Department of Environmental 

Conservation

DIVISION OF AIR QUALITY

Director’s Office

410 Willoughby Avenue, Suite 303

PO Box 111800

Juneau, Alaska 99811-1800

Main: 907-465-5100

Toll Free: 866-241-2805

Fax: 907-465-5129

www.dec.alaska.gov

March 2, 2015

Melanie King

U.S. Environmental Protection Agency

109 T.W. Alexander Drive

Mail Code D243-01

Research Triangle Park, NC 27709

Subject: Reasons to Align 40 C.F.R. 60 and 40 C.F.R. 63 Exemptions for Rural Alaska

Dear Ms. King:

The Alaska Department of Environmental Conservation (ADEC) and the Alaska Energy Authority 

(AEA) appreciate this opportunity to respond to EPA’s January 6, 2015, letter to ADEC, in which 

you addressed ADEC’s November 28, 2014, request to align the New Source Performance 

Standards (NSPS) definition of rural Alaska in 40 CFR 60.4201(f), 60.4202(g), and 60.4216 with the 

Reciprocating Internal Combustion Engine National Emissions Standards for Hazardous Air 

Pollutants (RICE-NESHAP) definition of rural Alaska in 40 CFR 63.6603(b)(2). In the January 6, 

2015, letter, EPA requested additional information regarding how the affected communities are 

similar to communities that currently meet the NSPS definition of rural Alaska, even though they are 

on the Federal Aid Highway System (FAHS). The information in this letter provides the additional 

support EPA may require to align the exemption language for sources in rural areas of Alaska that 

are subject to 40 C.F.R. 60 Subpart IIII. 

Inaccessibility. The inaccessibility of the affected communities, by necessity, allows them to be 

classified as rural areas of Alaska. Alaska is a huge land mass with very limited access due to long 

distances or limited accessibility by only boat or plane. Travel distances are often measured in days 

not hours. The affected communities are remote, isolated, and many have small populations. 

Although the affected communities are on the FAHS, none of them, with the exception of Juneau, 

have local access to factory service technicians. The technicians are based in Anchorage, Juneau,

and Seattle. 

Therefore, factory service technicians would require extensive travel time in addition to the time 

needed to service the engines. Service intervals are typically 2,000-3,000 hours for the NSPS 

engines. Technicians charge $125-135/hour, so it would not be economic to drive six hours one 

way from Anchorage to Tok or to take the ferry nine hours one way from Juneau to Pelican. In 

addition, technicians would need to fly from Anchorage or Juneau before being able to travel on to 

the smaller Southeast Alaska communities. Some communities, such as Eagle, are only accessible by 

road for four months of the year due to roads that are not passable in the winter. Others, such as 

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U.S. Environmental Protection Agency

Tenakee Springs, only have ferry service once a week, weather permitting, and the alternative travel 

method is by floatplane. In addition, weather in Alaska is often less than ideal for flying; therefore, 

it is standard practice to include the expense of weather delays when budgeting for travel by air. A 

routine maintenance call to one of these remote communities on the FAHS would cost a minimum 

of several thousand dollars. The rates and rate payers in these communities would be required to 

pay for this significant increased cost. 

Urea Storage and Transport Expense. Existing powerhouses in the affected communities are 

unlikely to have interior space readily available which could accommodate a urea tank of several 

thousand gallons. Urea freezes at approximately 12°F, so the tanks would have to be in a heated 

space or be individually heated, which would require utilities to burn additional fuel, increasing both 

costs and emissions from space heating equipment. In some cases, the tanks could be heated with 

recovered heat from the diesel generators. However, most communities have implemented energy 

efficient measures and routinely use recovered heat for space heating, so diverting the heat required 

for the urea tanks would result in additional stove oil usage and expense at buildings heated using 

recovered heat. 

The delivery of the urea poses additional storage and expense issues. Most of these communities 

receive diesel fuel seasonally by barge and would receive urea the same way. Since urea is corrosive 

to steel, it would most likely be transported in 330 gallon plastic totes. These might be transported 

as deck cargo on the fuel barge at significantly a higher freight cost per gallon than the diesel fuel in 

the barge’s tanks.

Risk. The most significant risk associated with the urea requirement is the added complexity of 

operation and maintenance for sources. Some of the small remote communities face extreme winter 

conditions. As an example, three of the remote communities on the FAHS (Tok, Eagle, and Manley 

Hot Springs) have reported temperatures as low as -70°F. If a genset fails or has to operate at low 

output due to a shortage of urea at extreme low temperatures, it may be life-threatening. Seniors, 

children, and residents with disabilities would be at greatest risk if utilities are unable to provide 

sufficient power to heat and light the community. There are also safety considerations for poorly 

trained operators who would be at risk of skin and eye exposure to the urea. 

Shortage of Trained Operators. Affected communities routinely experience difficulty in finding 

qualified operators and experience high turnover rates of staff. This is in part due to the low pay 

scale that results from the challenge of operating an electric utility with a very small number of ratepaying customers as well as high overhead and fuel costs. Additionally, these jobs are often parttime, which makes it difficult to retain staff in rural communities with few other job opportunities. 

AEA offers training classes (http://www.akenergyauthority.org/Programs/Training) to assist rural

communities in improving the skills of operators but regularly finds that recently-trained operators 

have left the communities for better-paying jobs. The increased responsibility, training, and 

requirements for the urea control systems that part-time, inexperienced operators will have to take 

on will only increase the costs and associated risks to remote communities. 

Limited Availability and High Capital Cost of Final Tier 4 Engines. John Deere, Detroit 

Diesel, and Caterpillar furnish the majority of prime power diesel engines under 750 HP used in 

rural Alaska power plants. In general terms, most rural Alaska power plants with electric loads up to 

200 kWe use John Deere gensets; between 200 kWe and 350 kWe use Detroit Diesel gensets; and 

over 350 kWe use Caterpillar gensets. In an effort to better understand the effect of the final Tier 4 

requirements on rural Alaska electric utilities, local distributors of all three manufacturers were 

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contacted February 20, 2015, for updated information on costs, literature, and technical 

specifications for Final Tier 4 engines. What was learned is disconcerting:

• Availability of Final Tier 4 engines for use in stationary Prime Power, constant speed 

applications is poor. 

• Technical data and specifications for Final Tier 4 engines are incomplete. 

• Access to maintenance and service bulletins specific to stationary, constant speed Final Tier 

4 engines is limited.

• There is limited information available on maintenance costs for Final Tier 4 engines and 

emissions devices, but the capital costs are high.

Availability:

• Marsh Creek, an Anchorage John Deere distributor, reports that it can provide Final Tier 4 

gensets, but they are a special order with an engine lead time of 140 days. 

• Pacific Power Products, an Anchorage MTU/Detroit Diesel distributor, responded that 

MTU has not announced the anticipated availability of its Final Tier 4 engines, and it is 

unlikely to occur prior to 2016.

• NC Power Systems, an Anchorage Caterpillar distributor, responded that a CAT marine Tier 

3 engine with added Active DPF and SCR to comply with Final Tier 4 emissions 

requirements is available. 

Capital Cost:

The updated capital cost data provided by John Deere and NC Power Systems for their Final Tier 4 

solutions are staggering. 

The capital cost of a CAT C18 Tier 3 certified genset is $220,650. The capital cost of the CAT C18 

Tier 3 genset with Active DPF and SCR to comply with Final Tier 4 is $383,833. This is an increase 

of nearly 74% and over $163,000.

Marsh Creek estimated in 2011 that the capital costs of Tier 4 engines would increase between 50% 

and 60% compared to equivalent sized Tier 3 engines. 2015 pricing for a Final Tier 4 engine is more 

than double the cost of an existing equivalent horsepower Tier 3 marine engine. The current Tier 3 

JD 4045 marine engine cost is $25,000. The Final Tier 4 JD 4045HFG09 engine cost is $53,000. 

The current Tier 3 JD 6068 engine cost is $30,000, whereas the Final Tier 4 JD 6068HFG08 engine 

cost is $66,000.

Maintenance and Operating Cost:

Each engine manufacturer has its own specific emissions equipment maintenance and operating 

requirements. Since MTU has not announced its Final Tier 4 solution, these costs are unknown. 

March Creek has responded that Urea Diesel Exhaust Fluid (DEF) consumption is estimated at 5% 

of fuel consumption. NC Power Supply has not provided estimates of DEF consumption for its 

C18, but information provided by Miratech shows DEF consumption between 5% and 12% for an 

aftermarket SCR. 

The cost of DEF in 330-gallons portable shipping containers is currently $3.30/gallon in Anchorage. 

The delivery cost to rural Alaska is highly variable, but regardless of whether a community is road 

connected or not, operating costs will increase between 5% and 10% just for the DEF fluid use. 

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Marsh Creek estimates the John Deere emissions equipment in a prime power application will 

require maintenance by a qualified service technician 2 to 3 times per year. The material cost for 

each service interval is $2000. The hourly rate of a service technician is at least $125/hour, and the 

time to perform the actual service is 4 to 6 hours. Travel logistics are described below.

EPA acknowledged in the final NSPS rule that the ongoing annual maintenance cost of Final Tier 4 

emission equipment cannot be sustained by small rural electric utilities, but EPA then limited the 

regulatory relief to only those rural electric utilities not accessible to the FAHS. 

However, the remoteness of a rural Alaska community is not defined by whether or not it is 

accessible to the road system (FAHS). For example, the communities of Central, Minto, and 

Northway are all on the road system. Central uses John Deere gensets, Minto has Detroit Diesel 

gensets, and Northway uses Caterpillar gensets. The vendors who provide equipment and repair 

services for these gensets are based in Anchorage. Following are descriptions of travel required to 

reach these communities:

Central: 

• Driving distance is 479 miles (analogous to Washington D.C. to Montreal).

• Driving time is 9 hours in good weather. It snows nine months of the year along this route.

• The road is two lane, with 80 miles of gravel surface.

• In poor driving conditions, the technician would fly to Fairbanks by jet and transfer to a 

small plane, which flies to Central once daily.

Minto:

• Driving distance is 483 miles (analogous to Washington D.C. to Montreal)

• Driving time is 9-1/2 hours in good weather. It snows nine months of the year along this 

route.

• The road is two lane, with 90 miles of gravel surface.

• In poor driving conditions, the technician would fly to Fairbanks by jet and transfer to a 

small plane, which flies to Minto on a charter basis.

Northway:

• Driving distance is 373 miles (analogous to Washington D.C. to Detroit).

• Driving time is 7 hours, 20 minutes in good weather. It snows nine months of the year 

along this route.

• The road is two lane, with 11 miles of gravel surface.

• In poor driving conditions, the technician might charter a small plane out of Anchorage.

Differences Between Full NSPS Compliance for Mobile Sources and Stationary Sources. 

The maintenance interval for NSPS engines that require a factory-trained technician is approximately 

2,000-3,000 hours. On-road vehicles average approximately 30 mph, so this maintenance happens at 

4-6 year intervals under typical usage. In rural Alaska, where roads are limited or non-existent, the 

interval may be significantly longer. Contractors working in remote villages generally bring heavy 

equipment with them because the local equipment is either not appropriate or not reliable. In 

contrast, an NSPS engine in a powerhouse runs continuously, so an electric utility could require a 

factory-trained technician three or four times a year. The annual NSPS engine maintenance cost for 

a community like Manley Hot Springs could exceed $16,000, an enormous burden on a community 

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