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August 15, 2015
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For those operations that use emergency (backup) generators as part of a demand response program, a recent court decision will allow you to continue such use for up to a total of 100 hours per year, at least until May 1, 2016.  This means that the May 2015 court decision vacating and remanding the emergency generator portion of EPA’s rule will not go into effect for the remainder of this summer season and  will continue until EPA has had a chance to address the decision.

The regulation was initially promulgated in January 2013. (National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines (RICE), 40 CFR Part 63, Subpart ZZZZ; and  New Source Performance Standards for Stationary Internal Combustion Engines, 40 CFR Part 60, Subparts IIII and JJJJ.  78 FR 6674, 1/30/2013.)  In May 2015, the D.C. Circuit Court struck the portion of the rule addressing emergency (backup) generators (Delaware Department of Natural Resources v. EPA No. 13-1093, (D.C. Cir. 2015), but subsequently EPA expressed concern that the vacatur was overbroad and appeared to mistakenly encompass maintenance and testing of emergency generators.  In response, the Court has now stayed the court’s repeal of that portion of the Rule.

This means that if you are part of an emergency demand response program to address Energy Emergency Alert Level 2 conditions or periods where there is a deviation of voltage or frequency of 5 percent or more below standard voltage/frequency, you may participate for up to 100 hours per year (combined with maintenance/testing, limited non-emergency, and so-called non-emergency demand response uses, as are authorized by the rule).  Because EPA did not contest the court’s basic rejection of the expanded hourly use of the emergency engines, it is likely that the expansion of emergency demand response use from 15 to up to 100 hours will end May 1, 2016.

Because the use of the term “emergency” creates confusion in that it is applied to several levels within the definitional aspects of the rule, such as use in facility-wide power outages as distinguished from electrical grid reliability, it may be helpful to clarify the application of the rule.

The rule addresses the fact that emergency (backup) generators are exempt from otherwise applicable emissions controls (and permitting) under prescribed circumstances and therefore deserves clarification of those situations where the emergency (backup) generators may or may not operate.

Except for the use of emergency (backup) generators in emergency situations where emergency power is required (which has no hourly limit), the use of emergency (backup) generators is limited to a cumulative 100 hours of use per year.

Emergency (backup) generators may be operated for a combined total of up to 100 hours of use per year total for:

• maintenance and testing of the emergency (backup) generators per manufacturer instructions;
• emergency demand response (this is where there is either a NERC Level 2 Alert or a voltage/frequency deviation of 5% or greater);
• certain limited non-emergency use, which cannot exceed 50 hours per year of the 100-hour maximum, and cannot be for:
  • peak shaving;
  • non-emergency demand response; or
  • income generation related to supplying power to an electric grid or other entity; except that,
  • for area sources (as opposed to major sources), the non-emergency demand response use can include supplying power as part of a financial arrangement with another entity if:
    • the dispatch is by the local balancing authority or local transmission and distribution system operator;
    • the dispatch is to mitigate local issues to avert potential voltage collapse or line overloads;
    • the dispatch follows protocols modeled by NERC, regional, state, or PUC or local standards or guidelines;
    • the power is provided only to the facility itself or to the local transmission and distribution system; and
    • certain recordkeeping is kept (identity of dispatching authority and standard/guideline providing for the dispatch).

For Pennsylvania facilities, we caution that use of emergency engines for non-emergency uses may independently trigger certain state-permitting requirements, as state regulators may consider the uncontrolled non-emergency uses as counting toward state air-permit thresholds.

© 2015 McNees Wallace & Nurick LLC
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