EPA’s Final Amendments to NESHAP RICE RULES Address System Reliability Concerns

February 20, 2013

Wednesday, February 20, 2013, by Katherine Street
The Environmental Protection Agency (EPA) sought to reduce the generation of hazardous air pollutants (HAP) in 2010 by publishing “national emission standards for hazardous air pollutants (NESHAP) for existing stationary reciprocating internal combustion engines (RICE).” The main targets of the new regulations were RICE units that were operated for other than emergency purposes and that had been installed before June 12, 2006. Significant testing, records, and reporting requirements were coupled with expensive equipment retrofit requirements or restrictive operating limitations in an effort to limit the emissions of hazardous air pollutants.
Stationary RICE units are extensively used in the electric power industry to supplement the electric system by providing alternate sources of power during power outages, periods of peak electric usage, and as a source of system voltage support during certain conditions. The units may also be used to avoid emergency or pre-emergency conditions or as a measure to prevent catastrophic electric system collapse that can be caused by cascading electrical failures.
Emergency RICE v/s Non-Emergency RICE
Among other classifications, stationary RICE units are classified as either emergency or non-emergency units. The classification is significant, because the EPA imposes a much heavier regulatory burden on RICE units that do not meet the requirements for classification as emergency units. The strict operating limits that were imposed by the 2010 rules virtually guaranteed that RICE units that were operated for purposes in addition to, or other than, replacement of power during complete power system outages, or maintenance and testing, would not meet the EPA’s definition of emergency RICE. Public power providers in particular felt the impact of the RICE regulations, because a substantial number of public power utilities own older RICE units and operate them such that the units would not qualify as emergency units under the 2010 rules. The potential cost of compliance required for non-emergency RICE units likely imposes a burden sufficient to force public power utilities to abandon operation of their older units rather than undertake to retrofit them and implement extensive record keeping and reporting programs to comply with EPA’s NESHAP RICE regulations.
EPA’s Reconsideration of the Rules
The 2010 publication of the rules led the industry to express concerns that the regulations would negatively impact electric system reliability. Of particular concern was a 2010 assessment of the North American Electric Reliability Corporation (NERC) that asserted that EPA regulations were in direct opposition to the reliability of the electric system.
The EPA responded to the reliability concerns by seeking comments from the industry related to operating hour limit increases to the EPA’s emergency classification in reconsideration of the RICE rules. Public power providers, trade organizations, such as the American Public Power Association (APPA), regional transmission organizations, such as PJM Interconnection LLC (PJM), and investor owned utilities, such as Progress Energy, as well as other entities, provided input at a public meeting held by EPA in 2011 in response to the request for comments. The EPA developed proposed amendments based on the input from those in the electric industry as well as other stakeholders, such as environmental groups. A public hearing in Washington, D.C., and a subsequent comment period led to the EPA’s 2013 final NESHAP RICE rule.
2013 Amendments
The EPA amendments recognize the use of stationary RICE units as critical components of the reliability of the bulk electric system. The operation limit adjustments in the 2013 amendments allow for operation of these units in emergency demand-response situations without losing the ability to classify the units as emergency units. The ability to retain emergency classification allows the utilities to avoid a significantly increased regulatory burden. Although limited to 100 operation hours per year, the operation limitation is not further restricted by a maintenance and testing operation only requirement, but also allows operation for emergency demand-response in support of the bulk electric system and also compliance with certain load shedding capability that may be required by participation in regional transmission organizations (RTOs), as independent system operators (ISOs), or as participants in emergency demand response programs. With these and other amendments to the rules that addressed unique situations that were regionally specific, the EPA has provided electric utilities a means to use their stationary RICE units in a manner that facilitates the reliability of the electric system while avoiding the additional regulatory burden necessitated when stationary RICE units are classified by the EPA as non-emergency units.