance cost savings annually while achieving the

same reduction in HAP emissions.The EPA has reviewed the data submitted by DresserWaukesha. The data provided indicate that a strong relationship exists between percentage reductions of THC and percentage reductions of formaldehyde (the surrogate for HAP emissions in the NESHAP) on rich burn engines using non-selective catalytic reduction (NSCR). Data analyzed by the EPA indicate that if the NSCR is reducing THC by at least 30 percent from 4SRB engines, formaldehyde emissions are guaranteed to be reduced by at least 76 percent, which is the percentage reduction required for the relevant engines. Indeed, the percentage reduction of formaldehyde is invariably well above the 76 percent level, and is usually above 90 percent. Therefore, the EPA agrees with the

3 Letter from Dresser-Waukesha to Melanie King. Follow-up toNovember 18, 2010 Teleconference. December 6, 2010. EPA-HQ-OAR2008-0708-0662.Page 22 of 201 petitioner that for SI 4SRB engines using NSCR and meeting the NESHAP by showing a percentage reduction of HAP, it would be appropriate to allow sources to demonstrate compliance with the NESHAP by showing a THC reduction of at least 30 percent. Including an optional THC compliance demonstration option would reduce the cost of compliance significantly while continuing to

achieve the same level of HAP emission reduction because the emission standards would remain the same. Consequently, the EPA is proposing amendments to allow owners and operators of certain stationary 4SRB engines (i.e., the ones currently subject to a formaldehyde percent reduction requirement) to show compliance with an optional THC compliance demonstration option. The specific amendments the EPA is proposing are presented below.

2. Proposed Amendments The EPA is proposing to add an alternative method of demonstrating compliance with the NESHAP for stationary 4SRB non-emergency engines greater than 500 HP that are located at major sources of HAP emissions and for existing stationary 4SRB non-emergency engines greater than 500 HP that are located at

area sources of HAP emissions that choose to meet the formaldehyde percent reduction requirement of 76 percent or

more. Based on the arguments and evidence presented in the petition discussed above, the EPA is proposing to add aPage 23 of 201 compliance demonstration option for stationary 4SRB engines meeting a 76 percent or more formaldehyde reduction. The compliance demonstration option would be an alternative to the existing method of demonstrating compliance with the formaldehyde percent reduction standard, which is to test engines for formaldehyde. The alternative for owners and operators of 4SRB engines meeting a 76 percent or more formaldehyde reduction would be to test their engines for THC showing that the engine is achieving at least a 30 percent

reduction of THC emissions. Under the proposed amendments, existing and new stationary 4SRB engines greater than 500 HP and located at major sources would still be required to reduce formaldehyde emissions by 76 percent or more or limit the concentration of formaldehyde in the stationary RICE exhaust to 350 parts per billion by volume, dry basis or less at 15 percent oxygen (O 2 ). However, owners and operators choosing to meet the formaldehyde concentration limit would not have the THC demonstration compliance option, because EPA could not verify a clear relationship between concentrations of THC and concentrations of formaldehyde in exhaust from these SI 4SRB engines. For the reasons discussed in section II.C.1 of this preamble, the EPA is proposing that existing stationary 4SRB non-emergency engines greater than 500 HP located at area sources located in populated areas be subject to an equipmentPage 24 of 201 standard and required to install a catalyst. These engines would be subject to testing to demonstrate initially and on an ongoing basis that the catalyst is reducing CO by 75 percent or more, or alternatively that THC emissions are being reduced by 30 percent

or more. Owners and operators of existing stationary 4SRB engines less than or equal to 500 HP who are required to limit the concentration of formaldehyde in the stationary RICE exhaust to 10.3 parts per million by volume, dry basis (ppmvd) or less at 15 percent O 2 do not have the option to demonstrate compliance using THC and must continue to demonstrate compliance by testing for formaldehyde following the methods and procedures specified

in the rule. Owners and operators opting to use the THC compliance demonstration method must demonstrate compliance by showing that the average reduction of THC is equal to or greater than 30 percent. Owners and operators of 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions and demonstrating compliance by using the THC compliance demonstration option must conduct performance testing using Method 25A of 40 CFR part 60, appendix A – Determination of Total Gaseous Organic Concentration Using a Flame Ionization Analyzer. Measurements of THC at the inlet and the outlet of the NSCR must be on a dry basis and corrected to 15 percent O 2 orPage 25 of 201 equivalent carbon dioxide content. To correct to 15 percent O 2 , dry basis, owners and operators must measure oxygen using Method 3, 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00 (2005) and measure moisture using Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03. Because owners and operators are complying with a percent reduction requirement, the method used must be suitable for the entire range of emissions since pre and post-catalyst emissions must be measured. Method 25A is capable of measuring emissions down to 5 ppmv and is, therefore, an appropriate method for measuring THC emissions for compliance demonstration purposes. The EPA is allowing sources the option to meet a minimum THC percent reduction of 30 percent by using Method 25A of 40 CFR part 60, appendix A to demonstrate compliance with the formaldehyde percent reduction in 40 CFR part 63, subpart ZZZZ. B. Emergency Demand Response/Peak Shaving 1. Background This action also proposes to amend provisions in the RICE NESHAP that currently allow owners and operators to operate stationary emergency engines for up to 15 hours per year as part of a demand response program if the RTO or equivalent balancing authority and transmission operator have determined there are emergency conditions that could lead to a potential electrical blackout, such as unusually low frequency, equipment overload,Page 26 of 201 capacity or energy deficiency, or unacceptable voltage level. The final rule did not allow emergency engines to be used for purposes of peak shaving or other non-emergency purposes as part of a financial arrangement. These provisions were included in the RICE NESHAP when requirements for existing stationary CI engines were finalized on March 3, 2010 (75 FR 9648). Following the completion of that portion of the rule, the EPA received three main petitions for reconsideration. One petition was from CPower, Inc., EnergyConnect, Inc., EnerNOC, Inc., and Innoventive Power, LLC. (EnerNOC et al.)(EPA-HQ-OAR-2008-0708- 0404). Another petition was received from the Delaware Department of Natural Resources and Environmental Control (DE DNREC) (EPA-HQ-OAR-2008-0708-0400). The third petition was from the National Rural Electric Cooperative Association (NRECA) (OAR-2008-0708-0580). In addition to these main petitions the

EPA received a substantial number of letters from others in the electric generation industry. The petition from EnerNOC, et al., asked that EPA increase the period of time permitted for emergency demand response operation in the rule to 60 hours per year, or the minimum number of hours required by the emergency demand response program. By contrast, the DE DNREC petition asked EPA to reconsider the emergency demand response provision because of

the adverse effects that it believes would result from increasedPage 27 of 201 emissions from these engines. The petition from NRECA requested that the EPA eliminate the restriction on the use of stationary emergency engines for demand response purposes. The EPA granted the petitions from EnerNOC, et al., DE DNREC and NRECA, and issued a notice on December 7, 2010 (75 FR 75937), requesting comments on whether to amend the 15 hours per year limitation on the operation of stationary emergency RICE participating in emergency demand response programs.

The EPA received more than 120 comments from a number of different entities including various state agencies, utilities, electric cooperatives and industry organizations. Many commenters expressed that 15 hours per year is not sufficient to meet current emergency demand response requirements for participation. For example, several emergency demand response programs have ISO tariff requirements greater than 15 hours per year, including the Electric Reliability Council of Texas emergency demand response program, which has a tariff requirement of 24 hours per year; the Pennsylvania Jersey Maryland (“PJM”) Interconnection, known as the Emergency Load Response Program, which has a tariff requirement of 60 hours per year; and the ISO New England (“ISO-NE”), which forecasts that backup resources would be expected for 55 hours over a 12-month period. Tariff requirements are developed to specify the mandatory time load resources (engines) must be willing and ablePage 28 of 201 to operate if the units are enrolled in the program. Conversely, some commenters urged the EPA to allow stationary emergency engines to only operate during true emergencies or when voltage or frequency varies beyond specified parameters. Based on the EPA’s review of the petitions and comments that the EPA has received, the EPA has found it appropriate to propose to amend the current rule to increase the allowance for stationary emergency engine participation in emergency demand response programs to up to 100 hours per year, which would be included as part of the pre-existing allowance of 100 hours for owners of emergency engines to test and maintain their emergency engines. The EPA believes that the emergency demand response programs that exist across the country are important programs that protect the reliability and stability of the national electric service grid. Allowing stationary emergency engines to operate as part of emergency demand response programs can help prevent grid failure or blackouts, by allowing these engines to be used in circumstances of grid instability prior to the occurrence of blackouts. Preventing stationary emergency engines from being able to qualify and participate in emergency demand response programs without having to apply aftertreatment could force owners and operators to leave their engines out of these programs, which will impair the ability of ISOs and RTOs to use these relatively small, quick-starting and reliable sources ofPage 29 of 201 energy to protect the reliability of their systems. The EPA does not wish to potentially jeopardize electrical reliability or create a disincentive for stationary emergency engines to participate in these programs. The circumstances during which the EPA would allow stationary emergency engines to operate for emergency demand response purposes include periods during which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency, plus during periods where there is a deviation of voltage or frequency of 5 percent or more below standard voltage or frequency. During EEA Level 2 alerts there is insufficient energy supply and a true potential for electrical blackouts. System operators must call on all available resources during EEA Level 2 alerts in order to stabilize the grid to prevent failure. Therefore, this situation is a good indicator of severe instability on the system. Consistent normal voltage provided by the utility is often called power quality and is an important factor in local electric system reliability. Reliability of the system requires electricity being provided at a normal expected voltage. The

American National Standards Institute standard C84.1-1989 defines the maximum allowable voltage sag at below 5 percent. OnPage 30 of 201 the local distribution level local voltage levels are therefore important and a 5 percent or more change in the normal voltage or frequency is substantial and an indication that additional resources are needed to ensure local distribution system reliability. This situation would be indicative of severe instability on the system. The EPA has revised the language identifying the emergency conditions that currently appears at 40 CFR 63.6640(f) because that language is not as specific as the newly proposed language. The EPA believes that the newly proposed language, along with the preexisting language in the definition of emergency engine describing non-demand response emergency situations, will address all emergency events, including all those that would be recognized solely by the local system operators, such as local weather events. The EPA requests comments on the scope of the new language. Emergency demand response programs rely on agreements under which owners of engine agree to make their engines available to be called upon for a specific number of hours per year, as required by the relevant ISO or RTO tariff, under specified circumstances considered to indicate emergencies. In order to be enrolled in an emergency demand response program, participants must qualify their engines and must be able to use their emergency engines for the number of hours the program requires. Engines are not generally called upon for the maximum hoursPage 31 of 201 required by the tariffs. However, even though the engine may not be called at all or may run for fewer hours than the program requires it to be available in a particular year, the engine

must still be available for those theoretical number of hours in order to join the program. Demand response contracts require more hours than the 15 hours per year that is currently in the regulations, and the commenters state that the 15 hours per year is not a sufficient amount of time to ensure the reliability of the program; some programs require up to 60 hours per year, as discussed earlier in this preamble. For these reasons, the EPA believes it is appropriate to allow additional hours for emergency demand response operation in order for such programs to be accessible to stationary emergency engines. Consequently, the EPA is proposing amendments to the rule to increase the limitation on emergency demand response operation to 100 hours per year for stationary emergency engines. It is expected that owners and operators of stationary emergency engines that seek to qualify their units as demand resources would with the proposed increase to 100 hours per year be able to meet the operational and qualification requirements of the different ISOs and RTOs in the country. As stated, stationary emergency engines that participate in demand response programs may not be called upon at all, but must nonetheless be available to operate for the required amountPage 32 of 201 stipulated by the specific program. The purpose of the limited allowance for emergency demand response is to respond to emergencies, and the EPA is persuaded by the information that has been submitted that 15 hours per year is an insufficient amount of time to allow for emergency demand response needs, given past experience. The EPA believes 100 hours per year is sufficient to cover any potential demand response operation as well as the required maintenance and testing that is also included within the 100 hours of operation. The EPA has previously determined that stationary emergency engines typically operate well below 50 hours per year and more commonly about 1 to 2 hours per month. A survey conducted by the California Air Resources Board (CARB) indicated the average yearly operation for emergency diesel engines was 31 hours over a period of 3 years. The majority of those hours were for the purpose of maintenance and testing; less than 5 hours was for interruptible service contracts, and the remaining amount for emergency/standby operation (EPA-HQ-OAR-2005-0029-0011). Data from demand response programs in ISO-NE and PJM territories show that backup generation was dispatched for less than 30 hours during the summers of 2008, 2009 and 2010. 4

4 Memorandum from Stacy Angel, Synapse Energy Economics, Inc. to Doug Hurley, Synapse Energy Economics. Sample Revenue for a 1 MW Backup Generation Unit. June 27, 2011.Page 33 of 201 However, again, emergency units must be available to operate more than that in most cases to qualify for demand response programs. For instance, PJM requires a minimum ISO tariff of 60 hours per year of engine availability for program participation. Consequently, in order to ensure that a sufficient amount of operating time is available for maintenance and readiness testing, and for demand response operation, the EPA is proposing 100 hours of operation. A number of commenters requested that an allowance of 100 hours per year be allowed in order to provide adequate hours consistent with minimum required hours that customers must be available to operate and to address local distribution system emergencies. For instance, in Hawaii, the emergency demand response program operated by the Hawaiian Electric Company requires that emergency engines be able to operate for 100 hours per year in the event of an emergency in order to participate in the program. In order to provide a

sufficient amount of time to cover annual maintenance and testing, which is typically more than 20 hours per year according to the survey conducted by CARB (see EPA-HQ-OAR-2005- 0029-0011), plus to cover hours necessary for qualifying for emergency demand response programs or local distribution system emergencies, EPA believes an allowance of 100 hours per year would be appropriate for these activities. Taking into account that there may be situations where annual maintenance andPage 34 of 201 testing could exceed the typical 1 to 2 hours per month and accounting for other emergency demand response programs that require more than 60 hours per year for program participation (e.g., the Hawaiian Electric Company), the EPA believes that 100 hours per year is appropriate for emergency demand response plus maintenance and testing. The proposed amendment to the rule would mean that stationary emergency engines could operate for a total of 100 hours per year for emergency demand response operation as part of the 100 hours already permitted for maintenance and readiness testing while maintaining their status as emergency units, rather than non-emergency units, and continue to meet the requirements that apply to emergency engines. On the issue of peak shaving and non-emergency demand response, the EPA is proposing to include a temporary limited allowance for peak shaving and other types of non-emergency use as part of a financial arrangement for existing stationary emergency engines at area sources of HAP, if the peak shaving is done as part of a peak shaving (or load management) program with the local distribution system operator. The power generated under this allowance can only be used at the facility or towards the local system. The EPA has determined that it is appropriate to include the option for existing stationary emergency engines at areaPage 35 of 201 sources to operate for a small number (50) of hours per year for any non-emergency reason and not be penalized or considered a non-emergency engine and subsequently required to install aftertreatment that could be prohibitively costly for these sources in the near term. The EPA is proposing that the 50-hour allowance for peak shaving for emergency engines at area sources be allowed for a limited period of time, but then removed after April 16, 2017. The peak shaving would also be limited to operation as part of a peak shaving (load management program) with the local distribution system operator. Owners would stillhave the pre-existing 50 hours per year allowance for nonemergency operation after April 16, 2017, but those 50 hours could no longer be used for peak shaving. The temporary allowance for peak shaving would give sources an additional resource for maintaining reliability while facilities are coming into compliance with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units (77 FR 9304). While the EPA does not expect the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units to cause regional reliability problems, this limited allowance would allow the owners and operators of these engines more flexibility to run reliability critical units in order to minimize potential grid-related interruptions as coal- and oil-fired baseload power plants may be temporarilyPage 36 of 201 shut down to install emission controls to comply with the NESHAP From Coal and Oil-Fired Electric Utility Steam Generating Units. Including this allowance is important for small electric cooperatives and other entities located at area sources that use these engines to maintain voltage and electric reliability. Many rural electric cooperatives enter agreements with owners of small emergency engines and rely on the engines to reduce demand on the central power supply during periods of high demand, which reduces the cost of power during periods of high demand for the members of the cooperative. Commenters promoting the continued use of peak shaving programs said that maintaining the cost of power as low as possible is important across the country, but is particularly of significant importance to rural electric cooperatives that, according to the commenter, service customers in the most economically depressed areas of the country, where options are the most limited. The commenters argued that if small emergency engines would no longer be permitted to operate for peak shaving purposes without having to be reclassified as non-emergency engines and subsequently subject to costly emissions controls, owners could no longer afford to participate in such programs. Cooperatives argued that this would lead to increased costs that would ultimately be passed along to the customers. Commenters also maintained that keeping peak shaving programs would not lead to additional public health risks orPage 37 of 201 emissions because the operation for peak shaving is minimal. If peak shaving is not allowed under the rule, commenters said that this would lead to an increase in central power station capacity and possibly more transmission and distribution line capacity to accommodate the increase in demand resulting from eliminating small emergency engines from being used. This could lead to a larger impact on the environment and public health than allowing a small number of hours for peak shaving purposes. Certain small and remote facilities also rely on financial programs to generate additional income in order to maintain their engines and stay in operation. The additional funds can be essential for many smaller facilities and operations. Providing a limited allowance for peak shaving and non-emergency demand response could generate sufficient income to prevent small facilities and owners from ceasing operation where these engines are in service. In order to further limit the operation of these engines to small, remote facilities, the EPA is proposing that the power generated under this allowance can only be used at the facility or towards the local system. In addition, while the EPA is proposing this allowance until the end of April 16, 2017, the EPA does not believe it is appropriate to continue the program beyond that time. Generators receive considerable compensation for their availability in peak shaving programs and the EPA believes that it is not appropriate to allow these engines toPage 38 of 201 continue receiving compensation for this non-emergency use beyond 2017 without having to reduce their emissions. The generators must by that time decide whether to restrict their use to emergency or limited non-compensated non-emergency use or to reduce the emissions from their engines. The EPA also encourages engine owners and operators, as well as larger system planners, to consider the use of alternative peak shaving options, such as load curtailments, lower emitting distributed generation, combined heat and power, and reduced line losses on the electricity grid. The previous estimate of emissions from stationary emergency engines is not expected to change due to this proposed limited allowance. To estimate emissions from stationary emergency engines, the EPA has previously estimated that emergency engines would on average operate for 50 hours per year. There is a wide range in how much these engines operate (some well below 50 hours per year), but on average and to be conservative, the EPA believes that 50 hours per year is still representative and consequently the environmental impact the EPA has calculated previously remains appropriate. In consideration of all these issues, the EPA is proposing amendments to the rule to provide a limited allowance for peak shaving for existing stationary emergency engines at area sources of HAP. The specific amendments the EPA is proposing are discussed below.Page 39 of 201 2. Proposed Amendments a. Emergency Demand Response. Based on the discussion in section II.B.1 of this preamble, the EPA is proposing to revise the current provisions for stationary engines used for emergency demand response operation. The provisions the EPA is proposing to amend are in §§63.6640(f) and 63.6675 of 40 CFR part 63, subpart ZZZZ. Currently, §63.6640(f)(1)(iii) allows a maximum of 15 hours per year to be spent towards demand response operation under certain qualifying conditions. Also, §63.6640(f)(1)(ii) currently includes an allowance of 100 hours per year for purposes of maintenance checks and readiness testing. The EPA is proposing that owners and operators of stationary emergency RICE be permitted to operate their engines as part of an emergency demand response program within the 100 hours per year that is permitted for maintenance and testing in §63.6640(f)(1)(ii). Owners and operators of stationary emergency engines can operate for emergency demand response during periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an EEA Level 2 as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergency and during periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. The hours spent for emergency demandPage 40 of 201 response operation are added to the hours spent for maintenance and testing purposes and counted towards the 100 hours per year. If the total time spent for demand response operation and maintenance and testing exceeds 100 hours per year the engine will not be considered an emergency engine under this subpart and will need to meet all requirements for non-emergency engines. The EPA is recognizing that these engines may be called to operate not only by the regional transmission operator or equivalent to maintain the reliability of the bulk power system, but also by the local transmission and distribution system operators to support the local power systems. For stationary emergency engines above 500 HP that were installed prior to June 12, 2006, there is currently no emergency demand response allowance and there is no time limit on the use of emergency engines for routine testing and maintenance in §63.6640(f)(2)(ii). Those engines were not the focus of the 2010 RICE NESHAP amendments; therefore, the EPA did not make any changes to the requirements for those engines as part of the 2010 amendments. For consistency, the EPA is now also proposing that owners and operators of stationary emergency engines installed prior to June 12, 2006, be permitted to operate their engines as part of a demand response program as well for a total of 100 hours per year, including time spent for maintenance and testing.Page 41 of 201 The EPA is also proposing to amend the NSPS for stationary CI and SI engines in 40 CFR part 60, subparts IIII and JJJJ, respectively, to provide the same allowance for stationary emergency engines for emergency demand response operation as for engines subject to the RICE NESHAP. The NSPS regulations currently do not include such an allowance for emergency demand response operation. For the reasons discussed in section II.B of this preamble as to why the EPA finds it appropriate to allow stationary emergency engines to participate in emergency demand response programs and remain being considered emergency units, and for consistency across engine regulations, the EPA is proposing to add an emergency demand response allowance under the NSPS regulations. Consequently, the EPA is proposing to revise the existing language in §§60.4211(f) and 60.4219 of 40 CFR part 60, subpart IIII, and §§60.4243(d) and 60.4248 of 40 CFR part 60, subpart JJJJ, to specify that emergency engines may participate in demand response programs for up to 100 hours per year, including hours spent towards maintenance and testing of the emergency engines. b. Peak Shaving and other Non-emergency Use as Part of a Financial Arrangement. In addition to the changes the EPA is proposing related to emergency demand response operation, the EPA is also including a further provision for owners and operators of existing stationary emergency RICE located at areaPage 42 of 201 sources for the reasons discussed in section II.B.1 of this preamble. Paragraph §63.6640(f) currently allows owners and operators of emergency stationary RICE to operate their engine for 50 hours per year in non-emergency situations. As currently written, the 50 hours per year for non-emergency situations cannot be used for peak shaving or to generate income for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity; except that owners and operators of certain emergency engines may operate the engine for a maximum of 15 hours per year as part of an emergency demand response program. As discussed, the 15 hours per year allowance for emergency engines to participate in emergency demand response programs is being increased to 100 hours per year, but will also include hours spent towards maintaining and conducting readiness testing of the emergency engines. However, additionally, the EPA is also proposing that stationary emergency engines located at area sources be permitted to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any non-emergency operation, including operation as part of a financial agreement with another entity. The peak shaving allowance would expire in 2017. The EPA is specifying that the power can only be used at the facility or towards the local system, and the engine can only be operated for peak shaving asPage 43 of 201 part of a program with the local distribution system operator. The EPA is also clarifying that an engine that exceeds the calendar year limitations on non-emergency operation, including emergency demand response or peak shaving, will be considered anon-emergency engine and subject to the requirements for nonemergency engines for the remaining life of the engine. C. Non-Emergency Stationary SI RICE Greater than 500 HP Located

at Area Sources 1. Background The EPA is also proposing to amend the requirements that apply to existing stationary non-emergency 4 stroke SI RICE greater than 500 HP located at area sources of HAP emissions, which are generally natural gas fired engines. Currently, the RICE NESHAP requires owners and operators of such engines to 1) either meet a CO concentration limit of 47 parts ppmvd at 15 percent O 2 or reduce emissions of CO by 93 percent or more, if the engines are 4SLB; and 2) to meet a formaldehyde concentration limit of 2.7 ppmvd at 15 percent O 2 or reduce formaldehyde emissions by 76 percent or more, if the engines are 4SRB. In both cases, the EPA expects that the standards would be met using aftertreatment; oxidation catalysts for 4SLB engines and NSCR for 4SRB engines. In addition to these emission requirements, owners and operators of existing stationary 4- stroke engines greater than 500 HP at area sources are alsoPage 44 of 201 subject to monitoring, testing, recordkeeping and reporting requirements. After the final requirements for existing stationary SI engines greater than 500 HP at area sources were published on August 20, 2010 (75 FR 51570), the EPA received petitions from Exterran (EPA-HQ-OAR-2008-0708-0581), the American Petroleum Institute (EPA-HQ-OAR-2008-0708-0582), the Interstate Natural Gas Association of America (EPA-HQ-OAR-2008-0708-0584), and the Gas Processors Association (EPA-HQ-OAR-2008-0708-0587) requesting that the EPA reconsider the requirements of the final rule. The petitioners expressed many similar concerns. As relevant to this rulemaking, petitioners stated that the EPA did not take into account the difference in population density and subsequently did not consider the difference in health impacts in remote versus more heavily populated locations. In the petitioners’ opinion, there should be less concern about engines that are located farther away from people; the petitioners believed that the EPA has substantial latitude in requiring less stringent standards for owners and operators of stationary engines in remote areas.

While the EPA does not share all of the views of the petitioners regarding the difference between engines based on their location, the EPA does believe that it is reasonable to create a subcategory of existing stationary SI 4SLB and 4SRBPage 45 of 201 engines above 500 HP located in areas remote from human activity. Engines located in remote areas that are not close to significant human activity may be difficult to access, may not have electricity or communications, and may be unmanned most of the time. The costs of the emission controls, testing, and continuous monitoring requirements may be unreasonable when compared to the HAP emission reductions that would be achieved, considering that the engines are in sparsely populated areas. The EPA believes that establishing a subcategory for SI engines at area sources of HAP located in sparsely populated areas accomplishes the agency’s goals and is adequate in protecting public health. The EPA is proposing to subcategorize sparsely populated engines using the existing DOT classification system for natural gas pipelines. This system classifies locations based on their distance to natural gas pipelines covered by the Pipeline and Hazardous Materials Safety Administration safety regulations. The DOT system defines a class location unit as an onshore area that extends 220 yards or 200 meters on either side of the centerline of any continuous 1-mile (1.6 kilometers) length of natural gas pipeline. The DOT approach further classifies pipeline locations into Class 1 through Class 4 locations based on the number of buildings intended for human occupancy. A Class 1 location is defined as an offshore area or any class locationPage 46 of 201 unit that has 10 or fewer buildings intended for human occupancy. The DOT classification system also has special provisions for locations that lie within 100 yards (91 meters) of either a building or a small, well-defined outside area (such as a playground, recreation area, outdoor theater, or other place of public assembly) that is occupied by 20 or more persons on at least 5 days a week for 10 weeks in any 12-month period , and for class location units where buildings with four or more stories above ground are prevalent. To be considered remote, a source could not fall under one of these special provisions. Stakeholders from the oil and gas industry have indicated to the EPA that the DOT system is well-established and there would be substantial overlap between engines on natural gas pipelines affected by the rule and covered by the DOT pipeline classification system. Incorporating this approach would also

create harmonization between the EPA and DOT and would reduce the implementation and enforcement burden for states. Implementation for affected sources would also be less burdensome because the system is already in place and used by the natural gas pipeline industry and covers the majority of these engines. Stakeholders have indicated they are required to review the class location status of natural gas pipeline segments annually. The EPA believes this approach is reasonable for defining the subcategory of remote engines for those engines Deleted:

.

Comment [A1]: DOT would classify this as a Class 4 area. Please see the attached DOT regulations. Comment [A2]: We recommend adding this sentence for clarity.Page 47 of 201 that are associated with natural gas pipelines. For those engines not associated with pipelines, the EPA is using similar criteria. An engine would be considered to be in sparsely populated areas if within 0.25 mile radius of the engine there are 5 or fewer buildings intended for human occupancy. EPA requests comment on whether the use of these DOT classifications are appropriate for airborne emissions and whether , to be considered remote, an engine not associated with a natural gas pipeline should also need to be farther than 100 yards (91 meters) of either a building or a small, well-defined outside area (such as a playground, recreation area, outdoor theater, or other place of public assembly) that is occupied by 20 or more persons on at least 5 days a week for 10 weeks in any 12-month period. The EPA is proposing management practices as generally available control technologies for existing stationary SI 4SLB and 4SRB area source non-emergency engines located in sparsely populated areas. Given the remote location of the engines from human activity, the EPA believes that it is appropriate not to include requirements that would necessitate aftertreatment and extensive testing and monitoring. The EPA has previously estimated that the costs of oxidation catalyst for existing 4SLB and 4SRB engines above 500 HP at area sources are $310 and $150 million, for capital and annual costs, respectively. The capital Comment [A3]: Thank you for adding this comment request. We added some language to include a specific question that should be asked too.Page 48 of 201 and annual costs of the RICE NESHAP for existing 4SLB and 4SRB engines above 500 HP at area sources would be $30 million and $12 million, respectively, if these proposed amendments are incorporated into the rule. Creating a subcategory of these engines for the ones located in sparsely populated areas and not mandating emission controls would significantly reduce the cost of the rule for such engines.For existing stationary SI 4SLB and 4SRB area source nonemergency engines that are located in populated areas, the EPA is proposing an equipment standard that requires the installation and operation of a catalyst that will have to be tested initially and annually to ensure that the catalyst is working properly and reducing emissions as required. In addition, these units will be required to have devices to shut down the engine if the catalyst is exposed to dangerous temperatures or have continuous monitoring equipment installed to record catalyst inlet temperatures. The EPA is proposing shorter test duration and less rigorous methods than currently required while still ensuring that HAP reductions remain at expected levels for these engines located in populated areas. The specific amendments the EPA is proposing are discussed

below. 2. Proposed AmendmentsPage 49 of 201 Owners and operators of engines in sparsely populated areas would have to conduct a review of the surrounding area every 12 months to determine if the nearby population has changed. If the engine no longer meets the criteria for a sparsely populated area the owner and operator must within 1 year comply with the emission standards specified below for populated areas. The EPA requests comment on whether engines that are not associated with pipelines should be required to conduct the review less frequently than every 12 months. Owners and operators of existing stationary 4SLB and 4SRB greater than 500 HP at area sources that are in sparsely populated areas as described above would be required to perform the following:

 Change oil and filter every 1,440 hours of operation or annually, whichever comes first;

 Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary;

and

 Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as

necessary. Sources have the option to use an oil analysis program as described in §63.6625(i) of the rule in order to extend the specified oil change requirement. The oil analysis must bePage 50 of 201 performed at the same frequency specified for changing the oil in Table 2d of the rule. The analysis program must at a minimum analyze the following three parameters: Total Acid Number, viscosity, and percent water content. The condemning limits for these parameters are as follows: Total Acid Number increases by more than 3.0 milligrams of potassium hydroxide per gram from Total Acid Number of the oil when new; viscosity of the oil has changed by more than 20 percent from the viscosity of the oil when new; or percent water content (by volume) is greater than 0.5. If all of these condemning limits are not exceeded, the engine owner or operator is not required to change the oil. If any of the limits are exceeded, the engine owner or operator must change the oil within 2 days of receiving the results of the analysis; if the engine is not in operation when the results of the analysis are received, the engine owner or operator must change the oil within 2 days or before commencing operation, whichever is later. The owner or operator must keep records of the parameters that are analyzed as part of the program, the results of the analysis, and the oil changes for the engine. The analysis program must be part of the maintenance plan for the engine. Owners and operators of existing stationary 4SLB and 4SRB area source engines above 500 HP in sparsely populated areas would also have to operate and maintain the stationary RICE andPage 51 of 201 aftertreatment control device (if any) according to the manufacturer's emission-related written instructions or develop their own maintenance plan which must provide to the extent practicable for the maintenance and operation of the engine in a manner consistent with good air pollution control practice for minimizing emissions. For engines in populated areas, i.e., existing stationary 4SLB and 4SRB non-emergency engines greater than 500 HP at area sources that are located on DOT Class 2 through Class 4 pipeline segments or, for engines not associated with pipelines, that do not meet the 0.25 mile radius with 5 or less buildings criteria, the EPA is proposing to adopt an equipment standard requiring the installation of a catalyst to reduce HAP emissions. Owners and operators of existing area source 4SLB non-emergency engines greater than 500 HP in populated areas would be required to install an oxidation catalyst. Owners and operators of existing area source 4SRB non-emergency engines greater than 500 HP in populated areas would be required to install NSCR. Owners and operators must conduct an initial test to demonstrate that the engine achieves at least a 93 percent reduction in CO emissions or a CO concentration level of 47 ppmvd at 15 percent O 2 , if the engine is a 4SLB engine. Similarly, owners and operators must conduct an initial performance test to demonstrate that the engine achieves at least a 75 percent CO reduction or a 30Page 52 of 201 percent THC reduction, if the engine is a 4SRB engine. The

initial test must consist of three test runs. Each test run must be of at least 15 minute duration, except that each test run conducted using the proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the method and include at least 2 minutes of test data phase measurement. To measure CO, emission sources must use the CO methods already specified in subpart ZZZZ, or the proposed appendix A to 40 CFR part 63, subpart ZZZZ. The THC testing must be conducted using EPA Method 25A. The owner or operator of both engine types must also use a high temperature shutdown device that detects if the catalyst inlet temperature is too high, or, alternatively, the owner or operator can monitor the catalyst inlet temperature continuously and maintain the temperature within the range specified in the rule. For 4SLB engines the catalyst inlet temperature must remain at or above 450°F and at or below 1,350°F. For 4SRB engines the temperature range must be greater than or equal to 750°F and less than or equal to 1,250°F at the catalyst inlet. Owners and operators must in addition to the initial performance test conduct annual checks of the catalyst to ensure proper catalyst activity. The annual check of the catalyst must at a minimum consist of one 15-minute run using the methods discussed above, except that each test run conducted using thePage 53 of 201 proposed appendix A to 40 CFR part 63, subpart ZZZZ must consist of one measurement cycle as defined by the method and include at least 2 minutes of test data phase measurement. Owners and operators of 4SLB engines must demonstrate during the catalyst activity test that the catalyst achieves at least a 93 percent reduction in CO emissions or that the engine exhaust CO emissions are no more than 47 ppmvd at 15 percent O 2 . Owners and operators of 4SRB engines must demonstrate that their catalyst is reducing CO emissions by 75 percent or more, or alternatively, that THC emissions are being reduced by at least 30 percent during the catalyst activity check. If the emissions from the engine do not exceed the levels required for the initial test or annual checks of the catalyst, then the catalyst is considered to be working properly. If the emissions exceed the specified pollutant levels in the rule, the exceedance(s) is/are not considered a violation, but the owner or operator would be required to shut down the engine and take appropriate corrective action (e.g., repairs, clean or replace the catalyst, as appropriate). A follow-up test must be conducted within 7 days of the engine being started up again to demonstrate that the emission levels are being met. If the retest shows that the emissions continue to exceed the specified levels, the stationary RICE must again be shut down as soon as safely possible, and the engine may not operate, except forPage 54 of 201 purposes of start-up and testing, until the owner/operator demonstrates through testing that the emissions do not exceed the levels specified. D. Stationary Agricultural RICE in San Joaquin Valley In the 2010 amendments to the RICE NESHAP, the EPA required existing non-emergency CI engines above 300 HP to meet a standard of either 70 percent reduction of CO emissions or 49 ppmvd CO, for engines between 300 and 500 HP, or 23 ppmvd CO for engines above 500 HP. The requirements also included testing and monitoring provisions. As with all requirements for existing engines in that rule, owners and operators were required to meet the requirements within 3 years of the effective date of the regulations (May 3, 2013). Since the finalization of the rule for existing stationary CI engines, stakeholders from the agricultural industry in the San Joaquin Valley area of California have expressed concern regarding the effect of certain of these requirements on engines in the San Joaquin Valley. The San Joaquin Valley Air Pollution Control District (APCD) has indicated that there are 17 stationary CI engines at area sources in San Joaquin Valley certified to the Tier 3 standards in 40 CFR part 89 that were installed between January 1 and June 12, 2006. Under the NESHAP, stationary CI engines at area sources are existing if construction of the engine commenced prior to June 12, 2006.Page 55 of 201 These 17 Tier 3 engines in the San Joaquin Valley, which were built to meet stringent emission standards, would not be able to comply with the applicable RICE NESHAP emission standards for existing engines without further testing and monitoring, and possible retrofit with further controls, due to differences in the emission standards and testing protocols in the RICE NESHAP versus the Tier 3 standards in 40 CFR part 89. However, an identical engine certified to the Tier 3 standards (or Tier 2 standards for engines above 560 kilowatts (kW)) in 40 CFR part 89 that was installed after June 12, 2006, would not have to be retrofit in order to comply with the NESHAP. Stationary CI engines installed after June 12, 2006, at area sources of HAP are required to comply with the NSPS for stationary CI engines, which requires engines to be certified to the standards in 40 CFR parts 89, 94, 1039, and 1042, as applicable. Thus, a 2006 model year stationary CI engine installed after June 12, 2006, that is certified to the applicable standards would meet the requirements of the NESHAP without further controls or testing. While the EPA does not know if other certified Tier 3 engines besides these 17 engines in the San Joaquin Valley were installed prior to June 12, 2006, EPA believes the same rationale should apply to any such engine. The EPA believes that the Tier 3 standards (Tier 2 for engines above 560 kW) are technologically stringent regulationsPage 56 of 201 and believes it is unnecessary to require further regulation of engines meeting these standards. Engines meeting the Tier 3 standards typically employed emission control technologies such as combustion optimization and better fuel control to meet the Tier 3 standards. In order to address the concerns raised by the engine owners in the San Joaquin Valley, the EPA is proposing changes to amend the requirements for any certified Tier 3 (Tier 2 for engines above 560 kW) stationary CI engine located at an area source and installed before June 12, 2006. The EPA is proposing amendments to specify that any existing certified Tier 3 (Tier 2 for engines above 560 kW) CI engine that was installed before June 12, 2006, is in compliance with the NESHAP. This amendment would include any existing stationary Tier 3 (Tier 2 for engines above 560 kW) certified CI engine located at an area

source of HAP emissions. Another concern brought to the EPA’s attention by the San Joaquin Valley agricultural industry is that due to state and local requirements in the San Joaquin Valley, many of the Tier 1 and Tier 2 stationary CI engines that are regulated as existing sources under the NESHAP must be replaced in the next few years, only a short time after the emission standards for existing engines must be met. Specifically, the San Joaquin Valley APCD rule for internal combustion engines (Rule 4702) requires Tier 1 and Tier 2 certified engines to meet Tier 4 standards by JanuaryPage 57 of 201 1, 2015, or 12 years after the installation date, but no later than June 1, 2018. The concern is that owners and operators of these engines would have to install aftertreatment by 2013 to meet the emission standards of the RICE NESHAP and then only a few years later be required to replace their engines per San Joaquin Valley APCD Rule 4702. The San Joaquin Valley APCD has identified 49 Tier 1 engines and 360 Tier 2 engines that are scheduled to be replaced under the local rule. The EPA has not identified any engines outside the San Joaquin Valley APCD area that are in the same or similar situation (i.e., required to be replaced shortly after the compliance date for existing engines), but the EPA does not preclude the possibility that there are such engines in other areas, and requests comment and information on other areas that may have similar concerns. The EPA does not think it is appropriate to require emission controls on a stationary CI engine that is going to be retired only a short time after the rule goes into effect. Stationary CI engines would have to comply with this rule by May 3, 2013, and owners of engines above 300 HP are expected to have to install aftertreatment on their engines in order to meet the

emission standards. The EPA estimates that the one-time cost to equip a 500 HP stationary CI engine with the controls necessary

to meet the emission standards under this rule is close to $14,000 and more than $3,000 on a yearly basis, not accountingPage 58 of 201 for additional costs associated with monitoring, testing, recordkeeping and reporting. These engines (equipped with aftertreatment) could end up being in operation for less than 2 years or at most only 5 years before having to be replaced with a certified Tier 4 engine, as required by San Joaquin Valley District Rule 4702. It would not be reasonable to require the engine owner to invest in costly controls and monitoring equipment for an engine that will be replaced shortly after the

installation of the controls. Consequently, the EPA is proposing amendments to existing stationary CI engines located at area sources of HAP emissions to address this concern. The EPA is proposing to amend the requirements for existing stationary Tier 1 and Tier 2 certified CI engines located at area sources that are greater than 300 HP that are subject to a state or local rule that requires the engine to be replaced. The EPA is proposing to allow these engines to meet management practices from the applicable May 3, 2013, compliance date until January 1, 2015, or 12 years after installation date (whichever is later), but not later than June 1, 2018. This proposed change would provide owners enough time to replace their engines without mandating a possibly cost prohibitive requirement to change all of the engines in a short amount of time, while still requiring that replacement of the engine or a retrofit of the engine occur relatively quicklyPage 59 of 201 after the owner would have to comply with the NESHAP. The EPA is proposing that these engines be subject to management practices until January 1, 2015, or 12 years after installation date (whichever is later), but not later than June 1, 2018, after which time the CO emission standards discussed above (and that are in Table 2d of the rule) apply. The management practices include requirements for when to inspect and replace the engine oil and filter, air cleaner, hoses and belts. The complete details of which management practices are required are shown in Table 2d of the rule. Owners and operators of these existing stationary CI engines located at area sources of HAP emissions that intend to meet management practices rather than the emission limits prior to January 1, 2015, or 12 years after installation date, but not later than June 1, 2018, must submit a notification by March 3, 2013, stating that they intend to use this provision and identifying the state or local regulation that the engine is subject to.

E. Remote Areas of Alaska 1. Background The RICE NESHAP currently specifies less stringent requirements for existing non-emergency CI engines at area

sources located in remote areas of Alaska. Remote areas are defined as those not accessible by the FAHS. The FAHS includes areas with year-round ferry service that are not on thePage 60 of 201 contiguous road system. Under the current regulation, stationary non-emergency CI engines at area sources in areas of Alaska that are not accessible by the FAHS are subject to management practices as opposed to numerical emission standards. Following the publication of the final rule in 2010, the EPA received requests to expand the definition of remote areas

of Alaska. Stakeholders asserted that facilities in areas that are accessible by the FAHS but are not connected to the Alaska Railbelt grid face the same challenges as those in areas not accessible by the FAHS. The Alaska Railbelt Grid refers to the service areas of the six regulated public utilities that extend from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are the Golden Valley Electric Association, Chugach Electric Association, Matanuska Electric Association, Homer Electric Association, Anchorage Municipal Light & Power, and the City of Seward Electric System. According to the stakeholders, one reason for broadening the definition of remote areas in Alaska is high energy costs, which provide a natural incentive to run CI engines as little as possible. The cost of energy is utilities’ greatest concern in Alaska. Also, the stakeholders

indicated that extreme weather conditions in certain areas of Alaska is another reason for including additional areas in the

definition of remote areas of Alaska. The climate issue is unique to remote areas of Alaska that experience some of thePage 61 of 201 most extreme temperatures in the country. Heavy snowfall and high winds are not uncommon in several areas that are accessible by the FAHS. For instance, Copper Valley Electric Association (CVEA) is a utility accessible by the FAHS, but it includes areas that face the same challenges as other communities not accessible by the FAHS. The utility operates on an isolated grid and relies on diesel power generation. In one of CVEA’s territories, Valdez, Alaska, CVEA indicated that this area experiences brutal conditions and stated that Valdez is considered to have the greatest snowfall (326 inches per winter) in any city of the United States. Also, winds at more than 100 miles per hour are not uncommon for Valdez, Alaska, according to CVEA. Temperatures between 40 and 50 below zero are also not abnormal, which emphasizes the extreme reliance on power, CVEA asserted. Travel times and accessibility are issues on a regular basis, but can be additionally exacerbated due to severe weather, which in some cases may lead to avalanches and road closings. In particular, even if a site is on the FAHS, in the event of poor weather conditions and road closings, there are in many cases no alternate roads to travel on. Further, access to specific isolated sites can also be problematic in particular remote areas of Alaska and the problems are unique to Alaska because of the infrastructure and environment. For example, communities made the case that sources along the AMHS that arePage 62 of 201 only accessible by the AMHS should be treated the same way as communities not accessible by the FAHS. The AMHS primarily serves passengers and vehicles, and is not intended for transporting goods. Therefore, the same methods used to bring in goods to communities not on the FAHS are the same as those Alaskan villages served only by the AMHS. Goods are typically brought in to remote communities by barge and this is another example of a scenario that is unique to Alaska. Other arguments for expanding the definition of remote areas of Alaska beyond those not accessible by the FAHS include very low population density in many other remote areas although accessible by the FAHS, and the fact that many of these areas are not connected to the electric grid and rely on back up diesel generation to support fluctuating renewable energy systems. The energy supply system is another area that is particularly different in Alaska compared to the rest of the country where the majority of customers are connected to the grid. Therefore, for the reasons discussed, the EPA is proposing expansion of the remote area source category. This proposal is supported by the Alaska Department of Environmental Conservation and communities with

whom the EPA has discussed this issue. 2. Proposed Amendments The EPA is proposing to expand the current definition of remote areas of Alaska to extend beyond areas that are notPage 63 of 201 accessible by the FAHS. Specifically, the EPA is proposing that areas of Alaska that are accessible by the FAHS and that meet all of the following criteria are also considered remote and subject to management practices under the rule:

 The stationary CI engine is located in an area not connected to the Alaska Railbelt Grid,

 At least 10 percent of the power generated by the engine per year is used for residential purposes, and

 The system capacity is less than 12 megawatts, or the engine is used exclusively for backup power for renewable energy and is used less than 500 hours per year on a 10- year rolling average. The EPA is proposing limiting the remote classification to engines that are used at least partially for residential purposes, where the impact of higher energy costs is of greatest

concern. The classification is further limited to sources that are used infrequently as backup for renewable power, or that are at smaller capacity facilities, which are generally in more sparsely populated areas.

F. Miscellaneous Corrections and Revisions The EPA is making some minor corrections to the stationary engine rules to address miscellaneous issues. The EPA is making

some minor revisions in the rules to correct mistakes in thePage 64 of 201 current rules or to clarify the rules. The revisions are as

follows:

 Revising Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ to correct language requiring the pressure drop to be at plus or minus 10 percent 100 percent load for all engines. The engines that were regulated in 2010 are not subject to the load requirements and therefore the EPA is correcting

these tables to make this clear.

 Adding a footnote to Table 1b of 40 CFR part 63, subpart ZZZZ stating that sources can petition the Administrator for a different temperature range consistent with Table 2b

of the rule.

 Correcting rows 8 and 10 in Table 2d of 40 CFR part 63, subpart ZZZZ to indicate that the requirements apply to non-emergency, non-black start stationary RICE greater than 500 HP that are 4SLB and 4SRB that operate more than 24 hours per year, as intended in the original rule.

 Revising the language in §63.6625(b) of 40 CFR part 63, subpart ZZZZ that states “...in paragraphs (b)(1) through (5) of this section” to “in paragraphs (b)(1) through (6)

of this section.”Page 65 of 201

 Changing Tables 2c and 2d of 40 CFR part 63, subpart ZZZZ, where it currently specifies to inspect air cleaner, to also specify that it must be replaced as necessary.

 Revising §63.6620(b) of 40 CFR part 63, subpart ZZZZ to indicate that testing must be conducted within plus or minus 10 percent of 100 percent load for stationary RICE greater than 500 HP located at a major source (except existing non-emergency CI stationary RICE greater than 500 HP located at a major source) that are subject to testing.

 Specifying that, as was intended in the rule adding these requirements, the operating limitations (pressure drop and catalyst inlet temperature) in Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ do not have to be met during startup.

 For consistency, and as provided in the original RICE NESHAP for other stationary RICE, clarifying in 40 CFR part 63, subpart ZZZZ that the existing stationary RICE regulated in 2010 (i.e., engines constructed before June 12, 2006 that are less than or equal to 500 HP located at major sources or engines located at area sources) must burn landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis in order to qualify as a landfill or digester gas engine under the

rule.Page 66 of 201

 Clarifying §60.4207(b) of 40 CFR part 60, subpart IIII to specify that owners and operators of stationary CI engines less than 30 liters per cylinder that are subject to the subpart that use diesel fuel must use diesel fuel that meets the requirements of 40 CFR 80.510(b), except owners and operators may use up any diesel fuel acquired prior to October 1, 2010, that does not meet the requirements of 40 CFR 80.510(b) for nonroad diesel fuel.

 Adding appendix A to 40 CFR part 63, subpart ZZZZ, which includes procedures that can be used for measuring CO emissions from existing stationary 4SLB and 4SRB stationary

RICE above 500 HP located at area sources of HAP that are complying with the emission limits in Table 2d of 40 CFR part 63, subpart ZZZZ.

 Reinstating the footnotes for Table 2 of 40 CFR part 60, subpart JJJJ. The footnotes were inadvertently removed when the rule was amended on June 28, 2011 (76 FR 37954).

 Adding “part 60” in Table 4 of the NESHAP, in row 2 where it refers to 40 CFR appendix A.

 Clarifying in §63.6625(a) of 40 CFR part 63, subpart ZZZZ that a continuous emission monitoring system is only required to be installed at the outlet of the controlPage 67 of 201 device for engines that are complying with the requirement

to limit the concentration of CO.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(b) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that use gasoline.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(c) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that are rich burn engines that use LPG.

 Clarifying that, as was intended in the rule adding these requirements, all of the standards for stationary SI RICE in §60.4231(d) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE that are not gasoline engines or rich burn engines that use LPG. G. Compliance Date The EPA has received questions regarding whether the compliance dates for engines impacted by the 2010 amendments and this proposed reconsideration will be extended. Affected sources that may be impacted by this action have expressed concern about having sufficient time to comply with the rule by the compliance date, which is May 3, 2013, for existing stationary CI RICE and October 19, 2013, for existing stationary SI RICE. Sources impacted by this reconsideration are particularly concerned withPage 68 of 201 compliance in the event that the EPA does not finalize changes that are substantially similar to the changes being proposed in this action. The EPA does not intend to extend the May 3, 2013, and October 19, 2013, compliance dates, because there are many engines that must meet those compliance dates that are not impacted by this reconsideration. However, the EPA notes that sources that are affected by the reconsideration and that may need additional time to install controls to comply with the applicable requirements can request up to an additional year to install controls, as specified in 40 CFR 63.6(i). The EPA requests comment regarding whether special consideration should be given to engines whose requirements would be reduced by this proposal if, in the final rule, the EPA does not finalize the proposed reduced requirements. **III. Summary of Environmental, Energy and Economic Impacts**

A. What are the air quality impacts? The EPA estimates that the rule with the proposed amendments incorporated will reduce emissions from existing stationary RICE as shown in Table 1 of this preamble. The emissions reductions the EPA previously estimated for the 2010 amendments to the RICE NESHAP are shown for comparison. Reductions are shown for the year 2013, which is the first year the final RICE NESHAP will be implemented for existing stationary RICE.Page 69 of 201 **Table 1. Summary of Reductions for Existing Stationary RICE**

**Pollutant Emission Reductions**  **( tpy)**  **in the year 2013**

**2010 Final Rule 2010 Final Rule with**  **these Proposed Amendments**  **CI SI C**  **I S**  **I HAP**  1,014 6,008 1 ,005 1 ,778 **CO** 14,342 109,321 14,238 22,211 **PM** 2,844 N/A 2,818 N/A **NO x**  N/A 96,479 N/A 9,648 **VOC** 27,395 30,907 27,142 9,147

The EPA estimates that more than 900,000 stationary CI engines will be subject to the rule in total, but only a small number of stationary CI engines are affected by the proposed amendments in this action. It is estimated that approximately 330,000 stationary SI engines will be subject to the rule in total; however, only a subset of stationary SI engines are affected by the proposed amendments in this action. The decrease in estimated reductions for SI engines is primarily due to proposed amendments to the requirements for existing 4SRB and 4SLB SI engines larger than 500 HP at area sources of HAP that are in remote areas. Those engines were required by the 2010 rule to meet emission limits that were expected to require the installation of aftertreatment to reduce emissions; under these proposed amendments, those engines are required to meet management practices that would not require the installation of aftertreatment. Further information regarding the estimatedPage 70 of 201 reductions of this final rule can be found in the memorandum titled, “RICE NESHAP Reconsideration Amendments - Cost andEnvironmental Impacts,” which is available in the docket (EPAHQ-OAR-2008-0708). The EPA did not estimate any reductions associated with the minor changes to the NSPS for stationary CI and SI engines. B. What are the cost impacts? The proposed amendments are expected to reduce the overall cost of the original 2010 RICE NESHAP amendments. The EPA estimates that with these proposed amendments incorporated the cost of the rule for existing stationary RICE will be as shown in Table 2 of this preamble. The costs the EPA previously

estimated for the 2010 amendments to the RICE NESHAP are shown for comparison. The costs that were previously estimated are shown in the original year ($2008 for CI and $2009 for SI), as

well as escalated to 2010 dollars. **Table 2. Summary of Cost Impacts for Existing Stationary RICE**

**Engine 2010 Final Rule**  **2010 Final Rule with these Proposed Amendments**  **Total Annual Cost SI**  $253 million ($2009) $251 million ($2010) $115 million ($2010)

**CI** $373 million ($2008) $375 million ($2010) $373 million ($2010) **Total Capital Cost SI**  $383 million ($2009) $380 million ($2010 ) $103 million ($2010)

**CI** $744 million ($2008) $748 million ($2010) $740 million ($2010)Page 71 of 201

Further information regarding the estimated cost impacts of the proposed amendments, including the cost of the proposed amendments in 2010 dollars, can be found in the memorandum titled, “RICE NESHAP Reconsideration Amendments - Cost andEnvironmental Impacts,” which is available in the docket (EPAHQ-OAR-2008-0708). The EPA did not estimate costs associated with the changes to the NSPS for stationary CI and SI engines. The changes to the NSPS are minor and are not expected to impact

the costs of those rules.

C. What are the benefits? Emission controls installed to meet the requirements of these rules will generate benefits by reducing emissions of HAP as well as criteria pollutants and their precursors, including CO, NOx and VOC. NOx and VOC are precursors to PM 2.5 (particles smaller than 2.5 microns) and ozone. The criteria pollutant

benefits are considered co-benefits for these rules. For these rules, we were only able to quantify the health co-benefits associated with reduced exposure to PM 2.5 from emission reductions of NOx and directly emitted PM 2.5 . The EPA previously estimated that the monetized co-benefits in 2013 of the stationary CI NESHAP would be $940 million to $2,300 million (2008 dollars) at a 3-percent discount rate and $850 million to $2,100 million (2008 dollars) at a 7-percentPage 72 of 201 discount rate. 5 For stationary SI engines, EPA previously estimated that the monetized co-benefits in 2013 would be $510 million to $1,200 million (2009 dollars) at a 3-percent discount rate) and $460 million to $1,100 million (2009 dollars) at a 7- percent discount rate. 6 The proposed amendments are expected to reduce the overall emission reductions of the rules. In addition to revising the anticipated emission reductions, we have also updated the methodology used to calculate the co-benefits to be consistent with methods used in more recent rulemakings, which is summarized below and discussed in more detail in the Regulatory Impact Analysis (RIA). We estimate the monetized co-benefits of the proposed amendments of the CI NESHAP in 2013 to be $770 million to $1,900 million (2010 dollars) at a 3-percent discount rate and $690 million to $1,700 million (2010 dollars) at a 7- percent discount rate. For SI engines, we estimate the monetized co-benefits of the proposed amendments in 2013 to be $62 million to $150 million (2010 dollars) at a 3-percent discount rate and

5 U.S. Environmental Protection Agency. 2010. Regulatory Impact Analysis (RIA) for Existing Stationary Compression Ignition Engines NESHAP: Final Draft . Research Triangle Park, NC. February. http://www.epa.gov/ttn/ecas/regdata/RIAs/CIRICENESHAPRIA2-17- 0cleanpublication.pdf. 6 U.S. Environmental Protection Agency. 2010. Regulatory Impact Analysis (RIA) for Existing Stationary Spark Ignition (SI) RICE NESHAP: Final Report . Research Triangle Park, NC. August. http://www.epa.gov/ttn/ecas/regdata/RIAs/riceriafinal.pdf.Page 73 of 201 $55 million to $140 million (2010 dollars) at a 7-percent

discount rate. Using alternate relationships between PM 2.5 and premature mortality supplied by experts, higher and lower co-benefits estimates are plausible, but most of the expert-based estimates

fall between these two estimates. 7 A summary of the monetized cobenefits estimates for CI and SI engines at discount rates of 3 percent and 7 percent is in Table 3 of this preamble. Table 3. Summary of the Monetized PM 2.5 Co-Benefits for Proposed Amendments to the NESHAP for Stationary CI and SI Engines (millions of 2010 dollars) a, b

Pollutant Emission reductions

(tons per

year) Total monetized co-benefits

(3 percent Discount) Total monetized co-benefits

(7 percent Discount) Original 2010 Final Rules c Stationary CI Engines Total Benefits 2,844 PM 2.5 27,395 VOC $950 to $2,300 $860 to $2,100 Stationary SI Engines Total Benefits 96,479 NOx 30,907 VOC $510 to $1,300 $470 to $1,100 2010 Final Rules with these Proposed Amendments Stationary CI Engines Directly emitted PM 2.5 2,818 $770 to $1,900 $690 to $1,700 Stationary SI Engines NOx 9,648 $62 to $150 $55 to $140

a All estimates are for the analysis year (2013) and are rounded to two significant figures so numbers may not sum across rows. The total monetized co-benefits reflect the human health

7 Roman, et al. , 2008. Expert Judgment Assessment of the Mortality Impact of Changes in Ambient Fine Particulate Matter in the U.S. , Environ. Sci. Technol., 42, 7, 2268 – 2274.Page 74 of 201 benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . It is important to note that the monetized co-benefits do not include reduced health effects from exposure to HAP, direct exposure to NO 2 , exposure to ozone, ecosystem effects or visibility impairment. b PM co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.

c The benefits analysis for the 2010 final rules applied outdated benefit-per-ton estimates compared to the updatedestimates described in this preamble and reflected monetized cobenefits for VOC emissions, which limits direct comparability with the monetized co-benefits estimated for these proposed rules. In addition, these estimates have been updated from their original currency years to 2010$, so the rounded estimates for the 2010 final rules may not match the original RIAs. These co-benefits estimates represent the total monetized human health benefits for populations exposed to less PM 2.5 in 2013 from controls installed to reduce air pollutants in order

to meet these rules. To estimate human health co-benefits of these rules, the EPA used benefit-per-ton factors to quantify the changes in PM 2.5 -related health impacts and monetized benefits based on changes in directly emitted PM 2.5 and NOx emissions. These benefit-per-ton factors were derived using the general approach and methodology laid out in Fann, Fulcher, and Hubbell (2009). 8 This approach uses a model to convert emissions

8 Fann, N., C.M. Fulcher, B.J. Hubbell. 2009. The influence of location, source, and emission type in estimates of the human health benefits of reducing a ton of air pollution . Air Qual Atmos Health (2009) 2:169–176.Page 75 of 201 of PM 2.5 precursors into changes in ambient PM 2.5 levels and another model to estimate the changes in human health associated with that change in air quality, which are then divided by the emission reductions to create the benefit-per-ton estimates. However, for these rules, we utilized air quality modeling of emissions in the “Non-EGU Point other” category because we do not have modeling specifically for stationary engines. 9,10 The primary difference between the estimates used in this analysis and the estimates reported in Fann, Fulcher, and Hubbell (2009) is the air quality modeling data utilized. While the air quality data used in Fann, Fulcher, and Hubbell (2009) reflects broad pollutant/source category combinations, such as all non-EGU stationary point sources, the air quality modeling data used in this analysis has narrower sector categories. In addition, the updated air quality modeling data reflects more recent emissions data (2005 rather than 2001) and has a higher spatial resolution (12km rather than 36 km grid cells). The benefits methodology,

9 U.S. Environmental Protection Agency. 2012. Technical support document: Estimating the benefit per ton of reducing PM 2.5 precursors from other point sources

. Research Triangle Park, NC. 10 Stationary engines are included in the other non-EGU point source category. If the affected stationary engines are more rural than the average of the non-EGU sources modeled, then it is possible that the benefits may be somewhat less than we have estimated here. The TSD provides the geographic distribution of the air quality changes associated with this sector. It is important to emphasize that this modeling represents the best available information on the air quality impact on a per ton basis for these sources.Page 76 of 201 such as health endpoints assessed, risk estimates applied, and valuation techniques applied did not change. As a result, the benefit-per-ton estimates presented herein better reflect the geographic areas and populations likely to be affected by this sector. However, these updated estimates still have similar limitations as all national-average benefit-per-ton estimates in that they reflect the geographic distribution of the modeled emissions, which may not exactly match the emission reductions in this rulemaking, and they may not reflect local variability in population density, meteorology, exposure, baseline health incidence rates, or other local factors for any specific

location. We apply these national benefit-per-ton estimates calculated for this sector separately for directly emitted PM 2.5 and NOx and multiply them by the corresponding emission reductions. The sector modeling does not provide estimates of

the PM 2.5 -related benefits associated with reducing VOC emissions, but these unquantified benefits are generally small compared to other PM 2.5 precursors. More information regarding the derivation of the benefit-per-ton estimates for this category is available in the technical support document, which is available

in the docket. These models assume that all fine particles, regardless of their chemical composition, are equally potent in causingPage 77 of 201 premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type. The main PM 2.5 precursors affected by these rules are directly emitted PM 2.5 and NO X . Even though we assume that allfine particles have equivalent health effects, the benefit-perton estimates vary between precursors depending on the location and magnitude of their impact on PM 2.5 levels, which drive population exposure. For example, directly emitted PM 2.5 has a lower benefit-per-ton estimate than direct PM 2.5 because it does

not form as much PM 2.5 ; thus, the exposure would be lower, and

the monetized health benefits would be lower. It is important to note that the magnitude of the PM 2.5 cobenefits is largely driven by the concentration response function for premature mortality. Experts have advised the EPA to consider a variety of assumptions, including estimates based both on empirical (epidemiological) studies and judgments elicited from scientific experts, to characterize the uncertainty in the relationship between PM 2.5 concentrations and premature mortality. We cite two key empirical studies, one based on the American Cancer Society cohort study 11 and the

11 Pope, et al. , 2002. Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine Particulate Air Pollution

. Journal of the American Medical Association 287:1132-1141.Page 78 of 201 extended Six Cities cohort study. 12 In the RIA for this proposed amendments rule, which is available in the docket, we also include benefits estimates derived from the expert judgments and other assumptions.

The EPA strives to use the best available science to support our benefits analyses. We recognize that interpretation of the science regarding air pollution and health is dynamic and evolving. After reviewing the scientific literature, we have determined that the no-threshold model is the most appropriate model for assessing the mortality benefits associated with reducing PM 2.5 exposure. Consistent with this finding, we have conformed the previous threshold sensitivity analysis to the current state of the PM science by incorporating a new “Lowest Measured Level” (LML) assessment in the RIA accompanying these rules. While an LML assessment provides some insight into the level of uncertainty in the estimated PM mortality benefits, the

EPA does not view the LML as a threshold and continues to quantify PM-related mortality impacts using a full range of modeled air quality concentrations.

Most of the estimated PM-related co-benefits for these rules would accrue to populations exposed to higher levels of

12 Laden, et al. , 2006. Reduction in Fine Particulate Air Pollution and Mortality . American Journal of Respiratory and Critical Care Medicine 173: 667-672.Page 79 of 201

PM 2.5 . For this analysis, policy-specific air quality data are not available due to time or resource limitations, and thus, we are unable to estimate the percentage of premature mortality associated with this specific rule’s emission reductions at each

PM 2.5 level. As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the source apportionment modeling used to calculate the benefit-per-ton estimates for this sector. Using the Pope,

et al. (2002) study, 77 percent of the population is exposed to

annual mean PM 2.5 levels at or above the LML of 7.5 micrograms per cubic meter (μg/m 3 ). Using the Laden, et al. (2006) study, 25 percent of the population is exposed above the LML of 10 μg/m 3

. It is important to emphasize that we have high confidence in

PM 2.5 -related effects down to the lowest LML of the major cohort studies. This fact is important, because, as we model avoided premature deaths among populations exposed to levels of PM 2.5 , we have lower confidence in levels below the LML for each study. Every benefit analysis examining the potential effects of a change in environmental protection requirements is limited, to some extent, by data gaps, model capabilities (such as geographic coverage) and uncertainties in the underlying scientific and economic studies used to configure the benefit and cost models. Despite these uncertainties, we believe the benefit analysis for these rules provides a reasonablePage 80 of 201 indication of the expected health benefits of the rulemaking under a set of reasonable assumptions. This analysis does not include the type of detailed uncertainty assessment found in the

2006 PM 2.5 National Ambient Air Quality Standard (NAAQS) RIA because we lack the necessary air quality input and monitoring data to run the benefits model. In addition, we have not conducted air quality modeling for these rules, and using a benefit-per-ton approach adds another important source of uncertainty to the benefits estimates. The 2006 PM 2.5 NAAQS benefits analysis 13 provides an indication of the sensitivity of our results to various assumptions.

It should be noted that the monetized co-benefits estimates provided above do not include benefits from several important benefit categories, including exposure to HAP, NOx, ozone exposure, as well as ecosystem effects and visibility impairment. Although we do not have sufficient information or modeling available to provide monetized estimates for these proposed amendments, we include a qualitative assessment of these unquantified benefits in the RIA for these proposed

amendments.

13 U.S. Environmental Protection Agency, 2006. Proposed amendments Regulatory Impact Analysis: PM 2.5 NAAQS . Prepared by Office of Air and Radiation. October. Available on the Internet at http://www.epa.gov/ttn/ecas/ria.html

.Page 81 of 201 For more information on the benefits analysis, please refer to the RIA for these proposed amendments, which is available in

the docket. D. What are the non-air health, environmental and energy impacts? The EPA does not anticipate any significant non-air health, environmental or energy impacts as a result of these proposed

amendments. **IV. Solicitation of Public Comments and Participation** The EPA seeks full public participation in arriving at its final decisions, and strongly encourages comments on all aspects of this proposed rule from all interested parties. Whenever applicable, full supporting data and detailed analysis should be

submitted to allow the EPA to make maximum use of the comments. The agency invites all parties to coordinate their data collection activities with the EPA to facilitate mutually

beneficial and cost-effective data submissions. A redline/strikeout version of the complete NESHAP for stationary RICE, which shows the changes that are being proposed in this action, is available from the rulemaking docket. The EPA is seeking specific comment on the proposal to temporarily allow stationary emergency engines located at area sources to apply the 50 hours per year that is currently allowed under §63.6640(f) for non-emergency operation towards any typePage 82 of 201of non-emergency operation, including peak shaving and nonemergency demand response if the peak shaving is done as part of a peak shaving (load management) program with the local distribution system operator. The EPA is proposing that the allowance be removed after April 16, 2017. The EPA recognizes that the electricity grid achieves demand response and grid stability with and without the use of emergency stationary RICE. Alternative approaches include reductions or shifts in energy use, electricity storage, distribution automation, microgrids, natural gas-fired combustion turbines, and grid-connected distributed generation, including non-emergency engines and combined heat and power. Many of these approaches can provide additional benefits, such as additional energy efficiency, lower costs, shorter electricity outage times, and better integration of renewable energy generation into the electricity grid. Several studies project a significant future potential for using less energy in homes, buildings, and industry during times of peak electricity demand. The EPA seeks comment on how these investments may affect the number of hours which emergency stationary RICE are needed in the future to address electricity peak shaving and grid stability. The EPA is also specifically seeking comment on the proposed criteria for expanding the current definition of remotePage 83 of 201 areas of Alaska beyond areas that are not accessible by the FAHS. The EPA requests comment on whether the proposed system capacity limitation of 12 megawatts and the alternative 500 hour cap on annual usage (based on a 10-year rolling average) are the appropriate criteria for distinguishing the areas of Alaska that, while accessible by the FAHS, have the same unique challenges as the areas that are not accessible by the FAHS. The EPA is also seeking information related to irrigation pump engine sizes. During the 2010 rulemaking, the EPA relied upon several sources to determine the potential number of irrigation engines that may be impacted by the rule. Using these sources, the EPA estimated that the vast majority of the existing irrigation engines were less than or equal to 300 HP. The EPA received several comments confirming this estimation. The EPA seeks comprehensive, nationwide information on the size of existing irrigation engines to either confirm or refute our understanding of existing irrigation engine sizes; this information will assist EPA in assessing the impacts of the 2010 rule on existing irrigation engines. The EPA has placed information in the docket for this rulemaking on the number of irrigation engines provided by the U.S. Department of Agriculture after the 2010 RICE NESHAP amendments were

finalized. **V. Statutory and Executive Order Reviews**Page 84 of 201 A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory

Review Under section 3(f)(1) of Executive Order 12866 (58 FR 51735, October 4, 1993), this action is an “economically significant regulatory action” because it is likely to have an annual effect on the economy of $100 million or more. Accordingly, the EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Order 12866 and Executive Order 13563 (76 FR 3821, January 21, 2011), and any changes made in response to OMB recommendations have been documented in the docket for this action. In addition, the EPA prepared a RIA of the potential costs and benefits

associated with this action. A summary of the monetized benefits, compliance costs and

net benefits for the 2010 rule with the proposed amendments to the stationary CI engines NESHAP at discount rates of 3 percent and 7 percent is in Table 4 of this preamble. The summary for stationary SI engines is included in Table 5 of this preamble. OMB Circular A-4 recommends that analysis of a change in an existing regulatory program use a baseline that assumes “no change” in the existing regulation. For purposes of this rule, however, the EPA has decided that it is appropriate to assume a Comment [A4]: please include this clarificationPage 85 of 201 baseline in which the original 2010 rule did not exist. The EPA feels that this baseline is appropriate because .... Table 4. Summary of the Monetized Benefits, Compliance Costs and Net benefits for the 2010 Rule with the Proposed Amendments to the Stationary CI Engine NESHAP in 2013 (millions of 2010 dollars) a 3-Percent Discount Rate 7-Percent Discount Rate Total Monetized Benefits b $770 to $1,900 $690 to $1,700 Total Compliance Costs c $373 $373 Net Benefits $400 to $1,500 $320 to $1,300

Non-Monetized Benefits Health effects from exposure to HAP Health effects from direct exposure to NO 2 and ozone Health effects from PM 2 .5 exposure from VOC Ecosystem effects Visibility impairment

a All estimates are for the implementation year (2013) and are rounded to two significant figures. b The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . Co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.

c The engineering compliance costs are annualized using a 7- percent discount rate. Table 5. Summary of the Monetized Benefits, Compliance Costs and Net benefits for the 2010 Rule with the Proposed Amendments to the Stationary SI Engine NESHAP in 2013 (millions of 2010 dollars) a 3-Percent Discount Rate 7-Percent Discount Rate Total Monetized Benefits b $62 to $150 $55 to $140 Total Compliance $115 $115 Comment [A5]: As a follow-up to the discussion on Friday, this language reflects our understanding that EPA is not following A-4 here. In keeping with the directives of EO12866 and 13563, we think EPA should provide a few sentences here explaining why the baseline it has chosen is appropriate even though it’s a deviation from A-4. Comment [A6]: Need this clarification in the title, otherwise the chart is misleading.

Comment [A7]: Same comment as abovePage 86 of 201

Costs c Net Benefits $-53 to $35 $-60 to $25

Non-Monetized Benefits Health effects from exposure to HAP Health effects from direct exposure to NO 2 and ozone Health effects from PM 2 .5 exposure from VOC Ecosystem effects Visibility impairment

a All estimates are for the implementation year (2013) and are rounded to two significant figures. b The total monetized co-benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of PM 2.5 precursors, such as NO X and directly emitted PM 2.5 . Co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates by particle type.

c The engineering compliance costs are annualized using a 7- percent discount rate. For more information on the cost-benefit analysis, please refer to the RIA for these proposed amendments, which is

available in the docket. B. Paperwork Reduction Act This action does not impose any new information collection burden. This action does not impose an information collection burden because the agency is not requiring any additional recordkeeping, reporting, notification or other requirements in these proposed amendments. The changes being proposed in this action do not affect information collection, but include revisions to emission standards and other minor issues. However, the OMB has previously approved the information collectionPage 87 of 201 requirements contained in the existing regulations under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0548. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations and small governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The companies owning facilities with affected RICE can be grouped into small and large categories using SBA general sizePage 88 of 201 standard definitions. Size standards are based on industry classification codes (i.e., North American Industrial Classification System, or NAICS) that each company uses to identify the industry or industries in which they operate. The SBA defines a small business in terms of the maximum employment, annual sales, or annual energy-generating capacity (for electricity generating units—EGUs) of the owning entity. These thresholds vary by industry and are evaluated based on the primary industry classification of the affected companies. In cases where companies are classified by multiple NAICS codes, the most conservative SBA definition (i.e., the NAICS code with the highest employee or revenue size standard) was used. As mentioned earlier in this preamble, facilities across several industries use affected CI and SI stationary RICE; therefore, a number of size standards are utilized in this analysis. For the 15 industries identified at the 6-digit NAICS code represented in this analysis, the employment size standard (where it applies) varies from 500 to 1,000 employees. The annual sales standard (where it applies) is as low as 0.75 million dollars and as high as 33.5 million dollars. In addition, for the electric power generation industry, the small business size standard is an ultimate parent entity defined ashaving a total electric output of 4 million megawatt-hours (MWhr) in the previous fiscal year. The specific SBA size standardPage 89 of 201 is identified for each affected industry within the industry profile to support this economic analysis. After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This certification is based on the economic impact of

this action to all affected small entities across all industries affected. The percentage of small entities impacted by this proposal having annualized costs of greater than 1 percent of their sales is less than 2 percent according to the small entity analysis. We conclude that there is no significant economic impact on a substantial number of small entities for this rule. For more information on the small entity impacts associated with the rule, please refer to the Economic Impact and Small Business Analyses in the public docket. These analyses can be found in the RIA for each of the rules affected by this action. Although the proposed reconsideration rule would not have a significant economic impact on a substantial number of small entities, EPA nonetheless tried to reduce the impact of the rule on small entities. When developing the revised standards, EPA took special steps to ensure that the burdens imposed on small entities were minimal. EPA conducted several meetings with industry trade associations to discuss regulatory options and the corresponding burden on industry, such as recordkeeping andPage 90 of 201 reporting. In addition, as mentioned earlier in this preamble, EPA proposes to reduce regulatory requirements for a variety of

area sources affected under each of the RICE rules with amendments to the final RICE rules promulgated in 2010. We continue to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act of 1995 This rule does not contain a federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the private sector in any one year. The EPA is proposing management practices for certain existing engines located at area sources and is proposing amendments that will provide owners and operators with alternative and less expensive compliance demonstration methods. As a result of these proposed changes, the EPA anticipates a

substantial reduction in the cost burden associated with this rule. Thus, this rule is not subject to the requirements of

sections 202 or 205 of UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The changes being proposed in this action by the agency will mostly affect stationary engine owners and operatorsPage 91 of 201 and will not affect small governments. The proposed amendments

will lead to a reduction in the cost burden.

E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This proposed action primarily affects private industry, and does not impose significant economic costs on state or local governments. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Order 13132 and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicits comment on this proposed action from state and local officials.

F. Executive Order 13175: Consultation and Coordination with

Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does notPage 92 of 201 apply to this action. The EPA specifically solicits additional comment on this proposed action from tribal officials.

G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks

The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it is based solely on technology performance. H. Executive Order 13211: Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution or Use This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action reduces the burden of the rule on owners and operators of stationary engines by providing less burdensome compliance demonstration methods to owners and operators and greater flexibility in the operation of emergency engines. As a result of these proposed changes, the EPA anticipates a substantial reduction in the cost burden

associated with this rule. I. National Technology Transfer and Advancement ActPage 93 of 201 Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable voluntary consensus standards. This proposed rulemaking involves technical standards. The EPA proposes to use EPA Method 25A of 40 CFR part 60, appendix A. While the agency identified two voluntary consensus standards as being potentially applicable, we do not propose to use it in this rulemaking. The two candidate voluntary consensus standards, ISO 14965:2000(E) and EN 12619 (1999), identified would not be practical due to lack of equivalency, documentation, validation data and other important technical and policy considerations. The search and review results have been documented and are placed in the docket for the proposed rule. EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identifyPage 94 of 201 potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 (59 FR 7629 (February 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies and activities on minority populations and low-income populations in the United

States.

The EPA has concluded that it is not feasible to determine whether there would be disproportionately high and adverse human health or environmental effects on minority, low income or indigenous populations from the reconsideration of this final rule, as the EPA does not have specific information about the location of the stationary RICE affected by this rule. Comment [A8]: Based on the fact that an engine can be classified as “remote” if it is 101 yards from a playground (or 201 meters from an apartment complex), this statement does not seem accurate – while this may be true for some of the engines, others could be in populated areas, right? Deleted: Although the EPA does not have specific engine location information, to the extent this rule achieves fewer reductions than the original rule, the decrease in reductions is primarily occurring in very remote areas that are sparsely populated.National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source Performance Standards for Stationary Internal Combustion Engines Page 95 of 201 **List of Subjects** 40 CFR part 60 Administrative practice and procedure, Air pollution control, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping. 40 CFR part 63 Administrative practice and procedure, Air pollution control, Hazardous substances, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping requirements.

______________________ Dated:

______________________ Lisa P. Jackson, Administrator.Page 96 of 201

For the reasons stated in the preamble, title 40, chapter I of the Code of Federal Regulations is amended as follows: **PART 60—[AMENDED]** 1. The authority citation for part 60 continues to read as

follows: Authority: 42 U.S.C. 7401, et seq

. **Subpart IIII—[amended]** 1. Section 60.4207 is amended by revising paragraph (b) to

read as follows: §60.4207 What fuel requirements must I meet if I am an owner or operator of a stationary CI internal combustion engine subject to this subpart?

* * * * * (b) Beginning October 1, 2010, owners and operators of stationary CI ICE subject to this subpart with a displacement of less than 30 liters per cylinder that use diesel fuel must use diesel fuel that meets the requirements of 40 CFR 80.510(b) for nonroad diesel fuel, except that any existing diesel fuel purchased (or otherwise obtained) prior to October 1, 2010, may be used until depleted.

* * * * * 2. Section 60.4211 is amended by revising paragraph (f) to

read as follows:Page 97 of 201

§60.4211 What are my compliance requirements if I am an owner or operator of a stationary CI internal combustion engine?

* * * * * (f) If you own or operate an emergency stationary ICE, you must operate the emergency stationary ICE according to the requirements in paragraphs (f)(1) through (3) of this section. In order for the engine to be considered an emergency stationary ICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (f)(1) through (3) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (f)(1) through (3) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations on non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary ICE in emergency situations. (2) You may operate your emergency stationary ICE for any combination of the purposes specified in paragraphs (f)(2)(i) through (iii) of this section for a maximum of 100 hours perPage 98 of 201

calendar year. Any operation for non-emergency situations as allowed by paragraph (f)(3) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (f)(2). (i) Emergency stationary ICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency ICE beyond 100 hours per calendar year. (ii) Emergency stationary ICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies.Page 99 of 201

(iii) Emergency stationary ICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary ICE may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 3. Section 60.4219 is amended by revising the definition of “Emergency stationary internal combustion engine” to read as

follows: §60.4219 What definitions apply to this subpart?

* * * * * Emergency stationary internal combustion engine means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary ICE must comply with the requirements specified in §60.4211(f) in order to be considered emergency stationary ICE. If the engine does not comply with thePage 100 of 201

requirements specified in §60.4211(f), then it is not considered to be an emergency stationary ICE under this subpart. (1) The stationary ICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary ICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary ICE used to pump water in the case of fire or flood, etc. (2) The stationary ICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §60.4211(f). (3) The stationary ICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §60.4211(f)(2)(ii) or (iii).

* * * * * **Subpart JJJJ—[amended]** 4. Section 60.4231 is amended by revising paragraphs (b) through (d) to read as follows:

§60.4231 What emission standards must I meet if I am a manufacturer of stationary SI internal combustion engines or equipment containing such engines?Page 101 of 201

* * * * * (b) Stationary SI internal combustion engine manufacturers must certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) (except emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(2), or manufactured on or after the applicable date in §60.4230(a)(4) for emergency stationary ICE with a maximum engine power greater than or equal to 130 HP, to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that use gasoline and that are manufactured on or after the applicable date in §60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cubic centimeters (cc) that use gasoline to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90.Page 102 of 201

(c) Stationary SI internal combustion engine manufacturers must certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) (except emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) that are rich burn engines that use LPG and that are manufactured on or after the applicable date in §60.4230(a)(2) , or manufactured on or after the applicable date in §60.4230(a)(4) for emergency stationary ICE with a maximum engine power greater than or equal to 130 HP, to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers must certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP that are rich burn engines that use LPG and that are manufactured on or after the applicable date in §60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, and other requirements for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cc that are rich burn engines that use LPG to the certification emission standards and other requirements for new nonroad SI engines in 40 CFR part 90.Page 103 of 201

(d) Stationary SI internal combustion engine manufacturers who choose to certify their stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except gasoline and rich burn engines that use LPG and emergency stationary ICE with a maximum engine power greater than 25 HP and less than 130 HP) under the voluntary manufacturer certification program described in this subpart must certify those engines to the certification emission standards for new nonroad SI engines in 40 CFR part 1048. Stationary SI internal combustion engine manufacturers who choose to certify their emergency stationary SI ICE greater than 25 HP and less than 130 HP (except gasoline and rich burn engines that use LPG), must certify those engines to the Phase 1 emission standards in 40 CFR 90.103, applicable to class II engines, for new nonroad SI engines in 40 CFR part 90. Stationary SI internal combustion engine manufacturers may certify their stationary SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) with a total displacement less than or equal to 1,000 cc (except gasoline and rich burn engines that use LPG) to the certification emission standards for new nonroad SI engines in 40 CFR part 90. For stationary SI ICE with a maximum engine power greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except gasoline and rich burn engines that use LPG and emergency stationary ICE with a maximum engine powerPage 104 of 201

greater than 25 HP and less than 130 HP) manufactured prior to January 1, 2011, manufacturers may choose to certify these engines to the standards in Table 1 to this subpart applicable to engines with a maximum engine power greater than or equal to

100 HP and less than 500 HP.

* * * * * 5. Section 60.4243 is amended by revising paragraph (d) to

read as follows: §60.4243 What are my compliance requirements if I am an owner or operator of a stationary SI internal combustion engine?

* * * * * (d) If you own or operate an emergency stationary ICE, you must operate the emergency stationary ICE according to the requirements in paragraphs (d)(1) through (3) of this section. In order for the engine to be considered an emergency stationary ICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (d)(1) through (3) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (d)(1) through (3) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations onPage 105 of 201

non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary ICE in emergency situations. (2) You may operate your emergency stationary ICE for any combination of the purposes specified in paragraphs (d)(2)(i) through (iii) of this section for a maximum of 100 hours per calendar year. Any operation for non-emergency situations as allowed by paragraph (d)(3) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (d)(2). (i) Emergency stationary ICE may be operated for maintenance checks and readiness testing, provided that the tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency ICE beyond 100 hours per calendar year.Page 106 of 201

(ii) Emergency stationary ICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. (iii) Emergency stationary ICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary ICE may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (d)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 6. Section 60.4248 is amended by revising the definition of “Emergency stationary internal combustion engine” to read as

follows: §60.4248 What definitions apply to this subpart?Page 107 of 201

* * * * * Emergency stationary internal combustion engine means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary ICE must comply with the requirements specified in §60.4243(d) in order to be considered emergency stationary ICE. If the engine does not comply with the requirements specified in §60.4243(d), then it is not considered to be an emergency stationary ICE under this subpart. (1) The stationary ICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary ICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own power production) is interrupted, or stationary ICE used to pump water in the case of fire or flood, etc. (2) The stationary ICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §60.4243(d). (3) The stationary ICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §60.4243(d)(2)(ii) or (iii).Page 108 of 201

* * * * * 7. Table 2 to Subpart JJJJ of Part 60 is revised to read as

follows: **Table 2 to Subpart JJJJ of Part 60 –- Requirements for Performance Tests**  As stated in §60.4244, you must comply with the following requirements for performance tests within 10 percent of 100 percent peak (or the highest achievable) load: **For each Complying with the**  **requirement to**  **You must U**  **sing According to the**  **following requirement**  **s** 1. Stationary SI internal combustion engine demonstrati ng compliance according to §60.4244. a. limit the concentrati on of NO x in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; (1) M ethod 1 or 1A of 4 0 CFR part 60, Appendix A or ASTM Method D6522- 00(2005) a

. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device. ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for NO x concentrati on.Page 109 of 201

iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for NO x concentrati on.

v. Measure NO x at the exhaust of the stationary internal combustion engine. ( 5) Method 7E of 40 CFR part 60, a ppendix A, Method D6522- 00(2005) a , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.Page 110 of 201

b. limit the concentrati on of CO in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A or ASTM Method D6522- 00(2005) a

. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device. ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for CO concentrati on. iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.Page 111 of 201

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for CO concentrati on.

v. Measure CO at the exhaust of the stationary internal combustion engine. ( 5) Method 10 of 40 CFR part 60, a ppendix A, A STM Method D6522- 00(2005) a , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.

c. limit the concentrati on of VOC in the stationary SI internal combustion engine exhaust i. Select the sampling port location and the number of traverse points; ( 1) Method 1 or 1A of 4 0 CFR part 60, Appendix A. (a) If using a control d evice, the sampling site must be located at the outlet of t he control device.Page 112 of 201

ii. Determine the O 2 concentrati on of the stationary internal combustion engine exhaust at the sampling port location; (2) Method 3, 3A, or 3B b of 40 CFR part 60, appendix A or ASTM Method D6522- 00(2005) a

. (b) Measurement s to determine O 2 concentrati on must be m ade at the same time as the measurement s for VOC concentrati on. iii. If necessary, determine the exhaust flowrate of the stationary internal combustion engine exhaust; (3) Method 2 or 19 of 4 0 CFR part 60.

iv. If necessary, measure moisture content of the stationary internal combustion engine exhaust at the sampling port location; and ( 4) Method 4 of 40 CFR part 60, a ppendix A, Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). (c) Measurement s to determine moisture must be m ade at the same time as the measurement for VOC concentrati on.Page 113 of 201

v. Measure VOC at the exhaust of the stationary internal combustion engine. (5) M ethods 25A and 18 of 4 0 CFR part 60, a ppendix A, Method 25A with the use of a methane cutter as described in 40 CFR 1065.265, Method 18 or 40 CFR part 60, appendix A c,d , Method 320 of 40 CFR part 63, a ppendix A, or ASTM D 6348-03 (incorporat ed by reference, see §60.17). ( d) Results of this test consist of t he average of the three 1- hour or longer runs.

a ASTM D6522-00 is incorporated by reference; see 40 CFR 60.17. Also, you may petition the Administrator for approval to use alternative methods for portable analyzer. b You may use ASME PTC 19.10-1981, Flue and Exhaust Gas Analyses, for measuring the O 2 content of the exhaust gas as an alternative to EPA Method 3B.

c You may use EPA Method 18 of 40 CFR part 60, appendix A, provided that you conduct an adequate presurvey test prior to the emissions test, such as the one described in OTM 11 on EPA’s website ( http://www.epa.gov/ttn/emc/prelim/otm11.pdf ). d You may use ASTM D6420-99 (2004), Test Method for Determination of Gaseous Organic Compounds by Direct Interface Gas Chromatography/Mass Spectrometry as an alternative to EPA Method 18 for measuring total nonmethane organic. **PART 63--[AMENDED]**Page 114 of 201

8. The authority citation for part 63 continues to read as

follows: Authority: 42 U.S.C. 7401, et seq

. **Subpart ZZZZ--[amended]** 9. Section 63.6585 is amended by adding paragraph (f) to

read as follows: §63.6585 Am I subject to this subpart?

* * * * * (f) The emergency stationary RICE listed in paragraphs (f)(1) through (3) of this section are not subject to this subpart. The stationary RICE must meet the definition of an emergency stationary RICE in §63.6675, which includes operating according to the provisions specified in §63.6640(f). (1) Existing residential emergency stationary RICE located

at an area source of HAP emissions. (2) Existing commercial emergency stationary RICE located

at an area source of HAP emissions. (3) Existing institutional emergency stationary RICE

located at an area source of HAP emissions. 10. Section 63.6590 is amended by removing paragraphs (b)(3)(vi) through (viii). 11. Section 63.6595 is amended by revising paragraph (a)(1)

to read as follows: §63.6595 When do I have to comply with this subpart?Page 115 of 201

(a) * * * (1) If you have an existing stationary RICE, excluding existing non-emergency CI stationary RICE, with a site rating of more than 500 brake HP located at a major source of HAP emissions, you must comply with the applicable emission limitations, operating limitations and other requirements no later than June 15, 2007. If you have an existing non-emergency CI stationary RICE with a site rating of more than 500 brake HP located at a major source of HAP emissions, an existing stationary CI RICE with a site rating of less than or equal to 500 brake HP located at a major source of HAP emissions, or an existing stationary CI RICE located at an area source of HAP emissions, you must comply with the applicable emission limitations, operating limitations, and other requirements no later than May 3, 2013. If you have an existing stationary SI RICE with a site rating of less than or equal to 500 brake HP located at a major source of HAP emissions, or an existing stationary SI RICE located at an area source of HAP emissions, you must comply with the applicable emission limitations, operating limitations, and other requirements no later than October 19, 2013.

* * * * *

12. Section 63.6602 is revised to read as follows:Page 116 of 201

§63.6602 What emission limitations and other requirements must I meet if I own or operate an existing stationary RICE with a site rating of equal to or less than 500 brake HP located at a major source of HAP emissions? If you own or operate an existing stationary RICE with a site rating of equal to or less than 500 brake HP located at a major source of HAP emissions, you must comply with the emission limitations and other requirements in Table 2c to this subpart which apply to you. Compliance with the numerical emission limitations established in this subpart is based on the results of testing the average of three 1-hour runs using the testing requirements and procedures in §63.6620 and Table 4 to this subpart. 13. Section 63.6603 is amended by: a. Revising the section heading; b. Revising paragraph (b); and c. Adding paragraphs (c) through (e) to read as follows: §63.6603 What emission limitations, operating limitations, and other requirements must I meet if I own or operate an existing stationary RICE located at an area source of HAP emissions?

* * * * *(b) If you own or operate an existing stationary nonemergency CI RICE with a site rating of more than 300 HP located at an area source of HAP that meets either paragraph (b)(1) orPage 117 of 201

(b)(2) of this section, you do not have to meet the numerical CO emission limitations specified in Table 2d of this subpart. Existing stationary non-emergency CI RICE with a site rating of

more than 300 HP located at an area source of HAP that meet either paragraph (b)(1) or (b)(2) of this section must meet the management practices that are shown for stationary non-emergency CI RICE with a site rating of less than or equal to 300 HP in Table 2d of this subpart. (1) The area source is located in an area of Alaska that is not accessible by the Federal Aid Highway System (FAHS). (2) The stationary RICE is located at an area source that meets paragraphs (b)(2)(i), (b)(2)(ii), and (b)(2)(iii) of this

section. (i) The only connection to the FAHS is through the Alaska Marine Highway System (AMHS), or the stationary RICE operation is within an isolated grid in Alaska that is not connected to the statewide electrical grid referred to as the Alaska Railbelt

Grid. (ii) At least 10 percent of the power generated by the stationary RICE on an annual basis is used for residential

purposes. (iii) The generating capacity of the area source is less than 12 megawatts, or the stationary RICE is used exclusivelyPage 118 of 201

for backup power for renewable energy and is used less than 500 hrs per year on a 10 year rolling average. (c) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source

of HAP emissions that is certified to the Tier 1 or Tier 2

emission standards in Table 1 of 40 CFR 89.112 and that is subject to an enforceable state or local standard that requires the engine to be replaced no later than June 1, 2018, you may until January 1, 2015, or 12 years after the installation date of the engine (whichever is later), but not later than June 1, 2018, choose to comply with the management practices that are shown for stationary non-emergency CI RICE with a site rating of less than or equal to 300 HP in Table 2d of this subpart instead of the applicable emission limitations in Table 2d, operating limitations in Table 2b, and crankcase ventilation system requirements in §63.6625(g). You must comply with the emission limitations in Table 2d and operating limitations in Table 2b that apply for non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP emissions by January 1, 2015, or 12 years after the installation date of the engine (whichever is later), but not later than June 1, 2018. You must also comply with the crankcase ventilation system requirements in §63.6625(g) by January 1, 2015, or 12 yearsPage 119 of 201

after the installation date of the engine (whichever is later), but not later than June 1, 2018. (d) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP emissions that is certified to the Tier 3 (Tier 2 for engines above 560 kW) emission standards in Table 1 of 40 CFR 89.112, you may comply with the requirements under this part by meeting the requirements for Tier 3 engines (Tier 2 for engines above 560 kW) in 40 CFR part 60 subpart IIII instead of the emission limitations and other requirements that would otherwise apply under this part for existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source of HAP

emissions. (e) An existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at area sources of HAP must meet the definition of remote stationary RICE in §63.6675 on the initial compliance date for the engine, October 19, 2013, in order to be considered a remote stationaryRICE under this subpart. Owners and operators of existing nonemergency SI 4SLB and 4SRB stationary RICE with a site rating of

more than 500 HP located at area sources of HAP that meet the definition of remote stationary RICE in §63.6675 of this subpart as of October 19, 2013 must evaluate the status of their stationary RICE every 12 months. Owners and operators must keepPage 120 of 201

records of the initial and annual evaluation of the status of the engine. If the evaluation indicates that the stationary RICE no longer meets the definition of remote stationary RICE in §63.6675 of this subpart, the owner or operator must comply with all of the requirements for existing non-emergency SI 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at area sources of HAP that are not remote stationary RICE within one year of the evaluation.

14. Section 63.6604 is revised to read as follows: §63.6604 What fuel requirements must I meet if I own or operate an existing stationary CI RICE? If you own or operate an existing non-emergency, non-black start CI stationary RICE with a site rating of more than 300 brake HP with a displacement of less than 30 liters per cylinder that uses diesel fuel, you must use diesel fuel that meets the requirements in 40 CFR 80.510(b) for nonroad diesel fuel. Existing non-emergency CI stationary RICE located in Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or at area sources in areas of Alaska that meet either §63.6603(b)(1) or §63.6603(b)(2) are exempt from the requirements of this section. 15. Section 63.6605 is amended by revising paragraph (a) to

read as follows:Page 121 of 201

§63.6605 What are my general requirements for complying with this subpart? (a) You must be in compliance with the emission limitations, operating limitations, and other requirements in this subpart that apply to you at all times.

* * * * * 16. Section 63.6620 is amended by revising paragraphs (b) and (e) to read as follows: §63.6620 What performance tests and other procedures must I

use?

* * * * * (b) Each performance test must be conducted according to the requirements that this subpart specifies in Table 4 to this subpart. If you own or operate a non-operational stationary RICE that is subject to performance testing, you do not need to start up the engine solely to conduct the performance test. Owners and operators of a non-operational engine can conduct the performance test when the engine is started up again. The test must be conducted at any load condition within plus or minus 10 percent of 100 percent load for the stationary RICE listed in paragraphs (b)(1) through (4) of this section. (1) Non-emergency 4SRB stationary RICE with a site rating of greater than 500 brake HP located at a major source of HAP

emissions.Page 122 of 201

(2) New non-emergency 4SLB stationary RICE with a site rating of greater than or equal to 250 brake HP located at a major source of HAP emissions. (3) New non-emergency 2SLB stationary RICE with a site rating of greater than 500 brake HP located at a major source of

HAP emissions. (4) New non-emergency CI stationary RICE with a site rating of greater than 500 brake HP located at a major source of HAP

emissions.

* * * * * (e)(1) You must use Equation 1 of this section to

determine compliance with the percent reduction requirement:

Where:

C i = concentration of CO, THC, or formaldehyde at the control device inlet, C o = concentration of CO, THC, or formaldehyde at the control device outlet, and R = percent reduction of CO, THC, or formaldehyde emissions.

(2) You must normalize the carbon monoxide (CO), total hydrocarbons (THC), or formaldehyde concentrations at the inlet and outlet of the control device to a dry basis and to 15 percent oxygen, or an equivalent percent carbon dioxide (CO 2 ). If C i - C o

C i x 100 = R ( Eq . 1)Page 123 of 201

pollutant concentrations are to be corrected to 15 percent oxygen and CO 2 concentration is measured in lieu of oxygen concentration measurement, a CO 2 correction factor is needed.

Calculate the CO 2 correction factor as described in paragraphs (e)(2)(i) through (iii) of this section. (i) Calculate the fuel-specific F o value for the fuel burned during the test using values obtained from Method 19,

Section 5.2, and the following equation:

Where:

F o = Fuel factor based on the ratio of oxygen volume to the ultimate CO 2 volume produced by the fuel at zero percent excess air. 0.209 = Fraction of air that is oxygen, percent/100. F d = Ratio of the volume of dry effluent gas to the gross calorific value of the fuel from Method 19, dsm 3 /J (dscf/10 6 Btu). F c = Ratio of the volume of CO 2 produced to the gross calorific value of the fuel from Method 19, dsm 3 /J (dscf/10 6 Btu) (ii) Calculate the CO 2 correction factor for correcting

measurement data to 15 percent oxygen, as follows: Where:

X co2 = CO 2 correction factor, percent. 5.9 = 20.9 percent O 2 - 15 percent O 2 , the defined O 2 correction value, percent. F o = 0.209 F d F c ( Eq . 2)

X CO2 = 5.9 F o ( Eq . 3)Page 124 of 201

(iii) Calculate the CO, THC, and formaldehyde gas concentrations adjusted to 15 percent O 2 using CO 2 as follows:

Where:

%CO 2 = Measured CO 2 concentration measured, dry basis, percent.

* * * * * 17. Section 63.6625 is amended by: a. Revising the first sentence in paragraph (a); b. Revising the first sentence in paragraph (b); c. Revising paragraph (e)(6); and d. Revising paragraph (g) to read as follows: §63.6625 What are my monitoring, installation, collection, operation, and maintenance requirements? (a) If you elect to install a CEMS as specified in Table 5 of this subpart, you must install, operate, and maintain a CEMS to monitor CO and either oxygen or CO 2 according to the requirements in paragraphs (a)(1) through (4) of this section. If you are meeting a requirement to reduce CO emissions, the

CEMS must be installed at both the inlet and outlet of the control device. If you are meeting a requirement to limit the concentration of CO, the CEMS must be installed at the outlet of

the control device. * * * C adj = C d X CO2 % CO 2 ( Eq . 4)Page 125 of 201

* * * * * (b) If you are required to install a continuous parameter monitoring system (CPMS) as specified in Table 5 of this subpart, you must install, operate, and maintain each CPMS according to the requirements in paragraphs (b)(1) through (6)

of this section. * * *

* * * * * (e) * * * (6) An existing non-emergency, non-black start stationary

RICE located at an area source of HAP emissions which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis;

* * * * * (g) If you own or operate an existing non-emergency, non-black start CI engine greater than or equal to 300 HP that is not equipped with a closed crankcase ventilation system, you must comply with either paragraph (g)(1) or paragraph (g)(2) of this section. Owners and operators must follow the manufacturer’s specified maintenance requirements for operating and maintaining the open or closed crankcase ventilation systems and replacing the crankcase filters, or can request the Administrator to approve different maintenance requirements that are as protective as manufacturer requirements. Existing CI engines

located at area sources in areas of Alaska that meet eitherPage 126 of 201

§63.6603(b)(1) or §63.6603(b)(2) do not have to meet the requirements of paragraph (g) of this section. (1) Install a closed crankcase ventilation system that prevents crankcase emissions from being emitted to the atmosphere, or (2) Install an open crankcase filtration emission control system that reduces emissions from the crankcase by filtering the exhaust stream to remove oil mist, particulates and metals.

* * * * * 18. Section 63.6630 is amended by: a. Revising the section heading; b. Revising paragraph (a); c. Adding paragraph (d); and d. Adding paragraph (e) to read as follows: §63.6630 How do I demonstrate initial compliance with the emission limitations, operating limitations, and other requirements? (a) You must demonstrate initial compliance with each emission limitation, operating limitation, and other requirement that applies to you according to Table 5 of this subpart.

* * * * * (d) Non-emergency 4SRB stationary RICE complying with the requirement to reduce formaldehyde emissions by 76 percent or more can demonstrate initial compliance with the formaldehydePage 127 of 201

emission limit by testing for THC instead of formaldehyde. The testing must be conducted according to the requirements in Table 4 of this subpart. The average reduction of emissions of THC determined from the performance test must be equal to or greater than 30 percent. (e) The initial compliance demonstration required for existing non-emergency 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year must be conducted according to the following requirements: (1) The compliance demonstration must consist of at least

three test runs. (2) Each test run must be of at least 15 minute duration, except that each test conducted using the method in appendix A to this subpart must consist of at least one measurement cycle and include at least 2 minutes of test data phase measurement. (3) If you are demonstrating compliance with the CO concentration or CO percent reduction requirement, you must measure CO emissions using one of the CO measurement methods specified in Table 4 of this subpart, or using appendix A to this subpart.Page 128 of 201

(4) If you are demonstrating compliance with the THC percent reduction requirement, you must measure THC emissions using Method 25A of 40 CFR part 60, appendix A. (5) You must measure O 2 using one of the O 2 measurement methods specified in Table 4 of this subpart. Measurements to

determine O 2 concentration must be made at the same time as the

measurements for CO or THC concentration. (6) If you are demonstrating compliance with the CO or THC percent reduction requirement, you must measure CO or THC

emissions and O 2 emissions simultaneously at the inlet and outlet

of the control device. 19. Section 63.6640 is amended by: a. Amending the section heading; b. Revising paragraph (a); c. Revising paragraph (c); and d. Revising paragraph (f) to read as follows: §63.6640 How do I demonstrate continuous compliance with the emission limitations, operating limitations, and other requirements? (a) You must demonstrate continuous compliance with each emission limitation, operating limitation, and other requirements in Tables 1a and 1b, Tables 2a and 2b, Table 2c, and Table 2d to this subpart that apply to you according to methods specified in Table 6 to this subpart.Page 129 of 201

* * * * * (c) The annual compliance demonstration required for existing non-emergency 4SLB and 4SRB stationary RICE with a site rating of more than 500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year must be conducted according to the following requirements: (1) The compliance demonstration must consist of at least

one test run. (2) Each test run must be of at least 15 minute duration, except that each test conducted using the method in appendix A to this subpart must consist of at least one measurement cycle and include at least 2 minutes of test data phase measurement. (3) If you are demonstrating compliance with the CO concentration or CO percent reduction requirement, you must measure CO emissions using one of the CO measurement methods specified in Table 4 of this subpart, or using appendix A to this subpart. (4) If you are demonstrating compliance with the THC percent reduction requirement, you must measure THC emissions using Method 25A of 40 CFR part 60, appendix A. (5) You must measure O 2 using one of the O 2 measurement methods specified in Table 4 of this subpart. Measurements toPage 130 of 201

determine O 2 concentration must be made at the same time as the

measurements for CO or THC concentration. (6) If you are demonstrating compliance with the CO or THC percent reduction requirement, you must measure CO or THC

emissions and O 2 emissions simultaneously at the inlet and outlet

of the control device. (7) If the results of the annual compliance demonstration show that the emissions exceed the levels specified in Table 6 of this subpart, the stationary RICE must be shut down as soon as safely possible, and appropriate corrective action must be taken (e.g., repairs, catalyst cleaning, catalyst replacement). The stationary RICE must be retested within 7 days of being restarted and the emissions must meet the levels specified in Table 6 of this subpart. If the retest shows that the emissions continue to exceed the specified levels, the stationary RICE must again be shut down as soon as safely possible, and the stationary RICE may not operate, except for purposes of startup and testing, until the owner/operator demonstrates through testing that the emissions do not exceed the levels specified in Table 6 of this subpart.

* * * * * (f) If you own or operate an emergency stationary RICE, you must operate the emergency stationary RICE according to the requirements in paragraphs (f)(1) through (4) of this section.Page 131 of 201

In order for the engine to be considered an emergency stationary RICE under this subpart, any operation other than emergency operation, maintenance and testing, emergency demand response, and operation in non-emergency situations for 50 hours per year, as described in paragraphs (f)(1) through (4) of this section, is prohibited. If you do not operate the engine according to the requirements in paragraphs (f)(1) through (4) of this section, the engine will not be considered an emergency engine under this subpart and must meet all requirements for non-emergency engines. An engine that exceeds the calendar year limitations on non-emergency operation will be considered a non-emergency engine and subject to the requirements for non-emergency engines for the remaining life of the engine. (1) There is no time limit on the use of emergency stationary RICE in emergency situations. (2) You may operate your emergency stationary RICE for any combination of the purposes specified in paragraphs (f)(2)(i) through (iii) of this section for a maximum of 100 hours per calendar year. Any operation for non-emergency situations as allowed by paragraphs (f)(3) and (4) of this section counts as part of the 100 hours per calendar year allowed by this paragraph (f)(2). (i) Emergency stationary RICE may be operated for maintenance checks and readiness testing, provided that thePage 132 of 201

tests are recommended by federal, state or local government, the manufacturer, the vendor, the regional transmission authority or equivalent balancing authority and transmission operator, or the insurance company associated with the engine. The owner or operator may petition the Administrator for approval of

additional hours to be used for maintenance checks and readiness testing, but a petition is not required if the owner or operator maintains records indicating that federal, state, or local standards require maintenance and testing of emergency RICE beyond 100 hours per calendar year. (ii) Emergency stationary RICE may be operated for emergency demand response for periods in which the regional transmission authority or equivalent balancing authority and transmission operator has declared an Energy Emergency Alert Level 2 (EEA Level 2) as defined in the North American Electric Reliability Corporation Reliability Standard EOP-002-3, Capacity and Energy Emergencies. (iii) Emergency stationary RICE may be operated for periods where there is a deviation of voltage or frequency of 5 percent or greater below standard voltage or frequency. (3) Emergency stationary RICE located at major sources ofHAP may be operated for up to 50 hours per calendar year in nonemergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendarPage 133 of 201

year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section. The 50 hours per year for non-emergency situations cannot be used for peak shaving or non-emergency demand response, or to generate income for a facility to supply power to an electric grid or otherwise supply power as part of a financial arrangement with another entity. (4) Existing emergency stationary RICE located at area sources of HAP may be operated for up to 50 hours per calendar year in non-emergency situations. The 50 hours of operation in non-emergency situations are counted as part of the 100 hours per calendar year for maintenance and testing and emergency demand response provided in paragraph (f)(2) of this section.(i) Prior to April 16, 2017, the 50 hours per year for nonemergency situations can be used for peak shaving or nonemergency demand response to generate income for a facility, or to otherwise supply power as part of a financial arrangement with another entity if engines is operated as part of a peak shaving (load management program) with the local distribution system operator and the power is provided only to the facility itself or to support the local distribution system. (ii) On or after April 16, 2017, the 50 hours per year for non-emergency situations cannot be used for peak shaving or non-Page 134 of 201

emergency demand response, or to otherwise supply power as part of a financial arrangement with another entity.

* * * * * 20. Section 63.6645 is amended by adding a new paragraph (i) to read as follows:

§63.6645 What notifications must I submit and when?

* * * * * (i) If you own or operate an existing non-emergency CI RICE with a site rating of more than 300 HP located at an area source

of HAP emissions that is certified to the Tier 1 or Tier 2 emission standards in Table 1 of 40 CFR 89.112 and subject to an enforceable state or local standard requiring engine replacement and you intend to meet management practices rather than emission limits, as specified in §63.6603(c), you must submit a notification by March 3, 2013, stating that you intend to use the provision in §63.6603(c) and identifying the state or local regulation that the engine is subject to. 21. Section 63.6675 is amended by: a. Adding in alphabetical order the definition of Alaska Railbelt Grid; b. Revising the definition of Emergency stationary RICE ;

and c. Adding in alphabetical order the definition of Remote stationary RICE to read as follows.Page 135 of 201

§63.6675 What definitions apply to this subpart?

Alaska Railbelt Grid means the service areas of the six regulated public utilities that extend from Fairbanks to Anchorage and the Kenai Peninsula. These utilities are Golden Valley Electric Association; Chugach Electric Association; Matanuska Electric Association; Homer Electric Association; Anchorage Municipal Light & Power; and the City of Seward Electric System.

* * * * * Emergency stationary RICE means any stationary reciprocating internal combustion engine that meets all of the criteria in paragraphs (1) through (3) of this definition. All emergency stationary RICE must comply with the requirements specified in §63.6640(f) in order to be considered emergency stationary RICE. If the engine does not comply with the requirements specified in §63.6640(f), then it is not considered to be an emergency stationary RICE under this subpart. (1) The stationary RICE is operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary RICE used to produce power for critical networks or equipment (including power supplied to portions of a facility) when electric power from the local utility (or the normal power source, if the facility runs on its own powerPage 136 of 201

production) is interrupted, or stationary RICE used to pump water in the case of fire or flood, etc. (2) The stationary RICE is operated under limited circumstances for situations not included in paragraph (1) of this definition, as specified in §63.6640(f). (3) The stationary RICE operates as part of a financial arrangement with another entity in situations not included in paragraph (1) of this definition only as allowed in §63.6640(f)(2)(ii) or (iii) and §63.6640(f)(4)(i).

* * * * * Remote stationary RICE means stationary RICE meeting any of the following criteria: (1) Stationary RICE located in an offshore area that is beyond the line of ordinary low water along that portion of the

coast of the United States that is in direct contact with the open seas and beyond the line marking the seaward limit of

inland waters. (2) Stationary RICE located on a pipeline segment that meets both of the criteria in paragraphs (2)(i) and (ii) of this

definition.

(i) A pipeline segment with 10 or fewer buildings intended for human occupancy within 220 yards (200 meters) on either side of the centerline of any continuous 1-mile (1.6 kilometers) Formatted: Space Before: Auto, After: AutoPage 137 of 201

length of pipeline , and for which buildings with four or more stories above ground are not prevalent within this area. Each separate dwelling unit in a multiple dwelling unit building is counted as a separate building intended for human occupancy.

(ii) The pipeline segment does not lie within 100 yards (91 meters) of either a building or a small, well-defined outside area (such as a playground, recreation area, outdoor theater, or other place of public assembly) that is occupied by 20 or more persons on at least 5 days a week for 10 weeks in any 12-month period. The days and weeks need not be consecutive. The building or area is considered occupied for a full day if it is occupied for any portion of the day. (iii) For purposes of this paragraph (2), the term pipeline segment means all parts of those physical facilities through which gas moves in transportation, including but not limited to pipe, valves, and other appurtenance attached to pipe, compressor units, metering stations, regulator stations, delivery stations, holders, and fabricated assemblies. Stationary RICE located within 50 yards (46 m) of the pipeline segment providing power for equipment on a pipeline segment are part of the pipeline segment. Transportation of gas means the gathering, transmission, or distribution of gas by pipeline, or the storage of gas. A building is intended for human occupancy Deleted:

. Comment [A9]: CEQ: To remain consistent with DOT regs, this would be a Class 4 area.Page 138 of 201

if its primary use is for a purpose involving the presence of

humans. (3) Stationary RICE that are not located on gas pipelines and that have 5 or fewer buildings intended for human occupancy within a 0.25 mile radius around the engine. A building is intended for human occupancy if its primary use is for a purpose involving the presence of humans.

* * * * * 22. Table 1b to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 1b to Subpart ZZZZ of Part 63. Operating Limitations for Existing, New, and Reconstructed SI 4SRB Stationary RICE >500 HP**  **Located at a Major Source of HAP Emissions** As stated in §§63.6600, 63.6603, 63.6630 and 63.6640, you must comply with the following operating limitations for existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions:

**For each... Y**  **ou must meet the following operating limitation, except**  **during periods of startup...** 1. existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to reduce formaldehyde emissions by 76 percent or more (or by 75 percent or more, if applicable) and using NSCR;

or existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water at 100 percent load plus or minus 10 percent from the pressure drop across the catalyst measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 750°F and less than or Comment [A10]: CEQ: for consistency this definition should also apply to paragraph (3).(the definitions in the previous section seem to apply only to paragraph (2).

Formatted TablePage 139 of 201

HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd or less at 15 percent O 2 and using NSCR; equal to 1250°F. 1

2. existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to reduce formaldehyde emissions by 76 percent or more (or by 75 percent or more, if applicable) and not using NSCR;

or existing, new and reconstructed 4SRB stationary RICE >500 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd or less at 15 percent O 2 and not using NSCR. Comply with any operating limitations approved by the Administrator.

1 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.8(f) for a different temperature range. 23. Table 2b to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2b to Subpart ZZZZ of Part 63** 

. **Operating Limitations for New and Reconstructed 2SLB and CI Stationary RICE >500 HP**  **Located at a Major Source of HAP Emissions, New and Reconstructed 4SLB Stationary RICE**  **≥ 250 HP Located at a Major**  **Source of HAP Emissions, Existing CI Stationary RICE >500 HP, and Existing 4SLB Stationary RICE >500 HP Located at an Area**  **Source of HAP Emissions** As stated in §§63.6600, 63.6601, 63.6603, 63.6630, and 63.6640, you must comply with the following operating limitations for newPage 140 of 201

and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions; new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions; and existing CI stationary RICE >500 HP **:**

**For each... Y**  **ou must meet the following operating limitation, except**  **during periods of startup...** 1. New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to reduce CO emissions and using an oxidation catalyst;

and

New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust and using an oxidation catalyst a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water at 100 percent load plus or minus 10 percent from the pressure drop across the catalyst that was measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 450°F and less than or equal to 1350°F. 1Page 141 of 201

2. Existing CI stationary RICE >500 HP complying with the requirement to limit or reduce the concentration of CO in the stationary RICE exhaust and using an oxidation catalyst a. maintain your catalyst so that the pressure drop across the catalyst does not change by more than 2 inches of water from the pressure drop across the catalyst that was measured during the initial performance test; and b. maintain the temperature of your stationary RICE exhaust so that the catalyst inlet temperature is greater than or equal to 450°F and less than or equal to 1350°F. 1Page 142 of 201

3. New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to reduce CO emissions and not using an oxidation catalyst;

and

New and reconstructed 2SLB and CI stationary RICE >500 HP located at a major source of HAP emissions and new and reconstructed 4SLB stationary RICE ≥ 250 HP located at a major source of HAP emissions complying with the requirement to limit the concentration of formaldehyde in the stationary RICE exhaust and not using an oxidation catalyst

and existing CI stationary RICE >500 HP complying with the requirement to limit or reduce the concentration of CO in the stationary RICE exhaust and not using an oxidation catalyst Comply with any operating limitations approved by the Administrator.

1 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.8(f) for a different temperature range. 24. Table 2c to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2c to Subpart ZZZZ of Part 63** 

. **Requirements for Existing Compression Ignition Stationary RICE Located at a Major Source**  **of HAP Emissions and Existing Spark Ignition Stationary RICE ≤**  **500 HP Located at a Major Source of HAP Emissions**Page 143 of 201

As stated in §§63.6600, 63.6602, and 63.6640, you must comply with the following requirements for existing compression ignition stationary RICE located at a major source of HAP emissions and existing spark ignition stationary RICE ≤ 500 HP located at a major source of HAP emissions **:**

**F or each... You must meet the**  **following requirement, except during periods of**  **startup... D**  **uring periods of startup you must...** 

1. Emergency stationary CI RICE and black start stationary CI RICE. 1 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 2 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 3 Minimize the engine’s time spent a t idle and minimize t he engine’s startup t ime at startup to a

period needed for a ppropriate and safe loading of the engine, not to exceed 30 minutes, a fter which time the non- s tartup emission

limitations apply. 32. NonEmergency, nonblack start stationary CI RICE <100 HP. a. Change oil and filter every 1,000 hours of operation or annually, whichever comes first 2 ; b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 33. NonEmergency, nonblack start CI stationary RICE 100< HP< 300 HP. Limit concentration of CO in the stationary RICE exhaust to 230 ppmvd or less at 15 percent O 2 .Page 144 of 201

4. NonEmergency, nonblack start CI stationary RICE 300<HP< 500. a. Limit concentration of CO in the stationary RICE exhaust to 49 ppmvd or less at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more.5. NonEmergency, nonblack start stationary CI RICE >500 HP. a. Limit concentration of CO in the stationary RICE exhaust to 23 ppmvd or less at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 6. Emergency stationary SI RICE and black start stationary SI RICE. 1 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 2 b. Inspect spark plugs every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 37. NonEmergency, nonblack start stationary SI RICE <100 HP that are not 2SLB stationary RICE. a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first 2 ; b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 3Page 145 of 201

8. NonEmergency, nonblack start 2SLB stationary SI RICE <100 HP. a. Change oil and filter every 4,320 hours of operation or annually, whichever comes first 2 ; b. Inspect spark plugs every 4,320 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 4,320 hours of operation or annually, whichever comes first, and replace as necessary. 39. Nonemergency, nonblack start 2SLB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of CO in the stationary RICE exhaust to 225 ppmvd or less at 15 percent O 210. Nonemergency, nonblack start 4SLB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of CO in the stationary RICE exhaust to 47 ppmvd or less at 15 percent O 211. Nonemergency, nonblack start 4SRB stationary RICE 100 ≤ HP ≤ 500 Limit concentration of formaldehyde in the stationary RICE exhaust to 10.3 ppmvd or less at 15 percent O 212. Nonemergency, nonblack start stationary RICE 100 ≤ HP ≤ 500 which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis Limit concentration of CO in the stationary RICE exhaust to 177 ppmvd or less at 15 percent O 2

1 If an emergency engine is operating during an emergency and it is not possible to shut down the engine in order to perform the work practice requirements on the schedule required in Table 2c of this subpart, or if performing the work practice on thePage 146 of 201

required schedule would otherwise pose an unacceptable risk under federal, state, or local law, the work practice can be delayed until the emergency is over or the unacceptable risk under federal, state, or local law has abated. The work practice should be performed as soon as practicable after the emergency has ended or the unacceptable risk under federal, state, or local law has abated. Sources must report any failure to perform the work practice on the schedule required and the federal, state or local law under which the risk was deemed unacceptable. 2 Sources have the option to utilize an oil analysis program as described in §63.6625(i) in order to extend the specified oil change requirement in Table 2c of this subpart. 3 Sources can petition the Administrator pursuant to the requirements of 40 CFR 63.6(g) for alternative work practices. 25. Table 2d to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 2d to Subpart ZZZZ of Part 63** 

. **Requirements for Existing Stationary RICE Located at Area Sources of HAP Emissions**  As stated in §§63.6603 and 63.6640, you must comply with the following requirements for existing stationary RICE located at area sources of HAP emissions **:**

**For each... You must meet the following**  **requirement, except during periods of**  **startup... During periods of**  **startup you must...**

1. Non-Emergency, non-black start CI stationary RICE < 300 HP a. Change oil and filter every 1,000 hours of operation or annually, whichever comes first; 1 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; c. Inspect all hoses and belts every 500 hours of Minimize the engine’s time spent at idle and minimize the engine’s startup time at startup to a period needed for appropriate and safe loading of the engine, not to exceed 30 minutes, after which time the non-startup emission limitations apply.Page 147 of 201

operation or annually, whichever comes first, and replace as necessary. 2. Non-Emergency, non-black start CI stationary RICE 300<HP< 500 a. Limit concentration of CO in the stationary RICE exhaust to 49 ppmvd at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 3. Non-Emergency, non-black start CI stationary RICE >500 HP a. Limit concentration of CO in the stationary RICE exhaust to 23 ppmvd at 15 percent O 2 ; or b. Reduce CO emissions by 70 percent or more. 4. Emergency stationary CI RICE and black start stationary CI RICE 2 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 1 b. Inspect air cleaner every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary.Page 148 of 201

5. Emergency stationary SI RICE; black start stationary SIRICE; nonemergency, nonblack start 4SLB stationary RICE >500 HP that operate 24 hours or less per calendar year; non-emergency, non-black start 4SRB stationary RICE >500 HP that operate 24 hours or less per calendar year 2 a. Change oil and filter every 500 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,000 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 500 hours of operation or annually, whichever comes first, and replace as necessary. 6. Non-emergency, non-black start 2SLB stationary RICE a. Change oil and filter every 4,320 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 4,320 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 4,320 hours of operation or annually, whichever comes first, and replace as necessary.Page 149 of 201

7. Non-emergency, non-black start 4SLB stationary RICE ≤ 500 HP; nonemergency, nonblack start 4SLB remote stationary RICE >500 HP a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 8. Non-emergency, non-black start 4SLB stationary RICE >500 HP that are not remote stationary RICE and that operate more than 24 hours per calendar year Install an oxidation catalyst to reduce HAP emissions from the stationary RICEPage 150 of 201

9. Non-emergency, non-black start 4SRB stationary RICE ≤ 500 HP; nonemergency, nonblack start 4SRB remote stationary RICE >500 HP a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 10. Non-emergency, non-black start 4SRB stationary RICE >500 HP that are not remote stationary RICE and that operate more than 24 hours per calendar year Install NSCR to reduce HAP emissions from the stationary RICEPage 151 of 201

11. Non-emergency, non-black start stationary RICE which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis a. Change oil and filter every 1,440 hours of operation or annually, whichever comes first; 1 b. Inspect spark plugs every 1,440 hours of operation or annually, whichever comes first, and replace as necessary; and c. Inspect all hoses and belts every 1,440 hours of operation or annually, whichever comes first, and replace as necessary. 1 Sources have the option to utilize an oil analysis program as described in §63.6625(i) in order to extend the specified oil change requirement in Table 2d of this subpart. 2 If an emergency engine is operating during an emergency and it is not possible to shut down the engine in order to perform the management practice requirements on the schedule required in Table 2d of this subpart, or if performing the management practice on the required schedule would otherwise pose an unacceptable risk under federal, state, or local law, the management practice can be delayed until the emergency is over or the unacceptable risk under federal, state, or local law has abated. The management practice should be performed as soon as practicable after the emergency has ended or the unacceptable risk under federal, state, or local law has abated. Sources must report any failure to perform the management practice on the schedule required and the federal, state or local law under which the risk was deemed unacceptable. 26. Table 3 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 3 to Subpart ZZZZ of Part 63. Subsequent Performance Tests** As stated in §§63.6615 and 63.6620, you must comply with the following subsequent performance test requirements:Page 152 of 201

**For each... Complying with the**  **requirement to... Y**  **ou must...**

1. New or reconstructed 2SLB stationary RICE >500 HP located at major sources; new or reconstructed 4SLB stationary RICE ≥ 250 HP located at major sources; and new or reconstructed CI stationary RICE >500 HP located at major sources. Reduce CO emissions and not using a CEMS Conduct subsequent performance tests semiannually 1

.

2. 4SRB stationary RICE ≥ 5,000 HP located at major sources. Reduce formaldehyde emissions Conduct subsequent performance tests semiannually 1

. 3. Stationary RICE >500 HP located at major sources and new or reconstructed 4SLB stationary RICE 250 ≤ HP ≤ 500 located at major sources. Limit the concentration of formaldehyde in the stationary RICE exhaust Conduct subsequent performance tests semiannually 1

.

4. Existing nonemergency, nonblack start CI stationary RICE >500 HP that are not limited use stationary RICE Limit or reduce CO emissions and not using a CEMS Conduct subsequent performance tests every 8,760 hrs or 3 years, whichever comes first.

5. Existing nonemergency, nonblack start CI stationary RICE >500 HP that are limited use stationary RICE Limit or reduce CO emissions and not using a CEMS Conduct subsequent performance tests every 8,760 hrs or 5 years, whichever comes first.

1 After you have demonstrated compliance for two consecutive tests, you may reduce the frequency of subsequent performance tests to annually. If the results of any subsequent annual performance test indicate the stationary RICE is not inPage 153 of 201

compliance with the CO or formaldehyde emission limitation, or you deviate from any of your operating limitations, you must resume semiannual performance tests. 27. Table 4 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 4 to Subpart ZZZZ of Part 63. Requirements for Performance Tests**  As stated in §§63.6610, 63.6611, 63.6612, 63.6620, and 63.6640, you must comply with the following requirements for performance tests for stationary RICE:

**For each...**  **Complying with the**  **requirement to...**  **You must...**  **Using... According to the**  **following requirements** 

**...** 1. 2SLB, 4SLB, and CI stationary RICE a. reduce CO emissions i. Measure the O 2 at the inlet and outlet of the control device; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522-00 (2005) a (incorpo rated by referenc e, see §63.14). (a) Measurements to determine O 2 must be made at the same time as the measurements for COconcentration.

ii. Measure the CO at the inlet and the outlet of the control device (1) ASTM D6522-00 (2005) a,b (incorpo ra-ted by referenc e, see §63.14) (a) The COconcentration must be at 15 percent O 2 , dry basis.Page 154 of 201

or Method 10 of 40 CFR part 60, appendix A. 2. 4SRB stationary RICE a. reduce formaldehyd e emissions i. Select the sampling port location and the number of traverse points; and (1) Method 1 or 1A of 40 CFR part 60, appendix A §63.7(d) (1)(i) (a) sampling sites must be located at the inlet and outlet of the control device.

ii. Measure O 2 at the inlet and outlet of the control device; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00(2005)

. (a) measurements to determine O 2 concentratio n must be made at the same time as the measurements for formaldehyde or THC concentratio n.Page 155 of 201

iii. Measure moisture content at the inlet and outlet of the control device; and (1) Method 4 of 40 CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D 6348-03 (a) measurements to determine moisture content must be made at the same time and location as the measurements for formaldehyde or THC concentratio n. iv. If demonstra ting complianc e with the formaldeh yde percent reduction requireme nt, measureformaldehyde at the inlet and the outlet of the control device (1) Method 320 or 323 of 40 CFR part 63, appendix A; or ASTM D6348- 03 c , provided in ASTM D6348-03 Annex A5 (Analyte Spiking Techniqu e), the percent R must be greater than or equal to 70 and less than or equal to 130. (a) formaldehydeconcentration must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.Page 156 of 201

v. If demonstra ting complianc e with the THC percent reduction requireme nt, measure THC at the inlet and the outlet of the control device (1) Method 25A of 40 CFR part 60, appendix A (a) THCconcentration must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

3. Stationary RICE a. limit theconcentration offormaldehyde or CO in the stationary RICE exhaust i. Select the sampling port location and the number of traverse points; and (1) Method 1 or 1A of 40 CFR part 60, appendix A §63.7(d) (1)(i) (a) if using a control device, the sampling site must be located at the outlet of the control device. ii. Determine the O 2 concentra tion of the stationar y RICE exhaust at the sampling port location; and (1) Method 3 or 3A or 3B of 40 CFR part 60, appendix A, or ASTM Method D6522- 00(2005)

. (a) measurements to determine O 2 concentration must be made at the same time and location as the measurements for formaldehyde or COconcentration. iii. Measure moisture (1) Method 4 of 40 (a) measurements to determinePage 157 of 201

content of thestationary RICE exhaust at the sampling port location; and CFR part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A, or ASTM D 6348-03 moisture content must be made at the same time and location as the measurements for formaldehyde or CO concentratio n. iv. Measureformaldehyde at the exhaust of thestationary RICE; or (1) Method 320 or 323 of 40 CFR part 63, appendix A; or ASTM D6348- 03 c , provided in ASTM D6348-03 Annex A5 (Analyte Spiking Techniqu e), the percent R must be greater than or equal to 70 and less than or equal to 130. (a) Formaldehyde concentratio n must be at 15 percent O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

v. measure CO at the exhaust (1) Method 10 of 40 CFR part (a) CO concentratio n must be at 15 percentPage 158 of 201

of thestationary RICE. 60, appendix A, ASTM Method D6522-00 (2005) a , Method 320 of 40 CFR part 63, appendix A, or ASTM D6348- 03. O 2 , dry basis. Results of this test consist of the average of the three 1-hour or longer runs.

a You may obtain a copy of ASTM-D6522-00 (2005) from at least one of the following addresses: American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428- 2959, or University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. ASTM-D6522-00 (2005) may be used to test both CI and SI stationary RICE. b You may also use Method 320 of 40 CFR part 63, appendix A, or ASTM D6348-03.

c You may obtain a copy of ASTM-D6348-03 from at least one of the following addresses: American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428-2959, or University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. 28. Table 5 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 5 to Subpart ZZZZ of Part 63. Initial Compliance with Emission Limitations and Operating Limitations**  As stated in §§63.6612, 63.6625 and 63.6630, you must initially comply with the emission and operating limitations as required by the following:

**For each . . . Complying with the**  **requirement to . . .**  **You have demonstrated**  **initial compliance if . . .** Page 159 of 201

1. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions and using oxidation catalyst, and using a CPMS i. The average reduction of emissions of CO determined from the initial performance test achieves the required CO percent reduction; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test.Page 160 of 201

2. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, using oxidation catalyst, and using a CPMS i. The average CO concentration determined from the initial performance test is less than or equal to the CO emission limitation; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial p erformance test. 3. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions and not using oxidation catalyst i. The average reduction of emissions of CO determined from the initial performance test achieves the required CO percent reduction; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded thePage 161 of 201

approved operating parameters (if any) during the initial performance test. 4. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, and not using oxidation catalyst i. The average CO concentration determined from the initial performance test is less than or equal to the CO emission limitation; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test.Page 162 of 201

5. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Reduce CO emissions, and using a CEMS i. You have installed a CEMS to continuously monitor CO and either O 2 or CO 2 at both the inlet and outlet of the oxidation catalyst according to the requirements in §63.6625(a); and

ii. You have conducted a performance evaluation of your CEMS using PS 3 and 4A of 40 CFR part 60, appendix B; and iii. The average reduction of CO calculated using §63.6620 equals or exceeds the required percent reduction. The initial test comprises the first 4-hour period after successful validation of the CEMS. Compliance is based on the average percent reduction achieved during the 4-hour period.Page 163 of 201

6. Non-emergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP located at an area source of HAP. a. Limit the concentration of CO, and using a CEMS i. You have installed a CEMS to continuously monitor CO and either O 2 or CO 2 at the outlet of the oxidation catalyst according to the requirements in §63.6625(a); and

ii. You have conducted a performance evaluation of your CEMS using PS 3 and 4A of 40 CFR part 60, appendix B; and iii. The average concentration of CO calculated using §63.6620 is less than or equal to the CO emission limitation. The initial test comprises the first 4-hour period after successful validation of the CEMS. Compliance is based on the average concentration measured during the 4-hour period. 7. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and u sing NSCR i. The average reduction of emissions of formaldehyde determined from the initial performance test is equal to or greater than the required formaldehydePage 164 of 201

percent reduction, or the average reduction of emissions of THC determined from the initial performance test is equal to or greater than 30 percent; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test. 8. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and not using NSCR i. The average reduction of emissions of formaldehyde determined from the initial performance test is equal to or greater than the required formaldehyde percent reduction; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according toPage 165 of 201

the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test. 9. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Limit the concentration of formaldehyde i n the stationary RICE exhaust and using oxidation catalyst or NSCR i. The average formaldehyde concentration, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde emission limitation; and

ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b); and

iii. You have recorded the catalyst pressure drop and catalyst inlet temperature during the initial performance test. 10. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE a. Limit the concentration of formaldehyde in the stationary RICE exhaust and not using oxidation catalyst or NSCR i. The average formaldehyde concentration, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde e missionPage 166 of 201

250 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency 4SRB stationary RICE >500 HP located at a major source of HAP. limitation; and

ii. You have installed a CPMS to continuously monitor operating parameters approved by the Administrator (if any) according to the requirements in §63.6625(b); and

iii. You have recorded the approved operating parameters (if any) during the initial performance test.11. Existing nonemergency stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency stationary CI RICE 300<HP ≤ 500 located at an area source of HAP. a. Reduce CO emissions. i. The average reduction of emissions of CO or formaldehyde, as applicable determined from the initial performance test is equal to or greater than the required CO or formaldehyde, as applicable, percent reduction.12. Existing nonemergency stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP, andexisting nonemergency stationary CI RICE 300<HP ≤ 500 located at an area source of HAP. a. Limit the concentration of formaldehyde or CO in the stationary RICE exhaust. i. The average formaldehyde or CO concentration, as applicable, corrected to 15 percent O 2 , dry basis, from the three test runs is less than or equal to the formaldehyde or CO emission limitation, as applicable.13. Existing nonemergency 4SLB a. Install an oxidation catalyst i. You have conducted anPage 167 of 201

stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year initial compliance demonstration as specified in §63.6630(e) to show that the average reduction of emissions of CO is 93 percent or more, or the average CO concentration is less than or equal to 47 ppmvd at 15 percent O 2 ii. You have installed a CPMS to continuously monitor catalyst inlet temperature according to the requirements in §63.6625(b), or you have installed equipment to automatically shut down the engine if the catalyst inlet temperature exceeds 1350°F.14. Existing nonemergency 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install NSCR i. You have conducted an initial compliance demonstration as specified in §63.6630(e) to show that the average reduction of emissions of CO is 75 percent or more, or the average reduction of emissions of THC is 30 percent or more ii. You have installed a CPMS to continuously monitor catalystPage 168 of 201

inlet temperature according to the requirements in §63.6625(b), or you have installed equipment to automatically shut down the engine if the catalyst inlet temperature exceeds 1250°F.

29. Table 6 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 6 to Subpart ZZZZ of Part 63. Continuous Compliance with Emission Limitations, Operating Limitations, Work Practices, and**  **Management Practices** As stated in §63.6640, you must continuously comply with the emissions and operating limitations and work or management practices as required by the following:

**For each . . . Complying with the**  **requirement to . .**

**. You must**  **demonstrate continuous**  **compliance by**

**. . .** 1. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, and new orreconstructed nonemergency CI a. Reduce CO emissions and using an oxidation catalyst, and using a CPMS i. Conducting semiannual performance tests for CO to demonstrate that the required CO percent reduction is achieved a ; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 169 of 201

stationary RICE >500 HP located at a major source of HAP. i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 2. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, and new orreconstructed nonemergency CI stationary RICE >500 HP located at a major source of HAP. a. Reduce CO emissions and not using an oxidation catalyst, and using a CPMS i. Conducting semiannual performance tests for CO to demonstrate that the required CO percent reduction is achieved a ; and ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining thePage 170 of 201

4-hour rolling a verages within the operating l imitations for the operating parameters established during the performance test. 3. New orreconstructed nonemergency 2SLB stationary RICE >500 HP located at a major source of HAP, new orreconstructed nonemergency 4SLB stationary RICE ≥ 250 HP located at a major source of HAP, new orreconstructed nonemergency stationary CI RICE >500 HP located at a major source of HAP, and existing non-emergency stationary CI RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and using a CEMS i. Collecting the monitoring data according to §63.6625(a), reducing the measurements to 1- hour averages, calculating the percent reduction or concen t ration of CO emissions according to §63.6620; and ii. Demonstrating that the catalyst achieves the required percent reduction of CO emissions over the 4-hour averaging p eriod, or that the emission remain at or below the CO concentration limit; and iii. Conducting an a nnual RATA of your C EMS using PS 3 and 4A of 40 CFR part 60, appendix B, as well as daily and periodic data quality checks in accordance with 40 CFR part 60, appendix F,Page 171 of 201

procedure 1. 4. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and using NSCR i. Collecting the catalyst inlet temperature data according to §63.6625(b); and ii. reducing these data to 4-hour rolling averages; and iii. Maintaining the 4-hour rolling averag e s within the operating l imitations for the catalyst inlet temperature; and iv. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 5. Non-emergency 4SRB stationary RICE >500 HP located at a major source of HAP. a. Reduce formaldehyde emissions and not using NSCR i. Collecting the approved operating parameter (if any) data according to §63.6625(b); and ii. Reducing these data to 4-hour rolling averages; and iii. Maintaining the 4-hour rolling a verages within thePage 172 of 201

operating l imitations for the operating parameters established during the performance test. 6. Non-emergency 4SRB stationary RICE with a brake HP ≥ 5,000 located at a major source of HAP. a. Reduce formaldehyde emissions Conducting semiannual performance tests f or formaldehyde to demonstrate that the required formaldehyde percent reduction is achieved, or to demonstrate that the average reduction of emissions of THC d etermined from the p erformance test is e qual to or greater than 30 percent. a 7. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP and new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP. a. Limit the concentration of formaldehyde i n the stationary RICE exhaust and using oxidation catalyst or NSCR i. Conducting semiannual performance tests f or formaldehyde to demonstrate that your emissions remain at or below the formaldehyde concentration limit a ; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining thePage 173 of 201

4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 8. New orreconstructed nonemergency stationary RICE >500 HP located at a major source of HAP and new orreconstructed nonemergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP. a. Limit the concentration of formaldehyde in the stationary RICE exhaust and not using oxidation catalyst or NSCR i. Conducting semiannual performance tests f or formaldehyde to demonstrate that your emissions remain at or below the formaldehyde concentration limit a ; and ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for thePage 174 of 201

operating parameters established during the performance test. 9. Existing emergency and black start stationary RICE ≤ 500 HP located at a major source ofHAP, existing nonemergency stationary RICE <100 HP located at a major source of HAP, existing emergency and black start stationary RICE located at an area source of HAP,existing nonemergency stationary CI RICE ≤ 300 HP located at an area source ofHAP, existing nonemergency 2SLB stationary RICE located at an area source of HAP,existing nonemergency stationary SI RICE located at an area source of HAP which combusts landfill or digester gas equivalent to 10 percent or more of the gross heat input on an annual basis, existing non-emergency 4SLB and 4SRB a. Work or Management practices. i. Operating and maintaining the stationary RICE according to the manufacturer’s emission-related operation and maintenance instructions; or ii. Develop and follow your own maintenance plan which must provide to the extent p racticable for the maintenance and operation of the engine in a manner consistent with good air pollution control practice for minimizing emissions.Page 175 of 201

stationary RICE ≤ 500 HP located at an area source ofHAP, existing nonemergency 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that operate 24 hours or less per calendar year, andexisting nonemergency 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that are remote stationary RICE. 10. Existing stationary CI RICE >500 HP that are not limited use stationary RICE. a. Reduce CO emissions, or l i mit the concentration of CO in the stationary RICE exhaust, and using oxidation catalyst i. Conducting performance tests every 8,760 hours or 3 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 176 of 201

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 11. Existing stationary CI RICE >500 HP that are not limited use stationary RICE. a. Reduce CO emissions, or l i mit the concentration of CO in the stationary RICE exhaust, and not using oxidation catalyst i. Conducting performance tests every 8,760 hours or 3 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; andPage 177 of 201

ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating l imitations for the operating parameters established during the performance test. 12. Existing limited use CI stationary RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and using an oxidation catalyst i. Conducting performance tests every 8,760 hours or 5 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; and ii. Collecting the catalyst inlet temperature data according to §63.6625(b); andPage 178 of 201

i ii. Reducing these data to 4-hour rolling averages; and iv. Maintaining th e 4-hour rolling a verages within the operating l imitations for the catalyst inlet temperature; and v. Measuring the pressure drop a cross the catalyst once per month and demonstrating that the pressure drop a cross the catalyst is within the operating limitation established during the performance test. 13. Existing limited use CI stationary RICE >500 HP. a. Reduce CO emissions or limit the concentration of CO in the stationary RICE exhaust, and not using an oxidation catalyst i. Conducting performance tests every 8,760 hours or 5 years, whichever comes first, for CO or formaldehyde, as appropriate, to demonstrate that the required CO or formaldehyde, as appropriate, percent reduction is achieved or t hat your emissions remain at or below the CO or formaldehyde concentration limit; andPage 179 of 201

ii. Collecting the approved operating parameter (if any) data according to §63.6625(b); and

i ii. Reducing these data to 4-hour rolling averages; and

i v. Maintaining the 4-hour rolling a verages within the operating limita t ions for the operating parameters established during the performance test.14. Existing nonemergency 4SLB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install an oxidation catalyst i. Conducting annual compliance demonstrations as specified in §63. 6 640(c) to show that the average reduction of emissions of CO is 9 3 percent or more, or the average CO concentration is less than or equal to 47 ppmvd at 15 percent O 2 ; and either ii. Collecting the catalyst inlet temperature data according to §63.6625(b), r educing these data to 4-hour rolling averages; and maintaining the 4- hour rollingPage 180 of 201

a verages within the operating l imitations for the catalyst inlet temperature; or iii. Immediately shutting down the engine if the catalyst inlet t emperature exceeds 1350° F.15. Existing nonemergency 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that are operated more than 24 hours per calendar year a. Install NSCR i. Conducting annual compliance demonstrations as specified in §63. 6 640(c) to show that the average reduction of emissions of CO is 75 p ercent or more, or the average reduction of e missions of THC is 30 percent or more ; and either ii. Collecting the catalyst inlet temperature data according to §63.6625(b), r educing these data to 4-hour rolling averages; and maintaining the 4- hour rolling a verages within the operating l imitations for the catalyst inlet temperature; or iii. Immediately shutting down the engine if the catalyst inlet t emperature exceeds 1250° F.Page 181 of 201

a After you have demonstrated compliance for two consecutive tests, you may reduce the frequency of subsequent performance tests to annually. If the results of any subsequent annual performance test indicate the stationary RICE is not in compliance with the CO or formaldehyde emission limitation, or you deviate from any of your operating limitations, you must resume semiannual performance tests. 30. Table 7 to Subpart ZZZZ of Part 63 is revised to read

as follows: **Table 7 to Subpart ZZZZ of Part 63. Requirements for Reports** As stated in §63.6650, you must comply with the following requirements for reports:

**For each . .**

**. You must**  **submit a . .**

**. The report must**  **contain . . . You must submit**  **the report . . .** 1. Existingnonemergency, non-black start stationary RICE 100 ≤ HP ≤ 500 located at a major source of HAP;existing nonemergency, non-black start stationary CI RICE >500 HP located at a major source of HAP;existing nonemergency 4SRB stationary RICE >500 HP located at a Compliance report a. If there are no deviations from any emission limitations or operating limitations that apply to you, a statement that there were no deviations from the emission limitations or operating limitations during the reporting period. If there were no periods during which the CMS, including CEMS and CPMS,was out-ofcontrol, as specified in §63.8(c)(7), a i. Semiannually according to the requirements in §63.6650(b)(1)- (5) for engines that are not limited use stationary RICE subject to numerical emission limitations; and ii. Annually according to the requirements in §63.6650(b)(6)- (9) for engines that are limited use stationary RICE subject to numerical emission limitations.Page 182 of 201

major source of HAP;existing nonemergency, non-black start stationary CI RICE >300 HP located at an area source of HAP; new or reconstructed non-emergency stationary RICE >500 HP located at a major source of HAP; and new or reconstructed non-emergency 4SLB stationary RICE 250 ≤ HP ≤ 500 located at a major source of HAP statement that there were not periods during which the CMSwas out-ofcontrol during the reporting period; or b. If you had a deviation from any emission limitation or operating limitation during the reporting period, the information in §63.6650(d). If there were periods during which the CMS, including CEMS and CPMS, was out-of-control, as specified in §63.8(c)(7), the information in §63.6650(e); or i. Semiannually according to the requirements in §63.6650(b).

c. If you had a malfunction during the reporting period, the information in §63.6650(c)(4). i. Semiannually according to the requirements in §63.6650(b).

2. New or reconstructed non-emergency stationary RICE that combusts landfill gas or digester gas equivalent to Report a. The fuel flow rate of each fuel and the heating values that were used in your calculations, and you must demonstrate that the percentage i. Annually, according to the requirements in §63.6650.Page 183 of 201

10 percent or more of the gross heat input on an annual basis of heat input provided by landfill gas or digester gas, is equivalent to 10 percent or more of the gross heat input on an annual basis; and b. The operating limits provided in your federally enforceable permit, and any deviations from these limits; and i. See item 2.a.i.

c. Any problems or errors suspected with the meters. i. See item 2.a.i.

3. Existingnonemergency, non-black start 4SLB and 4SRB stationary RICE >500 HP located at an area source of HAP that are not remote stationary RICE and that operate more than 24 hours per calendar year Compliance report a. The results of the annual compliance demonstration, if conducted during the reporting period. i. Semiannually according to the requirements in §63.6650(b)(1)- (5)

31. Appendix A to Subpart ZZZZ of Part 63 is added to read

as follows:Page 184 of 201

**Appendix A Protocol for Using an Electrochemical Analyzer to Determine**  **Oxygen and Carbon Monoxide Concentrations from Certain Engines**

1.0 Scope and Application. What is this Protocol? This protocol is a procedure for using portable electrochemical (EC) cells for measuring carbon monoxide (CO) and oxygen (O 2 )

concentrations in controlled and uncontrolled emissions from existing stationary 4-stroke lean burn and 4-stroke rich burn reciprocating internal combustion engines as specified in the applicable rule. 1.1 Analytes. What does this protocol determine? This protocol measures the engine exhaust gas concentrations of carbon monoxide (CO) and oxygen (O 2 ). **Analyte CAS No.**  **S ensitivity**  Carbon monoxide (CO) 630-08-0 Minimum detectable limit should be 2

percent of the nominal range or 1 ppm, whichever is less restrictive. Oxygen (O 2 ) 7782-44-7

1.2 Applicability. When is this protocol acceptable? This protocol is applicable to 40 CFR part 63, subpart ZZZZ. Because of inherent cross sensitivities of EC cells, you must not apply this protocol to other emissions sources without specific instruction to that effect. 1.3 Data Quality Objectives. How good must my collected data be?Page 185 of 201

Refer to Section 13 to verify and document acceptable analyzer performance. 1.4 Range. What is the targeted analytical range for this protocol? The measurement system and EC cell design(s) conforming to this protocol will determine the analytical range for each gas component. The nominal ranges are defined by choosing up-scale calibration gas concentrations near the maximum anticipated flue gas concentrations for CO and O 2 , or no more than twice the permitted CO level. 1.5 Sensitivity. What minimum detectable limit will this protocol yield for a particular gas component? The minimum detectable limit depends on the nominal range and resolution of the specific EC cell used, and the signal to noise ratio of the measurement system. The minimum detectable limit should be 2 percent of the nominal range or 1 ppm, whichever is

less restrictive. 2.0 Summary of Protocol In this protocol, a gas sample is extracted from an engine exhaust system and then conveyed to a portable EC analyzer for

measurement of CO and O 2 gas concentrations. This method provides measurement system performance specifications and sampling protocols to ensure reliable data. You may use additions to, or modifications of vendor supplied measurement systems (e.g.,Page 186 of 201

heated or unheated sample lines, thermocouples, flow meters, selective gas scrubbers, etc.) to meet the design specifications of this protocol. Do not make changes to the measurement system from the as-verified configuration (Section 3.12).

3.0 Definitions

3.1 Measurement System . The total equipment required for the

measurement of CO and O 2 concentrations. The measurement system consists of the following major subsystems:

3.1.1 Data Recorder . A strip chart recorder, computer or digital recorder for logging measurement data from the analyzer output. You may record measurement data from the digital data display manually or electronically. 3.1.2 Electrochemical (EC) Cell . A device, similar to a fuel cell, used to sense the presence of a specific analyte and generate an electrical current output proportional to the analyte concentration.

3.1.3 Interference Gas Scrubber . A device used to remove or neutralize chemical compounds that may interfere with the selective operation of an EC cell. 3.1.4 Moisture Removal System . Any device used to reduce the concentration of moisture in the sample stream so as to protect the EC cells from the damaging effects of condensation and to minimize errors in measurements caused by the scrubbing of soluble gases.Page 187 of 201

3.1.5 Sample Interface . The portion of the system used for one or more of the following: sample acquisition; sample transport; sample conditioning or protection of the EC cell from any degrading effects of the engine exhaust effluent; removal of particulate matter and condensed moisture. 3.2 Nominal Range . The range of analyte concentrations over which each EC cell is operated (normally 25 percent to 150 percent of up-scale calibration gas value). Several nominal ranges can be used for any given cell so long as the calibration and repeatability checks for that range remain within specifications.

3.3 Calibration Gas . A vendor certified concentration of a specific analyte in an appropriate balance gas.

3.4 Zero Calibration Error . The analyte concentration output exhibited by the EC cell in response to zero-level calibration

gas. 3.5 Up-Scale Calibration Error . The mean of the difference between the analyte concentration exhibited by the EC cell and the certified concentration of the up-scale calibration gas.

3.6 Interference Check . A procedure for quantifying analytical interference from components in the engine exhaust gas other than the targeted analytes. 3.7 Repeatability Check . A protocol for demonstrating that an EC cell operated over a given nominal analyte concentration rangePage 188 of 201

provides a stable and consistent response and is not significantly affected by repeated exposure to that gas. 3.8 Sample Flow Rate . The flow rate of the gas sample as it passes through the EC cell. In some situations, EC cells can experience drift with changes in flow rate. The flow rate must be monitored and documented during all phases of a sampling run. 3.9 Sampling Run . A timed three-phase event whereby an EC cell’s response rises and plateaus in a sample conditioning phase, remains relatively constant during a measurement data phase, then declines during a refresh phase. The sample conditioning phase exposes the EC cell to the gas sample for a length of time sufficient to reach a constant response. The measurement data phase is the time interval during which gas sample measurements can be made that meet the acceptance criteria of this protocol. The refresh phase then purges the EC cells with CO-free air. The refresh phase replenishes requisite O 2 and moisture in the electrolyte reserve and provides a mechanism to de-gas or desorb any interference gas scrubbers or filters so as to enable a stable CO EC cell response. There are four primary types of sampling runs: pre- sampling calibrations; stack gas sampling; post-sampling calibration checks; and measurement system repeatability checks. Stack gas sampling runs can be chained together for extended evaluations, providing all other procedural specifications are met.Page 189 of 201

3.10 Sampling Day . A time not to exceed twelve hours from the time of the pre-sampling calibration to the post-sampling calibration check. During this time, stack gas sampling runs can be repeated without repeated recalibrations, providing all other sampling specifications have been met. 3.11 Pre-Sampling Calibration/Post-Sampling Calibration Check. The protocols executed at the beginning and end of each sampling day to bracket measurement readings with controlled performance

checks. 3.12 Performance-Established Configuration . The EC cell and sampling system configuration that existed at the time that it initially met the performance requirements of this protocol.

4.0 Interferences. When present in sufficient concentrations, NO and NO 2 are two gas species that have been reported to interfere with CO

concentration measurements. In the likelihood of this occurrence, it is the protocol user’s responsibility to employ and properly maintain an appropriate CO EC cell filter or scrubber for removal of these gases, as described in Section

6.2.12. 5.0 Safety. [Reserved] 6.0 Equipment and Supplies. 6.1 What equipment do I need for the measurement system?Page 190 of 201

The system must maintain the gas sample at conditions that will prevent moisture condensation in the sample transport lines, both before and as the sample gas contacts the EC cells. The essential components of the measurement system are described

below. 6.2 Measurement System Components. 6.2.1 Sample Probe . A single extraction-point probe constructed of glass, stainless steel or other non-reactive material, and of length sufficient to reach any designated sampling point. The sample probe must be designed to prevent plugging due to condensation or particulate matter. 6.2.2 Sample Line . Non-reactive tubing to transport the effluent from the sample probe to the EC cell. 6.2.3 Calibration Assembly (optional) . A three-way valve assembly or equivalent to introduce calibration gases at ambient pressure at the exit end of the sample probe during calibration checks. The assembly must be designed such that only stack gas or calibration gas flows in the sample line and all gases flow through any gas path filters. 6.2.4 Particulate Filter (optional) . Filters before the inlet of the EC cell to prevent accumulation of particulate material in the measurement system and extend the useful life of the components. All filters must be fabricated of materials that are non-reactive to the gas mixtures being sampled.Page 191 of 201

6.2.5 Sample Pump . A leak-free pump to provide undiluted sample gas to the system at a flow rate sufficient to minimize the response time of the measurement system. If located upstream of the EC cells, the pump must be constructed of a material that is non-reactive to the gas mixtures being sampled. 6.2.8 Sample Flow Rate Monitoring . An adjustable rotameter or equivalent device used to adjust and maintain the sample flow rate through the analyzer as prescribed. 6.2.9 Sample Gas Manifold (optional) . A manifold to divert a portion of the sample gas stream to the analyzer and the remainder to a by-pass discharge vent. The sample gas manifold may also include provisions for introducing calibration gases directly to the analyzer. The manifold must be constructed of a material that is non-reactive to the gas mixtures being sampled.

6.2.10 EC cell . A device containing one or more EC cells to

determine the CO and O 2 concentrations in the sample gas stream. The EC cell(s) must meet the applicable performance specifications of Section 13 of this protocol.

6.2.11 Data Recorder . A strip chart recorder, computer or digital recorder to make a record of analyzer output data. The data recorder resolution (i.e., readability) must be no greater than 1 ppm for CO; 0.1 percent for O 2 ; and one degree (either o C

or o F) for temperature. Alternatively, you may use a digital orPage 192 of 201

analog meter having the same resolution to observe and manually record the analyzer responses.

6.2.12 Interference Gas Filter or Scrubber . A device to remove interfering compounds upstream of the CO EC cell. Specificinterference gas filters or scrubbers used in the performanceestablished configuration of the analyzer must continue to be

used. Such a filter or scrubber must have a means to determine when the removal agent is exhausted. Periodically replace or replenish it in accordance with the manufacturer’s

recommendations. 7.0 Reagents and Standards. What calibration gases are needed?

7.1 Calibration Gases . CO calibration gases for the EC cell must be CO in nitrogen or CO in a mixture of nitrogen and O 2. Use CO calibration gases with labeled concentration values certified by the manufacturer to be within ± 5 percent of the label value. Dry ambient air (20.9 percent O 2 ) is acceptable for calibration

of the O 2 cell. If needed, any lower percentage O 2 calibration gas must be a mixture of O 2 in nitrogen.

7.1.1 Up-Scale CO Calibration Gas Concentration. Choose one or more up-scale gas concentrations such that the average of the stack gas measurements for each stack gas sampling run are between 25 and 150 percent of those concentrations. Alternatively, choose an up-scale gas that does not exceed twice the concentration of the applicable outletPage 193 of 201

standard. If a measured gas value exceeds 150 percent of the upscale CO calibration gas value at any time during the stack gas sampling run, the run must be discarded and repeated.

7.1.2 Up-Scale O 2 Calibration Gas Concentration.

Select an O 2 gas concentration such that the difference between the gas concentration and the average stack gas measurement or reading for each sample run is less than 15 percent O 2 . When the average exhaust gas O 2 readings are above 6 percent, you may use dry ambient air (20.9 percent O 2 ) for the up-scale O 2 calibration

gas.

7.1.3 Zero Gas . Use an inert gas that contains less than 0.25 percent of the up-scale CO calibration gas concentration. You may use dry air that is free from ambient CO and other combustion gas products (e.g., CO 2 ). 8.0 Sample Collection and Analysis 8.1 Selection of Sampling Sites

**.** 8.1.1 Control Device Inlet. Select a sampling site sufficiently downstream of the engine so that the combustion gases should be well mixed. Use a single sampling extraction point near the center of the duct (e.g., within the 10 percent centroidal area), unless instructed otherwise.

8.1.2 Exhaust Gas Outlet. Select a sampling site located at least two stack diameters downstream of any disturbance (e.g., turbocharger exhaust, crossover junction or recirculation take-Page 194 of 201

off) and at least one-half stack diameter upstream of the gas discharge to the atmosphere. Use a single sampling extraction point near the center of the duct (e.g., within the 10 percent centroidal area), unless instructed otherwise. 8.2 Stack Gas Collection and Analysis

**.** Prior to the first stack gas sampling run, conduct that the pre-sampling calibration in accordance with Section 10.1. Use Figure 1 to record all data. Zero the analyzer with zero gas. Confirm and record that the scrubber media color is correct and not exhausted. Then position the probe at the sampling point and begin the sampling run at the same flow rate used during the up-scale calibration. Record the start time. Record all EC cell output responses and the flow rate during the “sample conditioning phase” once per minute until constant readings are obtained. Then begin the “measurement data phase” and record readings every 15 seconds for at least two minutes (or eight readings), or as otherwise required to achieve two continuous minutes of data that meet the specification given in Section 13.1. Finally, perform the “refresh phase” by introducing dry air, free from CO and other combustion gases, until several minute-to-minute readings of

consistent value have been obtained. For each run use the “measurement data phase” readings to calculate the average stack gas CO and O 2 concentrations.Page 195 of 201

8.3 EC Cell Rate. Maintain t he EC cell sample flow rate so thatit does not vary by more than ± 10 percent throughout the presampling calibration, stack gas sampling and post-sampling calibration check. Alternatively, the EC cell sample flow rate can be maintained within a tolerance range that does not affect the gas concentration readings by more than ± 3 percent, as instructed by the EC cell manufacturer. 9.0 Quality Control (Reserved)

10.0 Calibration and Standardization 10.1 Pre-Sampling Calibration

**.** Conduct the following protocol once for each nominal range to be used on each EC cell before performing a stack gas sampling run on each field sampling day. Repeat the calibration if you replace an EC cell before completing all of the sampling runs. There is no prescribed order for calibration of the EC cells; however, each cell must complete the measurement data phase during calibration. Assemble the measurement system by following the manufacturer's recommended protocols including for preparing and preconditioning the EC cell. Assure the measurement system has no leaks and verify the gas scrubbing agent is not depleted. Use Figure 1 to record all data.

10.1.1 Zero Calibration. For both the O 2 and CO cells, introduce zero gas to the measurement system (e.g., at the calibration assembly) and record the concentration reading every minutePage 196 of 201

until readings are constant for at least two consecutive minutes. Include the time and sample flow rate. Repeat the steps in this section at least once to verify the zero calibration for each component gas.

10.1.2 Zero Calibration Tolerance

**.** For each zero gas introduction, the zero level output must be less than or equal to ± 3 percent of the up-scale gas value or ± 1 ppm, whichever is less restrictive, for the CO channel and less than or equal to ± 0.3 percent O 2 for the O 2 channel. 10.1.3 Up-Scale Calibration. Individually introduce each calibration gas to the measurement system (e.g., at the calibration assembly) and record the start time. Record all EC cell output responses and the flow rate during this “sample conditioning phase” once per minute until readings are constant for at least two minutes. Then begin the “measurement data phase” and record readings every 15 seconds for a total of two minutes, or as otherwise required. Finally, perform the “refresh phase” by introducing dry air, free from CO and other combustion gases, until readings are constant for at least two consecutive minutes. Then repeat the steps in this section at least once to verify the calibration for each component gas. Introduce all gases to flow through the entire sample handling system (i.e., at the exit end of the sampling probe or the calibration assembly).Page 197 of 201

10.1.4 Up-Scale Calibration Error

**.** The mean of the difference of the “measurement data phase” readings from the reported standard gas value must be less than or equal to ± 5 percent or ± 1 ppm for CO or ± 0.5 percent O 2 , whichever is less restrictive, respectively. The maximum allowable deviation from the mean measured value of any single "measurement data phase" reading must be less than or equal to ± 2 percent or ± 1 ppm for CO or ± 0.5 percent O 2 , whichever is less restrictive, respectively. 10.2 Post-Sampling Calibration Check . Conduct a stack gas postsampling calibration check after the stack gas sampling run or

set of runs and within 12 hours of the initial calibration. Conduct up-scale and zero calibration checks using the protocol in Section 10.1. Make no changes to the sampling system or EC cell calibration until all post-sampling calibration checks have been recorded. If either the zero or up-scale calibration error exceeds the respective specification in Sections 10.1.2 and 10.1.4 then all measurement data collected since the previous

successful calibrations are invalid and re-calibration and resampling are required. If the sampling system is disassembled or the EC cell calibration is adjusted, repeat the calibration check before conducting the next analyzer sampling run. 11.0 Analytical Procedure The analytical procedure is fully discussed in Section 8. 12.0 Calculations and Data AnalysisPage 198 of 201

Determine the CO and O 2 concentrations for each stack gas sampling run by calculating the mean gas concentrations of the data recorded during the “measurement data phase”.

13.0 Protocol Performance Use the following protocols to verify consistent analyzer performance during each field sampling day.

13.1 Measurement Data Phase Performance Check . Calculate the mean of the readings from the “measurement data phase”. The

maximum allowable deviation from the mean for each of the individual readings is ± 2 percent, or ± 1 ppm, whichever is

less restrictive. Record the mean value and maximum deviation for each gas monitored. Data must conform to Section 10.1.4. The EC cell flow rate must conform to the specification in Section

8.3. Example: A measurement data phase is invalid if the maximum deviation of any single reading comprising that mean is greater than ± 2 percent or ± 1 ppm (the default criteria). For example, if the mean = 30 ppm, single readings of below 29 ppm and above 31 ppm are disallowed).

13.2 Interference Check

**.** Before the initial use of the EC cell and interference gas scrubber in the field, and semi-annually thereafter, challenge the interference gas scrubber with NO and

NO 2 gas standards that are generally recognized as representative of diesel-fueled engine NO and NO 2 emission values. Record thePage 199 of 201

responses displayed by the CO EC cell and other pertinent data on Figure 1 or a similar form. 13.2.1 Interference Response

**.** The combined NO and NO 2 interference response should be less than or equal to ± 5 percent of the up-scale CO calibration gas concentration. 13.3 Repeatability Check

**.** Conduct the following check once for each nominal range that is to be used on the CO EC cell within five days prior to each field sampling program. If a field sampling program lasts longer than five days, repeat this check every five days. Immediately repeat the check if the EC cell is replaced or if the EC cell is exposed to gas concentrations greater than 150 percent of the highest up-scale gas

concentration. 13.3.1 Repeatability Check Procedure . Perform a complete EC cell sampling run (all three phases) by introducing the CO calibration gas to the measurement system and record the response. Follow Section 10.1.3. Use Figure 1 to record all data. Repeat the run three times for a total of four complete runs. During the four repeatability check runs, do not adjust the system except where necessary to achieve the correct calibration gas flow rate at the analyzer. 13.3.2 Repeatability Check Calculations

**.** Determine the highest and lowest average “measurement data phase” CO concentrations from the four repeatability check runs and record the results onPage 200 of 201

Figure 1 or a similar form. The absolute value of the difference between the maximum and minimum average values recorded must not vary more than ± 3 percent or ± 1 ppm of the up-scale gas value,

whichever is less restrictive. 14.0 Pollution Prevention (Reserved) 15.0 Waste Management (Reserved) 16.0 Alternative Procedures (Reserved)

17.0 References (1) “Development of an Electrochemical Cell Emission Analyzer Test Protocol”, Topical Report, Phil Juneau, Emission Monitoring, Inc., July 1997. (2) “Determination of Nitrogen Oxides, Carbon Monoxide, and Oxygen Emissions from Natural Gas-Fired Engines, Boilers, and Process Heaters Using Portable Analyzers”, EMC Conditional TestProtocol 30 (CTM-30), Gas Research Institute Protocol GRI96/0008, Revision 7, October 13, 1997. (3) "ICAC Test Protocol for Periodic Monitoring”, EMC Conditional Test Protocol 34 (CTM-034), The Institute of Clean Air Companies, September 8, 1999. (4) “Code of Federal Regulations”, Protection of Environment, 40 CFR, Part 60, Appendix A, Methods 1-4; 10.

Table 1: Appendix A - Sampling Run Data. Facility________________ Engine I.D.______________ Date_________Page 201 of 201

Run Type: (__) (__) (__) (__) (X) Pre-Sample Stack Gas Post-Sample Repeatability Calibration Sample Cal. Check Check Run # 1 1 2 2 3 3 4 4 T ime Scrub. OK FlowRate Gas 

## O 2 

## CO O 2 

## CO O 2 

## CO O 2 

## CO

Sample Cond. Phase “ “ “ “

Measurement Data Phase “ “ “ “ “ “ “ “ “ “

Mean

Refresh

Phase

“ “ “ “