Source: http://www.dec.ny.gov/regulations/104378.html
Timestamp: 2017-11-18 08:38:13
Document Index: 639070456

Matched Legal Cases: ['arts 222', 'art 227', 'art 222', 'arts 222', 'art 227', 'arts 222', 'art 227', 'art 222', 'art 200', 'art 227', 'art 227', 'art 222', 'art 222', 'art 222', 'art 200', 'art 227', 'art 222', 'art 200', 'art 227', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 227', 'art 231', 'art 222', 'art 222', 'art 201', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 200', 'art 227', 'art 227', 'art 222', 'art 227', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 201', 'art 227', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 222', 'art 231']

﻿ Parts 222, 200 and Subpart 227-2 Revised Regulatory Impact Statement - NYS Dept. of Environmental Conservation
Home » Regulations and Enforcement » Proposed Regulations » Air Pollution - Recently Proposed and Adopted Regulations & Policies » Adopted Part 222, Distributed Generation Sources » Parts 222, 200 and Subpart 227-2 Revised Regulatory Impact Statement
Parts 222, 200 and Subpart 227-2 Revised Regulatory Impact Statement
Distributed generation (DG) sources are engines used by a host site to supply electricity outside that which is supplied by the electrical grid. This on-site generation of electricity by DG sources is used by a wide-range of commercial, medical, educational, and industrial facilities either in non-emergency situations that reduce demand on the electric grid and preserve the overall reliability of the grid, or in emergency situations when the usual supply of power from central station power plants becomes unavailable. Currently, the exact number of DG sources in New York is not known, but the Northeast States for Coordinated Air Use Management (NESCAUM) estimated that there may be over 15,000 diesel generators in the state1 that provide electricity in times of high demand or during emergency events.
However, many DG sources are not currently regulated and produce air pollution, including nitrogen oxides (NOx), a precursor to ground-level ozone and particulate matter (PM) - both of which have been linked to adverse public health impacts. The increasing use of DG sources, if left unchecked, will exacerbate public health impacts and make it very difficult for New York to meet its obligations under the Clean Air Act (CAA) including attainment of the 2008 and 2015 ozone National Ambient Air Quality Standards (NAAQS).
Therefore, the Department of Environmental Conservation (Department) is proposing to adopt a new regulation, 6 NYCRR Part 222, 'Distributed Generation Sources' and make conforming revisions to Part 200, 'General Provisions' and Subpart 227-2, 'Reasonably Available Control Technology (RACT) for Oxides of Nitrogen (NOx)' to establish emission standards, monitoring requirements and record keeping requirements for certain DG sources in New York State. The proposed rule will apply generally to DG sources which are not currently regulated under Subpart 227-2 or a federal New Source Performance Standard (NSPS), as long as the federal standards are less than or equal to the Part 222 emission limits.
As explained in more detail below, the proposed rule will apply to DG sources with output ratings of 200 horsepower (hp) or greater in the New York City metropolitan area (NYMA) and 400 hp or greater elsewhere in New York State. These DG sources can be broken down into two regulated categories: economic dispatch sources and "emergency power generating stationary reciprocating internal combustion engines" (emergency generators). "Economic dispatch sources," defined below, will be required to meet emission standards effective May 1, 2017. In the event that an economic dispatch source cannot comply with the proposed NOx emissions standard, the proposed rule provides sources with various alternative compliance options including, but not limited to, the opportunity to apply for source-specific emission limits by demonstrating the economic or technical infeasibility of meeting the emission standard set forth in Section 222.4 of Part 222. The proposed rule also sets forth certain monitoring requirements for economic dispatch sources, and maintenance and record keeping requirements for all DG sources.
Emergency generators, as defined under current Section 200.1(cq), will not be subject to the proposed emission standards but will be required to comply with certain monitoring, maintenance and record keeping provisions. The proposed rule also prohibits the maintenance and testing of emergency generators conducted between the hours of 1:00 pm and 8:00 pm during the ozone season (May 1 through September 30 of each year).
The Department is planning to incorporate new Part 222 and the attendant revisions to Part 200 and Subpart 227-2 into New York's state implementation plan (SIP), and provide the revised SIP to EPA for review and approval.
The statutory authority for the promulgation of Part 222 and the attendant revisions to Part 200 and Subpart 227-2 is found in the New York State Environmental Conservation Law (ECL), Sections 1-0101, 3-0301, 19-0103, 19-0105, 19-0301, 19-0303, 19-0305, 19-0311, 71-2103 and 71-2105.
ECL Section 1-0101. This Section declares it to be the policy of the state to conserve, improve and protect its natural resources and environment and control air pollution in order to enhance the health, safety and welfare of the people of the State and their overall economic and social well being. Section 1-0101 further expresses, among other things, that it is the policy of the State to coordinate the State's environmental plans, functions, powers and programs with those of the federal government and other regions and manage air resources so that the State may fulfill its responsibility as trustee of the environment for present and future generations. This Section also provides that it is the policy of the State to foster, promote, create and maintain conditions by which man and nature can thrive in harmony by providing that care is taken for air resources that are shared with other States.
ECL Section 19-0303. This section provides that the terms of any air pollution control regulation promulgated by the Department may differentiate between particular types and conditions of air pollution and air contamination sources. Section 19-0303 also provides that the Department, in adopting any regulation which contains a requirement that is more stringent than the Clean Air Act (CAA) or its implementing regulations, must include in the Regulatory Impact Statement (RIS), an evaluation of the cost-effectiveness of the proposed regulation in comparison to the cost-effectiveness of reasonably available alternatives and a review of the reasonably available alternative measures along with an explanation of the reasons for rejecting such alternatives.
ECL Section 19-0305. This section authorizes the Department to enforce the codes, rules and regulations established in accordance with Article 19. Section 19-0905 also empowers the Department to conduct or cause to be conducted studies and research with respect to air pollution control, abatement or prevention.
ECL Sections 71-2103 and 71-2105 set forth the civil and criminal penalty structures for violations of Article 19.
IV. Legislative Objectives
Article 19 of the ECL was enacted to safeguard the air resources of New York from pollution and ensure the protection of the public health and welfare, the natural resources of the State, physical property, and integrating industrial development with sound environmental practices. The policy of the State is to require the use of all available, practical and reasonable methods to prevent and control air pollution in New York. To facilitate this policy objective, the Legislature granted specific powers and duties to the Department, including the power to adopt and promulgate regulations for preventing, controlling and prohibiting air pollution. The provisions cited above clearly provide the Department with authority to create this regulation.
V. Needs and Benefits
The Department is proposing to adopt new Part 222 in order to best protect and preserve the state's air resources. The Department proposes to achieve this end by implementing a regulatory scheme for DG sources which, if left unregulated, would endanger the public health and the environment. As further detailed below, this rulemaking is necessary to reduce NOx emissions from DG sources, thereby helping New York attain the federal 2008 ozone NAAQS. In particular, the proposed rule is a critical component in the state's ability to meet the federal 2008 ozone NAAQS in NYMA, which is currently designated as non-attainment for ozone. Ground-level ozone is produced from chemical reactions involving oxides of nitrogen (one of the primary pollutants emitted by DG sources) and volatile organic compounds. The increased use of certain DG sources, especially uncontrolled diesel-fired generators used in demand response programs, has made it increasingly difficult for the state to comply with the 2008 ozone NAAQS. This proposed rule will address attainment of the 2008 ozone NAAQS as well as the public health impacts of NOx and PM, pollutants emitted by DG sources which are linked to asthma, decreased lung function and heart attacks. In addition, NYMA is in compliance with the PM2.5 NAAQS, but only by a small margin. The PM controls in the proposed rule will help ensure that NYMA continues to attain the standard.
In March of 2008, the EPA lowered the eight-hour ozone NAAQS from 0.08 parts per million (ppm), which after rounding was effectively 0.084 ppm, to 0.075 ppm. To attain the 0.08 ppm standard, the Department estimated based on air quality modeling that the maximum daily NOx emissions in the NYMA should not exceed 750 tons per day. Further NOx reductions on the order of 40 percent within some counties in the NYMA may be required in order to attain the 0.075 ppm standard. Based upon preliminary modeling results, it may take up to 10 years to implement measures to bring New York into attainment with the 2008 standard. Subsequently, on October 1, 2015, the EPA further reduced the 8-hour ozone NAAQS to 0.070 ppm. If emissions from DG sources subject to this rulemaking remain unchecked or possibly increase significantly, it will be very difficult for the Department to formulate a successful strategy to bring the state into compliance.
Distributed generation is the on-site generation of electricity at a host site and is used by a wide-range of commercial, medical, educational, and industrial facilities. While photovoltaic cells and wind turbines are examples of renewable DG technology, internal combustion engines are the most common DG technology. Specifically, the use of emergency power generating stationary reciprocating internal combustion engines (emergency generators) is by far the most common DG application. Emergency generators are currently allowed to operate for up to 500 hours per year, including when the usual supply of power becomes unavailable and routine maintenance and exercising pursuant to Section 200.1(cq).
In May of 2001, the Department initiated a stakeholder process and technology review to establish emission standards, monitoring and record keeping requirements for DG sources that, with the exception of DG sources located at major NOx facilities, were not subject to any federal or state regulations. As a result of the 2001 initiative, the Department developed a regulatory proposal which, following several additional stakeholder meetings and intervening federal developments, resulted in this proposed rulemaking.
As part of the regulatory development process, the Department participated in the High Electric Demand Day (HEDD) Initiative sponsored by the Ozone Transport Commission (OTC) in 2006 and 2007. The purpose of the HEDD Initiative was to develop strategies to reduce or offset emissions from peak generation and demand response sources on days of high electric demand which generally correspond to days when the ozone NAAQS is contravened. In March 2007, six states, including New York, committed to reduce NOx emissions by a total of 134.9 tons per day. New York's share of this emission reduction target was 50.8 tons per day. Though these NOx emission reduction commitments were not legally binding on any state or the OTC, the proposed reductions would further New York's goal of attaining the federal ozone standard.
Accordingly, proposed Part 222 establishes emissions limits, monitoring requirements, and record keeping requirements on stationary internal combustion engines used as economic dispatch sources, including DG sources enrolled in demand response programs (see discussion below). DG sources operating exclusively as emergency generators will not be subject to the emissions limits; although certain monitoring and record keeping requirements will be applicable to these emergency-only DG sources. The emission limits and regulatory requirements for DG sources proposed in this rulemaking will greatly assist New York in attaining the 2008 ozone NAAQS and, eventually, the 2015 ozone NAAQS.
b. Categories of DG Sources
For purposes of determining which DG sources are subject to the emission limits under proposed Part 222, the Department divided DG sources into two primary regulatory classifications. Emergency generators, defined under current Section 200.1(cq) are not subject to the proposed emission limits. Economic dispatch sources, DG sources that do not operate exclusively as emergency generators, are subject to the proposed emissions limits. Additionally, economic dispatch sources can be further divided into subcategories based upon application, for example: combined heat and power (CHP) systems and demand response sources. While their application may differ, all subcategories that fall under the primary classification of economic dispatch sources are treated the same for purposes of proposed Part 222. DG source categories are discussed in the following subsections.
Emergency generators or "emergency power generating stationary reciprocating internal combustion engines" as the term is used in current regulation, are operated when the usual source of electricity is unavailable or for facility-related emergencies. Pursuant to Section 200.1(cq), emergency generators are currently allowed to operate for up to 500 hours per year, including emergency situations, routine maintenance, and routine exercising.2 In 2003, the Northeast States for Coordinated Air Use Management (NESCAUM) released a study indicating there may be as many as 15,000 diesel generators in New York State;3 most of these sources are believed to be emergency generators which are currently exempt from permitting requirements pursuant to 6 NYCRR Section 201-3.2(c)(6). Although NESCAUM's estimate has not been verified by the Department, the estimate indicates there may be a large number of sources whose emissions are not currently regulated or monitored.
Economic Dispatch Sources
Economic dispatch sources are broadly defined in proposed Part 222 as DG sources used to reduce energy costs or ensure a reliable electricity supply for a facility. Any DG source that is not exclusively an emergency generator is considered to be an economic dispatch source for purposes of the rule, including CHP systems and sources enrolled in demand response programs. Generally, economic dispatch sources are used in two ways: peak load generation; and base load generation. Peak load generation is used during times when the cost of electricity supplied by utilities is high. Alternatively, base load generation systems are designed to provide all or a portion of the electricity demand for a facility throughout the year.
A CHP system consists of an electricity generation component (i.e., peak load or base load generation) and a heat recovery component. In a CHP system, the exhaust stream of the engine is cooled in a heat exchanger and the energy recovered from the exhaust is used to provide heat or hot water for the facility. The energy efficiency of CHP systems ranges from 60 to 80 percent4 whereas the efficiency of engines used in electric generation-only applications is less than 40 percent.5 By recovering heat from the exhaust gas of an engine, CHP systems negate the need for a separate boiler - including the fuel required to operate a boiler. It has been estimated that, as of May 2013, the total capacity of CHP systems in the state was approximately 5,559 megawatts (MW). Further, it is estimated that the total potential of CHP applications in the state is approximately 8,500 MW.6
Sources Enrolled in Demand Response Programs
Beginning in 2001, the New York Independent System Operator (NYISO) and transmission operators7 in New York have called upon owners of uncontrolled, primarily diesel-fired, engines to generate electricity for the host facility in order to reduce demand on the electric grid, thus preserving the reliability of the grid. Sources enrolled in these programs, referred to as 'demand response programs', are generally called upon to operate on hot summer days when ozone levels are typically high. The increasing use of uncontrolled DG sources in demand response programs has correspondingly led to increased emissions from sources previously used exclusively in emergency situations. As further detailed below, the emissions associated with the use of DG sources enrolled in demand response programs, especially during periods when ground-level ozone concentrations are high, are negatively impacting the state's ability to attain the 2008 and 2015 ozone NAAQS as required by the CAA.
Sources enrolled in demand response programs are typically uncontrolled, diesel-fired engines. Older engines typically have higher NOx emission rates than newer engines. Profiles of the age (by model year) of the DG sources enrolled in demand response programs in 2002 (the only year for which DEC has profile data) are presented in Table 1.
Table 1.Population Profiles of Sources Enrolled in Demand Response Programs (2002)
NYPA9
NYSERDA10
Unknown 75 - 4 - 5 - 84 -
1956-1979 34 27 15 50 34 34 83 32
1980-1989 30 23 1 3 11 11 42 16
1990-1994 21 16 6 20 4 4 31 12
1995-2002 44 34 8 27 52 51 104 40
The EPA defines the 'useful life' of an engine as "the period during which the engine is designed to properly function in terms of reliability and fuel consumption, without being remanufactured, specified as a number of hours of operation or calendar years, whichever comes first" (40 Code of Federal Regulations (CFR) 60.4219 (Federal Register Vol. 71, No. 132, July 11, 2006, pg. 39154 et. seq.). EPA further defined the useful life of diesel-fired engines as follows:
Compression ignition engines with a displacement less than 10 liters per cylinder with an output rating equal to or greater than 37 kW: 8,000 hours or 10 years (40 CFR 1039.101(g)).
Compression ignition engines with a displacement greater than or equal to 10 liters per cylinder and less than 30 liters per cylinder: minimum of 10,000 hours or 10 years (40 CFR 94.9).
Approximately 60 percent of the DG sources enrolled in demand response programs in 2002 were manufactured prior to 1995.11 Most of these sources were previously used solely as emergency generators. Due to the limited use of the engines (limited to no more than 500 operating hours per year), these engines are likely to last much longer than 10 years. The United States Environmental Protection Agency (EPA) estimated the average NOx emission rate of engines manufactured prior to 1995 to be 14.0 grams per brake horsepower-hour (g/bhp-h).12 Such an emission rate is more than 25 times higher than the mean NOx emission rate from central station power plants in New York in 2000 (0.54 g/bhp-h)13 and up to 28 times greater than the NOx emissions for new, Model Year 2014 diesel-fired engines.14
In order to operate a generator in a demand response program, the source owner or operator must first obtain a registration certificate or air permit from the Department. Facilities enrolled in demand response programs receive revenue from the program sponsors for guaranteeing load reductions (kW) or for electricity generated and/or curtailed (kWh).
The NYISO has three demand response programs in which generation sources may be called in order to maintain the reliability of the electric grid:
1. Special Case Resources: Program participants receive capacity payments ($0.29 or $8.36 per kW- month, depending upon location, in 2011)15 and energy payments (maximum payment $500 per MWh)16 for load reductions (i.e., electricity generated by a DG source). Eligible capacity resources, including DG sources, may enroll in NYISO demand response programs. Response to an event called by the NYISO is mandatory for program participants.
2. Emergency Demand Response Program (EDRP): Program participants receive energy payments (minimum payment $500 per MWh)17 for load reductions. Distributed generation sources may be used to generate electricity at the host facility, thus reducing the load on the grid. Response to an event called by the NYISO is voluntary for program participants.
3. Targeted Demand Response Program: The NYISO calls resources in New York City (NYISO Zone J) enrolled in the Special Case Resources and EDRP programs to operate during high demand periods. Participation in this program is voluntary for program participants. This program has been utilized six times since 2007.
Between 2001 and 2012, the NYISO called 36 events involving resources enrolled in the three programs. Summaries of the number of events per year, per zone and total event hours per year are presented in Tables 2 and 3 below.
Table 2: NYISO Demand Response Events
per Year18
2001 4 20.5
2002 4 22
2003 2 22
2006 6 40
2007 2 18.5
2010 4 27.5
2011 3 16
Table 3: NYISO Demand Response Events per NYISO Zone19
NYISO Zone
A 11 68
B 12 72
C 12 72
D 9 58
E 10 63
F 11 67.5
G 18 101.5
H 19 110.5
I 19 110.5
J 31 194.5
K 21 123.5
The total capacity of generators enrolled in the NYISO's reliability demand response programs in May 2011 was 247.2 MW. A breakdown by program and NYISO Zone is presented in Table 4 below. According to a NYISO filing, generation resources comprised approximately 13 percent of the total capacity enrolled in the EDRP and Special Case Resources programs in May 2011.20
Table 4: Generator Enrollment by NYISO Zone (May 2011)21
EDRP Generation Capacity (MW)
Special Case Resources Generation Capacity (MW)
A 9.9 5.4 15.3
B 1.0 10.1 11.1
C 11.9 3.0 14.9
D 3.1 0.2 3.3
E 24.0 4.1 28.1
F 4.4 9.5 13.9
G 17.1 6.9 24.0
H 1.5 0.4 1.9
I 1.7 3.7 5.4
J 0.5 103.5 104.0
K 0 25.3 25.3
Totals 75.1 172.1 247.2
The New York City metropolitan area, as defined in 200.1(au), covers essentially the same counties as NYISO Zones I, J and K. The capacity of DG sources enrolled in demand response programs in these zones totaled 134.7 MW in May 2011. The average duration of a demand response event in these zones is approximately six (6) hours. Assuming all of these DG sources operate during a typical event, and a NOx emission rate of 32.2 pounds per MWh,22 these sources would emit approximately 13 tons of NOx per event. This estimate does not include emissions from DG sources enrolled in demand response programs sponsored by Con Edison, NYPA or LIPA. The NOx emissions estimate for the DG sources enrolled in the NYISO demand response programs would be reduced to 2.7 tons per day if such sources were required to meet the NOx emission standard set forth in proposed Part 222. Demand response programs are typically activated on high electric demand days, so a 10 ton per day reduction in emissions from these sources is a step towards attaining the 2008 and 2015 ozone NAAQS.
Further, the New York City Energy Policy Task Force estimated that the total capacity of emergency generators in New York City at 1,320 MW.23 Potentially, all of these emergency generators could be enrolled in demand response programs.24 If this estimate is accurate and all such sources are used as demand response sources, the estimated daily NOx emissions would be more than 127 tons (a value more than twice the Department's commitment from the OTC HEDD Initiative). It would be very difficult to develop a regulatory strategy to bring the NYMA into attainment with the 2008 and 2015 ozone NAAQS if all emergency generators in New York City were allowed to participate in demand response programs.
c. The Need to Establish Limits to Reduce Public Health Impacts from DG Sources
DG sources emit various air pollutants, including NOx and PM, which can result in public health impacts for individuals located near these sources. Since DG sources have short stacks, the exhaust plumes are not dispersed as effectively as plumes from central station power plants, which are required to have much taller stacks to adequately disperse emissions to the ambient air. Therefore, emissions from DG sources can have a greater public health impact on populations living and working in the vicinity of the sources. NOx compounds are precursors to ground-level ozone, which irritates lung tissues and causes symptoms such as coughing, wheezing and difficulty breathing.25 Additionally, chronic exposure to ground-level ozone can cause permanent lung damage.26 PM emissions have been linked to adverse health impacts including aggravated asthma, decreased lung function, irregular heartbeat and heart attacks.27
DG sources should be subject to emission standards to reduce public health impacts since these sources displace the electricity traditionally generated by central station power plants. DG sources are used to ensure a reliable supply of electricity, reduce energy costs or both. Facilities participating in demand response programs receive payments for electricity generated and, in some cases, generation capacity. The electricity generated by DG sources lessens the demand for electricity generated at central station power plants, thereby reducing the incentive to build new central station power plants, which-without the electricity generated by DG sources-would otherwise be necessary to maintain the integrity of the grid. Since central station power plants are required to meet emission standards to reduce public health impacts, DG sources that displace electrical generation at central station power plants should also be subject to emission standards.
Therefore, the NOx and PM emission limits established for DG sources in this proposed rule will help reduce public health impacts, especially for individuals living and working near them. The reduction in ground-level ozone due to the limits on NOx will also help the state attain the federal 2008 and 2015 ozone standards in compliance with the CAA.
d. 'Current Emission Limits for Major Distributed Generation Sources'
Some facilities in New York are major sources of NOx emissions due to their use of DG equipment. These facilities typically use natural gas-fired spark-ignition or diesel-fired compression-ignition stationary internal combustion engines and are subject to emission limits pursuant to Subpart 227-2, the "NOx RACT" rule. For existing sources, the NOx RACT emission limits are 1.5 g/bhp-h and 2.3 g/bhp-h for natural gas-fired and diesel-fired sources, respectively.28 New sources at Title V facilities may be subject to stricter limits via new source review regulations (Part 231).
e. Key Provisions in the Proposed Rule
i. 'Applicability Requirements for DG Sources'
As stated above, the proposed rule will not apply to DG sources currently regulated under the NOx RACT rule. Additionally, the proposed rule will not apply to sources subject to the federal NSPS rules, as promulgated by the EPA under 40 CFR 60, Subparts IIII, JJJJ, and KKKK in cases where the NSPS standard is less than or equal to the Part 222 standard.
Part 222 will generally apply to DG sources in New York that meet the following applicability thresholds:
Mechanical output rating of 200 horsepower (hp) or greater for DG sources located in the New York City metropolitan area; or
These horsepower thresholds are based upon the permitting exemption thresholds set forth under current 6 NYCRR Subpart 201-3.2(c)(3) for internal combustion engines.
Emergency generators owned by municipalities or municipal agencies may be operated in cases where the usual supply of electricity is still available if such operation would prevent a violation of the Clean Water Act or Article 17 of the ECL through April 30, 2021. The purpose of this provision is to allow such generators to run in order to prevent direct sewage discharges to waterways in the state. Beginning May 1, 2021, such sources would be required to meet the standards set forth in Section 222.4 of Part 222 or be replaced with engines meeting standards adopted by the EPA.
ii. 'Requirements for Emergency Generators'
Although no emission standards will be established for emergency generators in this rule, a prohibition of routine testing of emergency generators between the hours of 1:00 pm and 8:00 pm during the period of May 1 through September 30 of each year will reduce the potential impacts to nearby populations. It is during these periods when ozone concentrations typically peak and the proposed prohibition is designed to prevent further degradation of air quality due to DG sources that do not need to be operating during those times. Maintenance activities which do not involve operation of the DG source are not subject to this provision.
iii. 'Emission Limits for Economic Dispatch Sources'
The following NOx emission limits will apply to economic dispatch sources subject to Part 222, effective May 1, 2017:
natural gas-fired simple cycle combustion turbines: 50 parts per million by volume on a dry basis (ppmvd) corrected to 15 percent O2
natural gas-fired engines: 1.5 g/bhp-h
The PM emission limit for diesel-fired DG sources is 0.30 g/bhp-h. This standard is equivalent to an emission rate of 0.10 lb per million British thermal units (heat input - assuming an engine efficiency of 38 percent).
iv. 'Alternative Compliance Options'
Second, an owner or operator may permanently shut down a DG source by May 1, 2018. The intent to shut down a source must be recorded as part of an enforceable permit modification prior to May 1, 2017. This option is provided to allow additional time for those facilities which choose to replace an old DG source with a new DG source.
Third, an owner or operator of a diesel-fired economic dispatch source may convert the source to fire natural gas by May 1, 2018. The intent to convert a source must be recorded as part of an enforceable permit modification prior to May 1, 2017.
The fourth option is available to facilities with renewable generation systems (RGS).29 An effective emission rate, calculated using Equation 1 (below), may be compared to the applicable NOx emission limit to demonstrate compliance with the emission limit. This option may only be used in cases where the NOx standard is in units of grams per brake horsepower-hour. This approach allows a facility to take credit for electricity generated by the RGS.
Equation 1.E = 0.338*N/(D+R)
the source owner or operator provides evidence (e.g., copy of a contract with an energy services company) that the source was enrolled during calendar year 2014 or 2015 in a demand response program established to maintain the reliability of the electric grid; and
The Department may extend the compliance date for sources subject to subdivision 222.5(b) of Part 222 until as late as May 1, 2019 based, at least in part, on a determination by the New York State Department of Public Service that an extension is needed to preserve reliability of the electric grid in the particular NYISO zone or subzone in which an affected source is located.
For the PM emission limits, an alternative compliance option is to equip the source with a pollution control device designed to remove 85 percent or more of PM from the exhaust stream.
v. 'Emissions Testing Requirements'
The purpose of the emissions testing requirements in Part 222 is to ensure that sources subject to the rule meet the emission standards set forth in the rule. Emergency generators are exempt from this provision since this class of sources will not be subject to any emission limits. Sources subject to emission limits must be tested by April 30, 2017 and must undergo additional emissions testing once every 10 years.
vi. 'Record Keeping Requirements'
The purpose of the record keeping requirements (hours of operation, fuel use, etc.) is to ensure that sources are operating within the requirements of Part 222 and other applicable requirements.
vii. 'Modifications to Part 200 and Subpart 227-2'
The definition of "stationary internal combustion engine" under current 6 NYCRR Subpart 227-2.2(b)(11) will be removed and added to Section 200.1 since the term will now be applicable to multiple regulations.
The NOx emission limits set forth in Part 222 are based upon emission limits set forth in Subpart 227-2 (NOx RACT) adopted in February 2004. Older model DG sources may need to be modified (e.g., combustion modifications or the addition of pollution control equipment) in order to meet the emission limits set forth in Part 222. A selective catalytic reduction (SCR) system or a non-selective catalytic reduction (NSCR) system may be required in order to meet the NOx emission limit. The Department estimated the compliance costs for two engine sizes: 1200 hp and 2000 hp. The costs for installing and operating post-combustion pollution control equipment are presented in the next two subsections. As a point of comparison, replacement costs for new 1200 hp or 2000 hp engines that meet the NSPS requirements range from $525,000 to $1,000,000.30,31
'Selective Catalytic Reduction (SCR) Systems'
Selective catalytic reduction systems can reduce the NOx emissions from lean-burn natural gas fired-engines and diesel-fired engines by up to 90 percent.32 The capital cost (installed) of SCR control systems are presented in Table 5.
Table 5: Capital Costs for SCR Systems
SCR System33 $103,000 $171,700
Testing34 $15,000 $15,000
It is anticipated that catalysts will need to be replaced every five years.35 Replacement catalysts are estimated to cost 7 percent of the original SCR system cost. In the cost analyses conducted by DEC, the cost of installing the replacement catalyst was assumed to be 60 percent of the cost of the new catalyst.
Operational costs vary depending upon several factors. The primary driver is the reagent (urea) cost. The NOx rate from pre-NSPS lean-burn engines is approximately 9 g/bhp-h requiring a control level of 83 percent to meet the 1.5 g/bhp-h standard. Current model year lean-burn engines have a NOx emission rate of 1.0 g/bhp-h without post-combustion controls and will not be subject to Part 222. Pre-NSPS compression ignition engines have a NOx emission rate of approximately 11 g/bhp-h requiring a control level of 79 percent to meet the 2.3 g/bhp-h standard. Compression ignition engines manufactured between 2007 and 2013 would need a lower control level in order to meet the standard. Compression ignition engines manufactured after 2014 will be certified to meet emission rates less than 2.3 g/bhp-h pursuant to the NSPS rule36 and will not be subject to Part 222. The other operational factors DEC considered in developing cost estimates for SCR systems were insurance, maintenance and labor costs.
'Non-Selective Catalytic Reduction (NSCR) Systems'
Non-selective catalytic reduction (NSCR) systems can reduce the NOx emissions from rich-burn natural gas fired-engines by up to 98 percent.37 The capital cost (installed) of NSCR control systems are presented in Table 6.
Table 6: Capital Costs for NSCR Systems Cost Component 1200 hp Engine 2000 hp Engine SCR System $26,700 $44,400 Installation $16,000 $26,700 Taxes $2,100 $3,500 Testing38 $8,000 $8,000 Total Cost $52,800 $82,600
Table 6: Capital Costs for NSCR Systems
Testing38 $8,000 $8,000
NSCR catalysts need to be replaced every five years.39 Replacement catalysts are estimated to cost 7 percent of the original NSCR system cost. In the cost analyses conducted by DEC, the cost of installing the replacement catalyst was assumed to be 60 percent of the cost of the new catalyst. Annual costs for operating NSCR include insurance, maintenance and labor.
The NYSDEC evaluated the costs for operating NSCR systems under a wide range of scenarios over a 10-year period. The cost per ton of NOx reduced is less than $5,000 when operating more than 200 hours per year.
'PM Emissions'
Particulate control equipment (e.g. - particulate traps or oxidation catalysts) may be required in order for some sources to comply with the particulate emission standard. The costs for particulate control equipment are approximately $55 per kW installed ($49,200 - $82,000 for the engine sizes discussed in this section).40
The emission testing costs are estimated to be $8,000 (NOx only) to $15,000 (NOx and PM) per source41. Emission testing must be performed once every ten years. Emission testing for PM is not required for engines equipped with pollution control devices verified by the California Air Resources Board (CARB) as meeting the Level 3 or Level 3 Plus Classification per the California Code of Regulations, Title 13, Sections 2700 through 2711.
'Record keeping'
The costs to comply with the record keeping requirements are expected to be minimal. Data may be maintained on a spreadsheet. The tasks involved will include reading flow meters, etc. and entering the data on a spreadsheet.
'Cost to the Department of Environmental Conservation to Implement Part 222'
The primary workload for implementing Part 222 will be writing permits, reviewing stack test reports and creating compliance reports in the Air Facility System database. It is estimated that it will take one staff-year ($137,200)42 to initiate the program to implement Part 222 and five (5) staff-years ($686,000) annually to implement Part 222. The Department does not anticipate hiring additional staff to implement Part 222.
'Costs to Other State Agencies and Local Governments'
The Department will be responsible for implementing Part 222. Therefore, no costs will be incurred by other state agencies or local governments in this regard. However, other state agencies and local governments may operate DG sources subject to the provisions of Part 222; in which case these entities will have the same compliance costs as any other facility.
VII. Paperwork
The record keeping requirements set forth in Part 222 are not expected to be burdensome since the data that must be recorded each month should be recorded as a standard business practice currently. For example, facilities should be maintaining records of fuel purchases in order to prepare financial statements. In addition, maintenance activities should be recorded in order to keep a warranty in effect.
VIII. Local Government Mandates
The Department would be responsible for implementing and enforcing Part 222. The record keeping, emissions testing and reporting requirements for local governments, school districts or fire departments that have DG sources subject to Part 222 will be identical to those requirements imposed on all facilities in the state.
IV. Duplication Between This Regulation And Other Regulations And Laws
The EPA promulgated NSPS rules for new engines and turbines. The stricter of the NSPS or Part 222 standards will apply in cases where sources are subject to both regulations. The federal rules (40 CFR 60 Subparts IIII, JJJJ and KKKK) are further discussed in other sections of this document.
The Department evaluated four alternatives in addition to the proposed rule:
Regulatory Assistance Project (RAP) Model Rule
Modifying the Definition of Emergency Generators to Include Demand Response Sources
Capping the Number of Sources Enrolled in Demand Response Programs at 2002 Levels
These alternatives are described below along with the reasons why they were rejected.
i. 'No Action'
Under the "No Action" alternative, the Department would not establish emission limits, emission testing, and record keeping requirements for DG sources. New DG sources would be subject to emission limits and emissions testing requirements pursuant to the federal NSPS rules. Emissions from DG sources enrolled in demand response programs would remain unregulated with the potential to significantly contribute to future contravention of the ozone NAAQS on high electric demand days. The reductions in NOx emissions from DG sources that would result if the proposed rule is adopted would not be realized under the No Action alternative and, as a result, it would be difficult for New York to demonstrate compliance with the 2008 ozone NAAQS.
In addition, if no reporting or record keeping requirements are established through the promulgation of Part 222, the Department would not be able to monitor the use of DG sources or estimate the emissions from this sector. Since records, identifying the number and locations of DG sources, are not currently required to be maintained, the Department would be unable to take appropriate action in a timely manner to protect people who are exposed to emissions from these sources.
ii. 'Regulatory Assistance Project Model Rule'
The Regulatory Assistance Project (RAP) developed a model rule in 2002 for regulating DG sources pursuant to a contract with the United States Department of Energy. The model rule has been adopted with modifications by a few states, including Connecticut and Massachusetts. Staff from state environmental agencies served as co-coordinators of RAP's working group. The Department was not a member of the working group. The Department reviewed the model rule and determined that it does not meet the needs of New York State.
While existing DG sources were not addressed in the model rule, emission standards for new DG sources were proposed. The following NOx emission limits were proposed in the model rule (in units of g/bhp-h):
Table 4: NOx Standards in the RAP Model Rule
NOx 0.20 0.10 0.05
Applicability is based upon the year that a source was manufactured. Compliance with these standards would be the responsibility of the manufacturer of a DG source.
The NOx emission limit that would apply to sources manufactured prior to 2008 (0.20 g/bhp-h) under the model rule was impracticable as of November 2013. Similarly, the lower NOx standards that would apply to DG sources manufactured in the later years under the RAP Rule (0.10 g/bhp-h and 0.05 g/bhp-h) cannot be justified. Some models of microturbines would need to be equipped with post-combustion controls in order to meet these limits. Such a requirement would deter investment in microturbines and, for that matter, all combustion-based DG technologies. The end result would be a ban on the further installation of new DG sources and a continued reliance on existing DG units, which do not have any of the pollution controls necessary for New York to achieve attainment under the 2008 and 2015 ozone NAAQS.
Since the RAP working group allowed each state to develop its own strategy for regulating existing DG sources, it was unable to evaluate how the model rule would interact with a rule for existing DG sources. One of the Department's primary goals in developing Part 222 was to create a regulatory structure that would encourage the replacement of old, inefficient DG sources. The Department rejected the model rule since it would be a deterrent to investment in new DG sources and conflict with Part 222's objectives.
iii. 'Modifying the Definition of Emergency Generators to Include Sources Enrolled in Demand Response Programs'
Some stakeholders suggested that the definition of emergency generators should be modified to include sources enrolled in demand response programs as was done by Connecticut and Massachusetts.43 If this was done, DG sources enrolled in demand response programs would be eligible for the permitting exemption set forth in Subpart 201-3 ('Permit Exempt and Trivial Activities').
However, if the definition of emergency generators was modified to include sources enrolled in demand response programs, the Department's strategy to bring the state into compliance with the 2008 and 2015 ozone NAAQS would be negatively impacted and is likely to require the adoption of more onerous controls with significantly higher cost per ton of emissions reduced for other source categories. This is of particular concern in New York City where the capacity of all existing emergency generators has been estimated to be 1,320 MW. If this estimate is accurate and all existing emergency generators are used as demand response sources, the Department estimates that NOx emissions during a demand response event could be 127 tons or more per event day. This would be an order of magnitude greater than the baseline NOx emissions for demand response sources of 13 tons/event day (sources enrolled in the NYISO programs as of May 2011)44 and it would be very difficult to balance this increase in emissions with emission reductions from other source categories.
Failure to attain the 8-hour ozone NAAQS could lead to sanctions invoked by the EPA pursuant to Section 179 of the CAA. These sanctions could include requirements for new and modified sources to obtain emission offsets at a ratio of 2:1 (currently the offset ratio is 1.3:1). Such a requirement could impose additional costs on new or expanding businesses and may ultimately discourage investment in such projects. This, in turn, could have negative impacts on employment opportunities in the affected area. As a result of these concerns, the Department rejected this alternative.
iv. 'Capping the Number of Sources Enrolled in Demand Response Programs at 2002 Levels'
The Department considered establishing caps on the number of sources enrolled in the various demand response programs in order to reduce emissions from this source category. The capacity of such units, measured in units of megawatts, would have been used as a basis for the caps. Two caps were considered, one for the NYMA and the second for the remainder of the state. The initial caps would have been based upon the 2002 enrollment data provided by demand response program sponsors. Each of the caps would have been reduced over time. This alternative was rejected because the implementation of the capping provisions would put the Department in the position of determining which demand response sources could be enrolled in a demand response program, merely as a result of approving or denying permit applications. The Department does not regulate demand response programs and the administration of those programs is not within the scope of the Department's jurisdiction.
XI. Federal Standards
The federally enforceable particulate emission standard set forth in Part 227 for stationary combustion installations is 0.10 lb per million British thermal units pursuant to the New York State Implementation Plan (40 CFR 52.1679). This limit is analogous to the particulate emission limit in Part 222.
The EPA promulgated three NSPS rules that apply to new DG sources. The Department is proposing to rely on the federal NSPS rules as the standards for new DG sources except in cases where Part 222 is more stringent than the federal limits, in which case Part 222 would apply. Summaries of these rules are presented in the following subsections.
i. '40 CFR 60, Subpart IIII (diesel engines)'
This NSPS rule was published in the Federal Register on July 11, 2006 (71 Fed. Reg. 39154). The rule establishes NOx and PM emission limits based upon the model year, size and use of the engine. The NOx standards range from 0.30 to 2.6 g/bhp-h for sources of model years 2011-2014. Thereafter, the NOx standards will range from 0.30 to 0.50 g/bhp-h. The PM limits for small engines will be 0.01 g/bhp-h for model year 2012 and beyond. For large engines, the PM standard range from 0.02 to 0.075 g/bhp-h, with the stricter limits affecting sources of model year 2015 and beyond. Engine manufacturers must certify that the prescribed emission limits will be met throughout the useful life of the engine.
The format (units) of the PM standard set forth in Part 222 is identical to those in Subpart IIII. This allows for a simple comparison of the compliance requirements for the two rules. Engines certified as meeting the Subpart IIII PM standard are not subject to the PM standard in Part 222 since the NPSP PM standards are less than or equal to or more stringent than the Part 222 PM standard.
ii. '40 CFR 60, Subpart JJJJ (spark ignition engines)'
This NSPS rule was published in the Federal Register on January 18, 2008 (73 Fed. Reg. 3568). This rule covers engines fired with natural gas, LPG, gasoline and biogas. Emission standards for NOx, CO, and non-methane hydrocarbons are set forth in the rule. Non-emergency engines manufactured from July 2007 through 2010 were subject to a NOx standard of 2.0 g/bhp-h and a CO standard of 4.0 g/bhp-h. Non-emergency engines manufactured thereafter are subject to a NOx standard of 1.0 g/bhp-h and a CO standard of 2.0 g/bhp-h. Biogas-fired engines manufactured in 2011 and beyond are subject to a NOx standard of 2.0 g/bhp-h.
iii. '40 CFR 60, Subpart KKKK (turbines)'
This NSPS rule was published in the Federal Register on July 6, 2006 (71 Fed. Reg. 38482). The rule applies to turbines with a heat input greater than 50 mmBtu/hr. Two pollutants are covered in this NSPS: NOx and SO2.
The NOx emission limits differ depending on the size of the turbine and the fuel used. The NOx emission limits range from 0.15 to 0.78 g/bhp-h for natural gas-fired sources and 0.44 to 1.86 g/bhp-h for turbines fired with any other fuel.
XII. Compliance Schedule
On the effective date of this rule, Part 222 will apply to DG sources that meet the following applicability thresholds:
Mechanical output rating of 200 horsepower (hp) or greater for DG sources located in the NYMA; and
Mechanical output rating of 400 hp or greater for sources located outside of the NYMA.
Also on the effective date of this rule, the maintenance and testing of emergency generators will be prohibited during the hours of 1:00 pm through 8:00 pm during the period of May 1 through September 30 of each year.
By January 2, 2017, owners or operators of DG sources that are required to operate under permits or registration certificates must notify the Department whether the sources will be operated as emergency generators or economic dispatch sources. In cases where such notification is not provided by the compliance date, the DG source will be considered an economic dispatch source for regulatory purposes.
On May 1, 2017, the following NOx emission limits will apply to economic dispatch sources subject to Part 222:
natural gas-fired simple cycle combustion turbines: 50 parts per million by volume on a dry basis (ppmvd) corrected to 15 percent O2;
oil-fired simple cycle combustion turbines: 100 ppmvd corrected to 15 percent O2;
natural gas-fired combined cycle combustion turbines: 25 ppmvd corrected to 15 percent O2;
oil-fired combined cycle combustion turbines: 42 ppmvd corrected to 15 percent O2;
natural gas-fired engines: 1.5 g/bhp-h;
Also, on May 1, 2017, diesel-fired DG sources must be in compliance with one of the following requirements regarding particulate emissions:
By April 30, 2017, owners and operators of DG sources subject to an emission limit(s) must conduct an initial emissions test to demonstrate compliance with the emission limits set forth in Part 222. Additional testing must be conducted at a frequency of once every 10 years. Also, the rule requires owners and operators of DG sources to notify DEC 60 days prior to testing and submit a copy of the test report to DEC within 60 days following the test. Records of the emission tests must be maintained, and made available to the DEC.
Emissions testing for PM is not required for engines equipped with pollution control devices verified by CARB as meeting the Level 3 or Level 3 Plus classification per the California Code of Regulations, Title 13, Sections 2700-2711.
1 "Stationary Diesel Engines in the Northeast: An Initial Assessment of the Regional Population, Control Technology Options and Air Quality Policy Issues", NESCAUM, June 2003, pg. 26.
2 Facilities may accept a more restrictive operational limit in order to avoid triggering certain regulatory thresholds such as new source review (Part 231).
3 "Stationary Diesel Engines in the Northeast: An Initial Assessment of the Regional Population, Control Technology Options and Air Quality Policy Issues", NESCAUM, June 2003, pg. 26.
4 www.epa.gov/chp/basic/efficiency.html. Downloaded 8/6/13.
5 "Micropower at the Crossroads", Environmental Advocates of New York et. al., December 11, 2002, page 22.
6 "NYSERDA's CHP Program: Moving the Market Forward", Dana Levy and Brian Platt. Presentation at the NYSDPS CHP Technical Conference, May 13, 2013.
7 In addition to the NYISO, demand response programs are sponsored by the Demand response programs are sponsored by the NYISO, Long Island Power Authority (LIPA), New York Power Authority (NYPA) and Consolidated Edison Company of New York (Con Edison).Long Island Power Authority (LIPA), New York Power Authority (NYPA) and Consolidated Edison Company of New York (Con Edison).
8 E-mail to Alison Crocker (NYSDEC) from Steve Pellechi (LIPA) dated 7/8/05.
9 Source: E-mail to Alison Crocker from Jim Yates (NYPA) dated 7/8/05.
10 NYSERDA. Source of data: E-mail to John Barnes (NYSDEC) from Christopher Smith (NYSERDA) dated 7/12/05. NYSERDA does not sponsor a DR program but assists facilities enrolling in such programs.
11 Many of these sources could still be enrolled in demand response programs.
12 "Compilation of Air Pollutant Emission Factors, Volume I, Stationary Point and Area Sources", USEPA, January 1995, page 3.3-3.
13 Letter from Nathanael Greene (Natural Resources Defense Council) to Robert Sliwinski and John Barnes (NYSDEC) dated January 10, 2003. Attachment 1, page 1.
14 40 CFR 60, Subpart IIII, Table 1.
15 "Air Quality, Electricity, and Back-up Stationary Diesel Engines in the Northeast", Northeast States for Coordinated Air Use Management, August 1, 2012, page 20.
16 "2011 State of the Market Report for the New York ISO Markets", Potomac Economics, April 2012, page A-118.
18 "NYISO - Called Events & Tests", posted on the NYISO website April 4, 2013.
20 "Semi-Annual Compliance Report of Demand Response Programs", New York Independent System Operator, June 1, 2011.
22 AP-42, Section 3.4 "Large Stationary Diesel and All Stationary Dual-fired Engines", October 1996, Table 3.4-1.
23 "New York City Energy Policy: An Electricity Resource Roadmap", New York City Energy Policy Task Force, January 2004, page 32.
24 At which point such sources would no longer be considered emergency generators.
25 "Health Effects", EPA (www.epa.gov/airquality/ozonepollution/health.html)
27 USEPA, www.epa.gov/pm/health.html
28 6 NYCRR 227-2.4(f).
29 A renewable generation system is defined in Section 222.2 as a photovoltaic or wind power electricity generating system.
30 E-mail from Joe Suchecki (Truck & Engine Manufacturers Association) to John Barnes (DEC) dated November 8, 2013.
31 Replacement costs as well as the costs for pollution control systems could be higher than the costs presented in this section in cases where there are space limitations or building or fire code requirements that must be met.
32 "NOx Control for Stationary Gas Engines", Wilson Chu (Johnson-Matthey), Advances in Air Pollution Control Technology, MARAMA Workshop, May 19, 2011.
33 Sources: CARB 2010. Regulatory Analysis for Revisions to Stationary Diesel Engine Air Toxic Control Measure. Appendix B. Analysis of Technical Feasibility and Costs of After-treatment Controls on New Emergency Diesel Engines; and (2) Producer Price Index, U.S. Department of Labor, Bureau of Labor Statistics.
34 Testing costs include NOx and PM tests (diesel engines). For natural gas-fired engines, the estimated cost is $8,000 for NOx tests only.
35 E-mail from Wilson Chu (Johnson Matthey) to John Barnes (DEC) dated January 24, 2008.
36 40 CFR 60, Subpart IIII
37 "NOx Control for Stationary Gas Engines", Wilson Chu (Johnson-Matthey), Advances in Air Pollution Control Technology, MARAMA Workshop, May 19, 2011.
38 Emissions tests for NOx only since the PM standard does not apply to natural gas engines.
39 E-mail from Wilson Chu (Johnson Matthey) to John Barnes (DEC) dated January 24, 2008.
40 Sources: CARB 2010. Regulatory Analysis for Revisions to Stationary Diesel Engine Air Toxic Control Measure. Appendix B. Analysis of Technical Feasibility and Costs of Aftertreatment Controls on New Emergency Diesel Engines; and (2) Producer Price Index, U.S. Department of Labor, Bureau of Labor Statistics.
41 Stack testing costs are based upon an informal Department survey of several stack testing companies.
42 Assumptions: Grade 24 pay rate of $88,258 per year and an overhead rate of 55.48 percent.
43 Letter from David F. Bomke et. al., New York Energy Consumers Council, Inc. dated February 4, 2005.
44 The capacity (in MW) of sources enrolled in the demand response programs sponsored by transmission operators is not known and the NYISO estimate may be low since sources could enroll in the EDRP after the date of the report (June 2011).