9 NEWYORK January 28, 2016 Mr. John Barnes, PE, NYSDEC, Division of AirResources 625 Broadway ‘Albany, NY 12333-3251 RE: Proposed Rulemaking: Amendment of Part 200, Subpart 227-2, and addition of Part 222 to Title 6 NYCRR (Distributed Generation (DG) Sources That Feed the Distribution Grid for Use at Hot Facilities or Both) Dear Mr. Barnes: ‘Thank you forthe opportunity to provide comments an the New York State Department of Environmental Conservation's ("NYSDEC") proposed Part 222 Distributed Generation Regulations, The New York Energy Consumers Coun (*NYECC"? is the largest rate case Intervener representing large energy users in Con Edison's service territory. The Real Estate Board of New Vork ("REBNY") represents nearly 17,000 owners, developers, managers, and brokers of real property in New York City. The Building Owners and Managers of Greater New York ("2OMA/NY") represents more than 750 owners, property managers, and building professionals who either own or manage 400 milion square feet of commercial space. Collectively, we represent more than 100 customers that participate in emergency demand response ("DR") programs administered by Con Edison and/or by the New York Independent system Operator (“NYISO") To participate in these programs, many of our members utlize emergency generators located in ‘their buildings. These emergency generators provide necessary backup power in the event of floods and other natural disasters and other grid interruptions. When these emergency ‘generators are enrolled in DR programs, grid operators can dispatch them when there isan Immediate threat to the stability ofthe electric grid, When these emergency generators aredispatched, the buildings that house the generators arene longer consuming power from the electric grid, providing much needed relief to the grid that prevents brownouts and blackouts. (Our members are extremely environmentally conscious and focused on sustainability. In that vein, we applaud the Cuomo administration for its strong efforts to date to improve environmental outcomes, strengthen resiliency, and advance New York asa leader in clean energy. We believe these efforts will make New York a better place to live and de business. However. to truly continue this postive rend, a earve-out Icnaedod ta the proposed Part 29 regulations with respect to emergency generators participating in emergency DR programs. We ‘would not oppose these regulations If tis common sense carve-out were implemented. ‘The carve-out must allow for emergency generator use in emergency DR programs (2g, the 'Nv1SO Special Case Resource Program) for up to 100 total hours annually (including testing and maintenance) with up to 50 of those hours to be used for transmission emergency DR (e, the Con Edison Distribution Load Relief Program) to comply with the US Environmental Protection Agency ("EPA") engine regulations (40 CFR 63 Subpart 2222 and 40 CFR 60 Subparts Wand uy. There are three major reasons why this carve-out should be implemented: 4, The regulations, as currently drafted, could inadvertently increase ozone concentrations. ‘Ata minimum, it will not move New York closer into attainment with ozone requirements. ‘The EPA analyzed the use of emergency engines in emergency DR programs over a three-year period and concluded that there is no direct correlation between the use of emergency ‘generators for emergency DR and ozone exceedances: While the EPA acknowiedges that emergency DR may be called during HED? in the summer when days are especially warm and azone is problematic, the use of emergency DRat such times cannot be directly corre in ing.to the ozone ‘exceedances. Als, the fact s that many DR events occur on days when ozone standards ‘ware not exceeded and in many cases ozone levels are high or higher on days before a (Ok event, according to avalable data.” (Emphasis added) in ay, 2015, an Appeals Court found EPA arbitrary and capiious regarding its changes to the engine ulations, The Court granted EPA a stay unt May 1, 2036 to address the Court's concerns, * High Electric Demand Day * EPA Response to Public Comments on Proposed Amendments to National Emission Standards for Hazardous Ar Pollutants for Ensting Stationary Reciprocating Internal Combustion Engines and New Source Performance Standards for tatonaty Internal Combustion Engines; EPA Docket EPAHO-OAR- 2008-0708-1491; fanuary 36,2033; pages 133-134Even ifthese generators were to contribute to ozone exceedance when dispatched for DR programs, ite a negligible amount, Prohibiting their use would not move New York closer to attainment with ozone requirements. Since 2001, the NYISO emergency DR program has been called on average of only 7.6 hours per year. Building owners who routinely test thelr ‘emergency generators do not have to test them when there is a DR dispatch, as the dispatch can count in iew of the test. Therefore, the 7.6 hours per year is hardly incremental or consequential to ozone exceedance for emergency generators participating in DR. Over the past five years, Con Ed's DLRP has been called on average of only 4 hours per year. Further, these emergency generators are only used during system emergencies to prevent brownouts and blackouts, When DRis activated, it Isto counteract the rising probability of bbrownouts or a complete blackout from occurring, Its better to use a subset of generators for a short period of time to avoid a blackout, rather than running every generator, whether properly permitted or not, for hours or days during a blackout until the electric grids restored. EPA allows these emergency generators to participate in emergency DR programs because they serve asa pre-emptive and necessary safeguard to the electric grid. As noted in EPA's Response to Comments (January 14, 2013 NESHAP Docket Memo EPA-HQ-OAR-2008- (0708-1491), EPA concluded: ‘The EPA does not agree that emissions of diesel exhaust are likely to go up significantly ‘compared tothe estimates used inthe original rule, given the very limited usage of such Jn emergency OR. Itis worth noting that the circumstances during which these engines willbe permitted to run under the 1 would prevent | blackouts, which, if not prevented, would mean the use of all emergency engines inthe affected areo, which would create substantially greater emissions from diesel engines than ifthese limited emergency DR engines are used for a short period of time, (Emphasis added) ‘Our members also earn revenue for participating in DR programs, which many members reinvest in clean energy initiatives such as energy efficiency. These initiatives result in much inure sable, perinanent reductions in emissions than any negligible increase in emissions thet ‘may occur from participation in DR programs. Without the DR revenues, these clean energy Investments might not be made at allo willbe delayed. In addition, independent experts recognize that the upgrades required by the Part 222, regulations as drafted could negatively impact the operational capabilities for emergency generators that do not operate for long periods, and cast doubt on emissions benefits. For ‘example, in a detalled study of this issue, the California Air Resources Board found that:SR systems require an operating temperature between 260°C to 540°C. Reaching these temperatures may be difficult in routine maintenance and testing operations where the engine is typically operated at low load for short periods of testing, IFthis tem ‘Hot met while the engine is running I not be any NOx emission seduction benefits. To circumvent this problem, the engine would need to be operated with higher loads and in many cases for longer periods of time, This could be a challange for most emergency standby applications az most businezzes do not have load banks in house and would have to create a larger load on the engine to get the catalyst, up to operational temperature. Urea handling and maintenance is also an important consideration, Urea crystallization inthe lines can cause damage to the SCR system and to the engine Itself. Crystallization inthe lines is more likely in emergency standby engines due to ther periodic and low hours of usage. Urea also has a shelf life of approximately two years. This could increase ‘the cost of operating a SCR for emergency standby engines since the low number of annual hours of operation experienced by most emergency standby engines could lead ‘0 urea expiration. The urea would then have to be drained and replaced, cresting an extra maintenance step and an increased cost to the end user. * We are deeply concerned with any regulation that would nat reduce emissions but could Jeopardize the operational effectiveness of emergency generators, especially during a blackout. 2. tls neither economically nor technically feasible for emergency generator owners to upgrade to the level proposed. [NYSDEC justifies the Part 222 regulations by concluding that upgrading the generators using Selective Catalytic Reduction (*SCR") is both economically and technically feasible. NYSDEC defines the upgrade as economically feasible ifthe cost is below $5,000/ton’ . Unfortunately, the assumptions supporting NYSDEC’s calculation are incorrect. NYSDEC assumes that pre-NSPS* generators operate for 1,500 hours per year or more and post: NSPS generators operate for 3,000 hours per year or more. However, these generators have * AR®, Stoff Report: Ito tot of Reasons for Proposed fulemoking Proposed Amendments othe ‘Airborne Toxic Control Measures fr Stationary Compression Ignition Engines (September 2010) at ‘Append, pp. 85-8: avallable at http://www arb.cagov/regact/2010/atem2010/atemappb pt. (hercinafter, the “ARB ATOM Report") ® NYSDEC, DAR-20 Economic and Technical Analysis for Reasonably Available Control Technology (RACT), Effective October 18,2013 * New Source Performance Standardsnever operated close to this amount (most backup generators in New York have a SOO-hour per year limit), nor would they with the upgrades. Generators operating in emergency OR programs need only be avallabe for less than 100 hours per year (including testing and maintenance) plus an allowance for use during blackouts. IFthe 500 hours per year is used to calculate the cost of avoiding a ton of NOx emissions, the cost rises closer to $25,000/ton, which is far above NYSDEC's definition of economically feasible. Ifthe 100 hour limit is used then the cost rises fivefold to $75,000/ ton. It should also be noted that there are serious technical feasibility onstrants as well, mst notably the sgnlficant addtional space required to add SCR technology, which many buildings might not be able to meet. ‘The EPA also concluded that add-on controls for emergency engines are not cost effective: ‘The EPA evaluated the cost effectiveness of add-on controls for emergency engines that are used a very limited number of hrs/yr for emergency situations and required maintenance and testing, Because these engines ae typically used only a few hrs/yr, the costs af add-on emission control are not warranted when compared to the emission reductions that would be achleved. The few hrs/yr historically required for emergency OR does not change this analysis, which indicate very high costs per ton of emissions reduced.” In that same document EPA noted (on page 20} [A standard that requites owners and operators of stationary emergency engines that participate in emergency DR programs to apply after treatment, as well a testing and ‘other resulting requirements, could make it economically and/or practically infeasible for these engines to participate in these programs, impairing the ability of RTO and ISO to.use these relatively small, uick starting and reliable sources of energy to protect the reliability oftheir systems in times of critical need. In spite of the fact that the upgrades would almost certainly not be economically feasible, the ‘owners of emergency generators would stil have to flle for exemptions with NYSDEC on an Individual basis, This would create a massive administrative burden on NYSDEC, an agency that hhaz2e0n a large depletion in itz workforce, with no material benefits ta the Ageney or to air {quality would also cause complete uncertainty amongst emergency generator owners. ” EPA Response to Public Comments on Proposed Amendments to National Emision Standards for Hazardous Ar Pollutants for Existing Stationary Reciprocating internal Combustion Engines and New Source Performance Standards for Stationary Internal Combustion Engines; EPA Docket EPAHQ-OAR- 200807081491; January 14, 2013Page 85‘The requested carve-out would save NYSDEC and owners of emergency generators from this ‘unnecessary administrative burden. Accordingly, the proposed carve out represents public policy specifically tailored for NYSDEC to utlizeits scarce resources more effectively and efficiently, 3. The proposed regulation will negatively impact upon energy costs, and grid reliability and resiliency. ‘Ashas been recognized time and again by the New York State Public Service Commission, ‘demand response reduces consumers’ energy bill. This is critical in New York where our businesses face the highest energy costs in the country. Removing these resources from the NNY1SO market alone could increase prices from between $125 and $150 milion per year." ‘Not only is DR an insurance policy against blackouts, butt also helps ensure that emergency generators are well-maintained. This i because omergency generators have to undergo seasonal testing for DRifthey are not dispatched for an event. In the case of another superstorm lke Sandy or worse, grid resiliency could be weakened ifthese emergency {generators have nat undergone routine testing. Conclusion Rather than make these cost-prohibitive upgrades to participate in DR, our members and other {emergency generator operators will imply forego participation in the Con Edison and NYISO OR programs to the collective detriment of all New Yorkers. Therefore, we respectfully urge that a carve-out be created similar to the EPA's exception that exempts upgrades for emergency ‘generators participating in emergency DR. * consumer impact Analysis: Provisional & Inremental ACL fr SCR Tariq N. Niaz. Senior Manager, Consume interest Uialson. New York Independent System Operator. Joint ICAP and PRL Warking Groups. June 24,2013,\youhave any questions, please contact Olane Sweeney at Diana Sweeney @nyecc.com or 212 6616-5118. Thank you for this opportunity to provide comments Slocerely, lana Sweeney cor Hum Daniel Avery Executive Director Senior Vice President Director of Legislative New York Enerey Real Estate Board of New Alfaies Consumers Counell York BBOMA New York Sen. John A, DeFrancisco, Deputy Majority Leader for Legislative Operations, New York State Senate Sen. John J Flanagan, Temporary President, New Vork State Senate Rep. Carl Heasti, Speaker, New York State Assembly Richard Kauffman, Chalrman of nergy & Finance Jeffrey D Kein, Independent Democratic Conference Leader, New York State Senate op. ran Kolb, Minority Leader, New York State Assembly Matt Millea, Deputy Director of State Operations for Administration Rep. Joseph D. Morell, Majority Leader, New York State Assembly Bill Muro, Secretary tothe Governor asl Seggos, Acting Commissioner, NYSDEC Andras Stewart-Cousins, Democratic Conference Leader, New York State Senate Peter Walke, Assistant Socretary for the Environment, Office of Governor Andrew M Cuomo ‘Audrey Zibelman, Char, New York tate Public Service Commission