Delaware, Others Challenge EPA Rule Allowing Longer Running of Generators

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Dec. 27 --Delaware and environmental and industry petitioners have asked a federal appeals court to vacate provisions of a 2013 Environmental Protection Agency final rule that allows backup stationary engines that generate electricity to run for up to 100 hours per year for emergency demand response without emissions controls (Del. Dep't of Natural Res. & Envtl. Control v. EPA, D.C. Cir., No. 13-1093, briefs filed 12/26/13).

In two separate briefs filed Dec. 26 in the U.S. Court of Appeals for the District of Columbia Circuit, the petitioners argued that the EPA's 2013 rule ran afoul of the Clean Air Act and would increase harmful emissions.

At issue is a rule that revised standards for reciprocating internal combustion engines, which are used in industrial, medical, agricultural, oil and gas production and power generation facilities. The 2013 rule increased the number of hours a unit could operate and qualify for an emergency engine exemption from emissions controls from 15 hours, under the 2010 rule, to 100 hours (78 Fed. Reg. 6,674; .

In its opening brief, the Delaware Department of Natural Resources and Environmental Control asked the court to vacate the new source performance standards change, remote area exception and 100-hour allowance for emergency demand response in the rule.

In a separate brief, FirstEnergy Solutions Corp., PSEG Power LLC, Calpine Corp. and the Conservation Law Foundation (the “environmental and industry petitioners”) said the 100-hour allowance for emergency demand response must be vacated.

NAAQS Threatened.

In its brief, Delaware argued that the new source performance standard change that allows for the 100-hour exemption, “will harm Delaware's ability to achieve and maintain the NAAQS [national ambient air quality standards] for ground-level ozone and particulate matter,” and that the EPA failed to analyze the increase in criteria pollutants that will result from the change. EPA lists six “criteria pollutants” considered harmful to public health and the environment--carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter and sulfur dioxide.

The brief goes on to challenge the rule's “remote area exception,” which establishes a subcategory for remotely located engines.

Arguing that the EPA's definition of remote is not indicative that an area may be so remote as to make emissions controls prohibitively expensive, Delaware said, “A generator could be sited in the middle of [New York's Central Park] and spew uncontrolled pollution because of its 'remote' location.”

Delaware also faulted the EPA for increasing the emergency demand response time from 15 hours without attempting to project the increased emissions from the change, saying, “For EPA to expand that amount by more than 6 times to 100 hours a year and claim they continue to believe the emissions will be minimal and will not impact attainment, is astonishing to a state who is helpless to reduce emissions from out of state that harm the health of its citizens.”

Arguing that the EPA failed to recognize that the rule created incentives for more uncontrolled engines to participate in demand response programs, the brief of environmental and industry petitioners said, “EPA has entirely ignored the most fundamental inquiry in a Clean Air Act rulemaking: air quality impacts.”

EPA Acted Outside Area of Expertise.

The environmental and industry petitioners argued that the 100-hour exemption was based on the EPA's “misguided” understanding that if backup generators were required to install emissions controls, they would not participate in emergency electricity demand programs and thus threaten the reliability of electricity.

“EPA, of course, has no expertise in the operation of electricity markets. Instead of relaxing emissions requirements to accommodate its erroneous view of what is needed for those markets to ensure reliability, EPA should have pursued its statutory mandate to control hazardous air pollutants, and left reliability issues to [the Federal Energy Regulatory Commission].”

The environmental and industry petitioners' brief says that other sources and conservation efforts are capable of supplying electricity or reducing consumption in emergencies and that the EPA did not consider market dynamics in issuing the rule.

“In its misguided effort to perform FERC's job, it neglected its own statutory mandate to reduce hazardous air pollutants and has encouraged further reliance on dirty, uncontrolled diesel [generators] at the expense of cleaner (but potentially more costly, in part because they are cleaner) sources of capacity,” they wrote.

The brief goes on to state that even if uncontrolled generators were essential to emergency demand response programs, the EPA incorrectly believed that the previous 15-hour operation cap would prevent a generator from participating in such programs.

Instead, the brief says the requirements that a source be available for 60 hours per year to participate in an emergency response program may be met by aggregating multiple units.

Four Cases Filed.

The EPA faced four separate lawsuits challenging the rule. The D.C. Circuit consolidated the appeals of the Delaware Department of Natural Resources and Environmental Control, No. 13-1093; FirstEnergy Solutions Corp., Calpine Corp. and PSEG Power LLC, No. 13-1102; and the Conservation Law Foundation, No. 13-1104 .

As set forth in the brief of environmental and industry petitioners, the court is holding in abeyance a petition filed by the National Rural Electric Cooperative and certain issues from the Conservation Law Foundation petition that were severed from the current petition (Nat'l Rural Elec. Coop. v. EPA, D.C. Cir., No. 13-1095, 4/1/13; Conservation Law Found. v. EPA, D.C. Cir., No. 13-1233, issues severed 8/2/13; .

By Sarah Kunkleman  

To contact the reporter on this story: Sarah Kunkleman in Washington at skunkleman@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com