An update on regulatory options for emergency engines providing emergency demand response after the May 2, 2016 Vacatur from the U.S. Court of Appeals for the D.C. Circuit

1. Applying our technical expertise
to a more sustainable world…
While every effort has been made to ensure the accuracy of this information, SC&A is not
responsible for any errors or omissions. This information is not a substitute for professional
environmental consulting services. If legal services are required, consult with legal counsel.
Emergency Engines:
Emergency Demand Response
While every effort has been made to ensure the accuracy of this information, SC&A is not
responsible for any errors or omissions. This information is not a substitute for professional
environmental consulting services. If legal services are required, consult with legal counsel.
Andrew D. Shroads, QEP
Regional Manager
P.O. Box 1276 • Westerville, OH 43086
 (614) 887-7227 •  ashroads @ scainc.com

2. sc&a
Regulations
Federal RICE Regulations:
Same requirements for emergency RICE in all 3 regulations
Title 40 of the Code of Federal Regulations, Part 60 (40 CFR
60), Subpart IIII: Compression Ignition (CI) Engine New Source
Performance Standard (NSPS)
• CI RICE constructed after July 11, 2005
40 CFR 60, Subpart JJJJ: Spark Ignition (SI) Engine NSPS
• SI RICE constructed after June 12, 2006
40 CFR 63, Subpart ZZZZ: Reciprocating Internal Combustion
Engine (RICE) National Emissions Standards for Hazardous Air
Pollutants (NESHAP)
• All new and existing CI and SI RICE

3. sc&a
RICE Categories
Emergency RICE:
Provide electrical or mechanical power during an emergency
• Loss of electrical power; and/or
• RICE needed during emergencies (flood pumping)
Exempted from EPA emissions standards
Non-emergency operations limited to ≤100 hours per year
• Emergency demand response (EDR) limited to ≤50 hours
per year (counts towards non-emergency operation total)
Unlimited emergency use
Non-emergency RICE
No restrictions on use
Must meet EPA emissions standards

4. sc&a
Some Non-Emergency Acceptable Uses
Emergency Demand Response Program
Reducing electrical demand at a site
• Shutting down non-essential systems; and/or
• Generating onsite electrical power (reducing need
for utility electrical power)
Sites financially reimbursed for participating in program
EDR prevents grid collapse (blackout/brownout)
Voltage/Frequency Deviation (V/FD)
Supplied electrical power lower than standard by ≥5%
Local Balancing Authority / Transmission Dispatch
Electric power is requested by the local balancing authority to
avert interruption of local electrical power

5. sc&a
Regulatory History of EDR
In 2010, EPA allowed Emergency RICE to participate
in an EDR program for ≤15 hours
In a 2013 RICE rule revision, EPA expanded the EDR
exemption for Emergency RICE to ≤50 hours
Delaware Department of Natural Resources & Environmental
Control and several industry groups (petitioners) challenged
that EPA “arbitrarily and capriciously” raised the EDR limit
On May 1, 2015, U.S. Court of Appeals for D.C. Circuit ruled:
• EPA did not address petitioners’ comments in rulemaking
• EPA relied on faulty evidence to limit EDR to ≤100 hours
• EPA did not seek input from grid regulatory agencies
EDR and V/FD vacated (removed) from RICE NESHAP & NSPS
• EPA was granted a 1-year extension to May 1, 2016
On March 31, 2016, 2015 EDR usage reports due to U.S. EPA

6. sc&a
Today’s EDR Actions
On April 15, 2016, EPA drafted a memorandum explaining
that it will not seek to stop the court from vacating the ≤50
hours per year EDR and V/FD allowance for Emergency RICE
On May 2, 2016, the court was expected to vacate
the EDR and V/FD allowances for Emergency RICE
• The EDR and V/FD provisions for Emergency RICE
have been removed from the RICE NESHAP & NSPS
EPA did not give a reason why it was not continuing the case
• May not be worth the effort and expense for a new rule
• Emissions impacts for EDR may be higher than expected
• Annual report may include new information

7. sc&a
Types of Exemptions
Regulatory Exemption vs. Emissions Exemption
The RICE NESHAP exempts some existing Emergency RICE at
area sources that are not obligated to operate for >15 hours
per year in an EDR or V/FD program [§63.6585(f)]
• These sources are exempted from the entire RICE NESHAP
• The Vacatur removes >15 hour restriction for EDR & V/FD
• EPA stated in its April 15, 2016 Memo that the RICE
NESHAP does not revert back to the 15 hour per year EDR
exemption because of the Vacatur
Other Emergency RICE are exempted from the emissions
limits and control requirements of the RICE NESHAP
• Sites must comply with RICE NESHAP applicable
requirements for Emergency RICE

8. sc&a
What Happens Now?
If you have Emergency RICE that participate in an EDR
program, determine the impact to your site
• Your electricity provider already should have contacted you
regarding your future EDR options and responsibilities
• Have an attorney review your contract to determine your
EDR responsibilities and options
• Can you meet your EDR commitments by
only shutting down non-critical systems?
• Are you obligated to reduce demand by
using your Emergency RICE?
• Hope for a cool summer
◦ Less Air Conditioning = Less Demand

9. sc&a
Regulatory Options - 1
The court’s Vacatur only affects EDR participation for Emergency
RICE. Other categories of RICE are not affected by the Vacatur.
Non-emergency RICE
• Replace existing RICE with new, certified RICE
• Comply with existing non-emergency RICE requirements
Existing RICE categories with no emissions limits:
• Area Source CI RICE ≤300 Horsepower (HP)
• Area Source 2-stroke Lean Burn (2SLB) SI RICE
• Area Source 4SLB SI RICE ≤500 HP
• Area Source 4-stroke Rich Burn (4SRB) SI RICE ≤500 HP
• Major Source CI and 4SRB SI RICE <100 HP
• Major Source 2SLB/4SLB SI RICE <100 HP & >500 HP
Limited Use RICE category
• Operate ≤100 hours per year for ANY RICE use

10. sc&a
Regulatory Options - 2
Local Balancing Authority / Transmission & Distribution System
Operator Emergency RICE dispatch to prevent electrical power
interruption is unaffected by the Vacatur [§63.6640(f)(4)(ii)]
Dispatch must follow specific guidelines
Dispatch must be necessary to prevent local power supply
interruption
Electricity provided to the facility or local electrical grid
Sites can be financially compensated for participation
≤50 hours per year for non-emergency RICE use
This provision is currently being reviewed the D.C.
District Court in another case (Case #13-1233)

11. sc&a
RICE Resources
RICE Regulation Navigation Tool (ignore EDR & V/FD)
www3.epa.gov/ttn/atw/rice/output/quiz.html
EPA Guidance on Vacatur of RICE NESHAP and NSPS for EDR
www3.epa.gov/ttn/atw/icengines/docs/RICEVacaturGuidance041516.pdf
U.S. Court of Appeals for the D.C. Circuit (Case #13-1093)
www.cadc.uscourts.gov/internet/opinions.nsf
EPA and Court Documents Regarding Case #13-1093
www3.epa.gov/ttn/atw/icengines/tech.html#other
SC&A RICE Requirements Summary
10-point summary of emissions limits, reporting, and control,
operating, and testing requirements for every RICE

12. sc&a
Thank You
Andrew D. Shroads, QEP
Midwest Regional Manager
 (614) 887-7227
 ashroads @ scainc.com 12
Any Questions?