Testimony Regarding Proposal 222 (Distributed Generation Sources)

Testimony Regarding Proposal 222 (Distributed Generation Sources) Ashley Welsch, Air and Energy Associate February 11, 2016 before The New York State Department of Environmental Conservation Proposed Rulemaking: 6 NYCRR Part 222 (Distributed Generation Sources) and conforming revisions to Part 200 and Subpart 227-2 Good morning. My name is Ashley Welsch, and I am the Clean Air & Energy Associate for Environmental Advocates of New York. Our organization appreciates the opportunity to comment on the proposed Part 222 regulations for distributed generation sources. Part 222 is necessary to reduce harmful air pollution Environmental Advocates commends the Department of Environmental Conservation (DEC) for proposing these crucial regulations to limit harmful air pollution from unregulated distributed generation sources, or generators. Part 222 will improve air quality for New Yorkers by curbing emissions of nitrogen oxides and particulate matter. Nitrogen oxides, or NOx, contribute to ground-level ozone and cause health problems like shortness of breath, asthma attacks, and permanent lung damage. Particulate matter also causes serious health problems, such as difficulty breathing, aggravated asthma, and heart attacks. Asthma is a serious health concern in New York, especially in environmental justice areas.1 The Office of the State Comptroller has found that, based on the most recent federal Centers for Disease Control and Prevention data, 1.4 million adults and 315,000 children suffer from asthma in New York State.2 And the State Department of Health has estimated that asthma costs us $1.3 billion each year.3 Part 222 will reduce the pollution that triggers asthma attacks in New York State, which will benefit public health and the economy. 1

See, e.g., New York State Dept. of Health, New York State Asthma Surveillance Summary Report 33–34 (2013), available at https://www.health.ny.gov/statistics/ny_asthma/pdf/2013_asthma_surveillance_summary_report.pdf (finding that asthma rates were highest among adults with annual household incomes less than $15,000 and children from households with an annual income less than $25,000). 2 Office of the State Comptroller, The Prevalence and Cost of Asthma in New York State 3 (2014), available at http://www.osc.state.ny.us/reports/economic/asthma_2014.pdf. 3 Id. at 12.

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Part 222 will also protect us from the potential increased use of distributed generation sources in the future. The Reforming the Energy Vision (REV) initiative aims to create markets that will favor distributed energy resources.4 While the policy objective of REV is to foster the growth of clean energy—like solar photovoltaic panels and energy efficiency measures—REV could inadvertently encourage dirty generators, as well. Many generators operate during emergency situations only, but REV could encourage them to run more frequently and thus emit more harmful air pollutants. Part 222 will prevent that perverse outcome and ensure that generators will have to control their air pollution if they elect to participate in the electric grid. Part 222 does not threaten grid reliability Some generators have argued that the proposed Part 222 will result in blackouts, but this allegation is inaccurate. These generators participate in demand response programs, where they are incentivized to run during periods of high demand and thereby reduce their consumption from the grid. These demand response generators are not needed to prevent a grid blackout; that would only be the case if demand response generators were the only sources available to fill capacity needs in emergencies. But they are not. Utilities are already required to prove that they have sufficient capacity to meet the reliability needs of the grid, from power plants or cleaner distributed generation sources. Those sources are obligated to run when the grid needs them. Demand response generators, on the other hand, are not necessary for grid reliability. If for some reason a particular demand response generator does become necessary to maintain grid reliability, that generator could take advantage of a compliance flexibility mechanism that is already proposed in Part 222. Section 222.5(b) already states that demand response generators will not have to come into compliance with emissions control requirements until May 2017. And a demand response generator could postpone compliance until May 2019 if the Public Service Commission determines that it is needed to preserve reliability in the area. This compliance mechanism is extremely generous, maybe more so than is actually necessary. An exemption for demand response generators would result in poor air emissions outcomes DEC should not create a carve-out exemption for generators that participate in demand response programs because such an exemption would frustrate the purpose of Part 222. Requiring demand response generators in the New York City metropolitan area to control their air pollution will reduce NOx emissions by 10 tons per day.5 On the other hand, if a carve-out exemption was granted, and all emergency generators in the New York City metropolitan area participated in a demand response program without meeting emissions control requirements, their NOx emissions would total more than 127 tons per day.6 That’s more than the single largest source of NOx

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See Case 14-M-0101. Proceeding on Motion of the Commission in Regard to Reforming the Energy Vision. Proposed 6 NYCRR Part 222, Distributed Generation Sources, Regulatory Impact Statement Sec. V(b). This is akin to taking over 1,090 cars off the road. See U.S. Envtl. Prot. Agency, Average Annual Emissions and Fuel Consumption for Gasoline-Fueled Passenger Cars and Light Trucks 4 (2008), available at http://www3.epa.gov/otaq/consumer/420f08024.pdf. 6 Id. 5

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emissions in the country!7 If generators do not wish to responsibly participate in demand response programs, then they can return to operating during emergency situations only and enjoy the control requirements exemption for emergency-only generators.8 Finally, the carve-out exemption requested was struck down last year in the Court of Appeals for the District of Columbia Circuit.9 The court held that the U.S. Environmental Protection Agency (EPA) acted “arbitrarily and capriciously” when it created an exemption for demand response generators to operate without emissions controls for up to 100 hours per year.10 Several commenters on the proposed exemption pointed out that it would incentivize demand response generators in a way that would make the grid less efficient and displace cleaner sources.11 This is the exemption that demand response generators are demanding now, and DEC should reject their request. Conclusion Environmental Advocates commends DEC for proposing these much-needed regulations for distributed generation sources. These regulations are crucial to protect public health, and they will be increasingly necessary to curb harmful air pollution from distributed generation sources under the REV. The regulations are designed in a way that will not disrupt the grid’s reliability, and demand response generators should not be exempt from air pollution control technology requirements. We urge DEC to strengthen and finalize these regulations as soon as possible. About Environmental Advocates of New York Environmental Advocates’ mission is to protect our air, land, water, and wildlife and the health of all New Yorkers. Based in Albany, we monitor state government, evaluate proposed laws, and champion policies and practices that will ensure the responsible stewardship of our shared environment. We work to support and strengthen the efforts of New York’s environmental community and to make our state a national leader. Environmental Advocates of New York has a network of over 47,000 advocates. Our Air & Energy Program is focused on reducing air pollution and promoting clean technologies that will set New York on the path to a safe and sustainable energy future. Our work includes promoting policies that will improve air quality and reduce climate pollution, as well as supporting New York’s efforts to increase energy efficiency and conservation, and accelerate clean energy development.

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The Four Corners Power Plant in New Mexico emits about 45,000 tons per year, or about 123 tons per day. See, e.g., http://www.businessweek.com/ap/financialnews/D9IMRMEG0.htm. 8 Proposed 6 NYCRR 222.1(b). 9 Del. Dept. of Natural Resources & Envtl. Control v. U.S. Entvl. Prot. Agency, 785 F.3d 1 (D.C. Cir. 2015) (remanding the demand response exemption portion of the NESHAP RICE rule). The court later granted a stay of the rule until May 2016. Del. Dept. of Natural Resources & Envtl. Control v. U.S. Envtl. Prot. Agency, 13-1093 (D.C. Cir. order dated Aug. 14, 2015). 10 785 F.3d at 4–5. 11 Id. at 14–16.

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