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Parts 222, 200 and Subpart 227-2 Revised Rural Area Flexibility Analysis

The Department of Environmental Conservation (Department) proposes to 1) adopt 6 NYCRR Part 222, 'Distributed Generation Sources', and 2) revise Part 200, 'General Provisions' and Subpart 227-2, 'Reasonably Available Control Technology (RACT) for Oxides of Nitrogen (NOx)' to conform to the new Part 222. A distributed generation (DG) source is any stationary internal combustion engine used to produce electricity for use at the host facility. The purpose of this rulemaking is to establish emission limits, recordkeeping and testing requirements for DG sources that are not subject to Subpart 227-2.

Types and Estimated Numbers of Rural Areas Affected

Part 222 and the revisions to Part 200 will apply to facilities statewide. The primary impact of the rule will be in urban areas, especially in the New York City metropolitan area, although the rules will also apply to facilities in rural areas. The types of rural facilities that could be subject to the rules include hospitals, universities, wastewater treatment plants and farms.

Compliance Requirements

On the effective date of this rule, Part 222 will apply to DG sources that meet the following thresholds:

  1. mechanical output rating of 200 horsepower (hp) or greater for sources located in the New York City metropolitan area; and
  2. mechanical output rating of 400 hp or greater for sources located outside of the New York City metropolitan area.

Emergency generators owned by municipalities or municipal agencies may by operated in cases where the usual supply of electricity is still available if such operation would prevent a violation of the Clean Water Act or Article 17 of the Environmental Conservation Law (ECL) through April 30, 2021. The purpose of this provision is to allow such generators to run in order to prevent direct sewage discharges to waterways in the state. Beginning May 1, 2021, such sources would be required to meet the standards set forth in Section 222.4 of Part 222 or be replaced with engines meeting standards adopted by the United States Environmental Protection Agency.

Also on the effective date of this rule, the maintenance and testing of emergency power generating stationary internal combustion engines will be prohibited during the hours of 1:00 pm and 8:00 pm during the period of May 1 through September 30 of each year.

By January 2, 2017, owners or operators of DG sources that are required to operate under permits or registration certificates must notify the Department whether the sources will be operated as emergency generators or economic dispatch sources. In cases where such notification is not provided by the compliance date, the DG source will be considered an economic dispatch source for regulatory purposes.

On May 1, 2017, the following NOx emission limits will apply to economic dispatch sources subject to Part 222:

  • natural gas-fired simple cycle combustion turbines: 50 parts per million on a dry volume basis (ppmvd)
  • corrected to 15 percent oxygen (O2)
  • oil-fired simple cycle combustion turbines: 100 ppmvd corrected to 15 percent O2
  • natural gas-fired combined cycle combustion turbines: 25 ppmvd corrected to 15 percent O2
  • oil-fired combined cycle combustion turbines: 42 ppmvd corrected to 15 percent O2
  • natural gas engines: 1.5 grams per brake horsepower-hour (g/bhp-h)
  • diesel-fired engines: 2.3 g/bhp-h

Also, on May 1, 2017, diesel-fired DG sources must be in compliance with one of the following requirements regarding particulate emissions:

  1. must be equipped with a pollution control device designed to remove 85 percent or more of the PM in the exhaust stream; or
  2. must be in compliance with a particulate emission limit of 0.30 g/bhp-h.

By April 30, 2017, owners and operators of DG sources subject to an emission limit(s) must conduct an initial emissions test to demonstrate compliance with the emission limits set forth in Part 222. Additional testing must be conducted at a frequency of once every 10 years. Also, the rule requires owners and operators of DG sources to notify the Department 60 days prior to testing and submit a copy of the test report to the Department within 60 days following the test. Records of the emission tests must be maintained, and made available to the Department.

Emission testing for PM is not required for engines equipped with pollution control devices verified by the California Air Resources Board (CARB) as meeting the Level 3 or Level 3 Plus classification per the California Code of Regulations, Title 13, Sections 2700-2711.

Within one year of the effective date of the rule or within 12 months of commencing operation of a DG source subject to the rule, whichever is later, the owner and operator of the source must conduct an initial tune-up of the source. Additionally, the DG source must be tuned-up at least once every 12 months. Records of annual tune-ups must be maintained at the facility for a period of five years.

'Professional Services'

The services of an engineering consultant may be required in order to complete a permit application. A stack testing company will be required to conduct the emissions testing required in 222.6. The services of a certified technician may be required to conduct the annual tune-up required in Section 222.4.

Costs

Post-combustion control systems may be required in order to meet the emission limits set forth in Part 222. Selective catalytic reduction (SCR) systems may be required in order for diesel-fired engines and lean-burn natural gas-fired engines to meet the appropriate NOx emission limit. In addition, diesel-fired engines may need to be equipped with filtering systems in order to meet the PM standard. Non-selective catalytic reduction (NSCR) systems may be required in order for rich-burn natural gas-fired engines to meet the NOx emission limit. The costs for post-combustion control systems are presented in the following sections for 1200 hp and 2000 hp engines. As a point of comparison, replacement costs for new 1200 hp or 2000 hp engines that meet the NSPS requirements range from $525,000 to $1,000,000.1,2

Selective catalytic reduction systems can reduce the NOx emissions from lean-burn natural gas fired-engines and diesel-fired engines by up to 90 percent.3 The capital cost (installed) of SCR control systems are presented in Table 1.

Table 1: Capital Costs for SCR Systems
Cost Component 1200 hp Engine 2000 hp Engine
SCR System4 $103,000 $171,700
Installation $61,800 $103,000
Taxes $8,300 $13,800
Testing5 $15,000 $15,000
Total Cost $188,100 $303,500

Operational costs vary depending upon several factors. The primary driver is the reagent (urea) cost. The other operational factors the Department considered in developing cost estimates for SCR systems were insurance, maintenance and labor costs.

The Department evaluated the costs for operating SCR systems under a wide range of scenarios over a 10-year period. Control costs of $5,000 per ton of NOx reduced are considered reasonable under Subpart 227-2. For pre-NSPS engines, the cost per ton of NOx reduced would be less than $5,000 for sources operating 1,500 hours per year or more. For post-NSPS engines, the $5,000 per ton threshold would be met when operating 3,000 hours per year or more. Therefore, in the opinion of the Department, the costs to operate SCR systems are reasonable.

Non-Selective Catalytic Reduction (NSCR) Systems

Non-selective catalytic reduction (NSCR) systems can reduce the NOx emissions from rich-burn natural gas fired-engines engines by up to 98 percent.6 The capital cost (installed) of NSCR control systems are presented in Table 2.

Table 2: Capital Costs for NSCR Systems
Cost Component 1200 hp Engine 2000 hp Engine
SCR System $26,700 $44,400
Installation $16,000 $26,700
Taxes $2,100 $3,500
Testing7 $8,000 $8,000
Total Cost $52,800 $82,600

NSCR catalysts need to be replaced every five years.8 Replacement catalysts are estimated to cost 7 percent of the original NSCR system cost. In the cost analyses conducted by the Department, the cost of installing the replacement catalyst was assumed to be 60 percent of the cost of the new catalyst. Annual costs for operating NSCR include insurance, maintenance and labor. The cost per ton of NOx reduced is less than $5,000 when operating more than 200 hours per year.

'Particulate Matter (PM) Emissions'

Particulate control equipment (e.g. - particulate traps or oxidation catalysts) may be required in order for some sources to comply with the particulate emission standard. The costs for particulate control equipment are approximately $55 per KW installed ($49,200 - $82,000 for the engine sizes discussed in this section).9

'Compliance Testing'

The emission testing costs are estimated to be $8,000 (NOx only) to $15,000 (NOx and PM) per source10. Emission testing for PM is not required for engines equipped with pollution control devices verified by the California Air Resources Board as meeting the Level 3 or Level 3 Plus Classification per the California Code of Regulations, Title 13, Sections 2700 through 2711.

Minimizing Adverse Impact

The Department considered the practical impacts of the proposed rule on rural facilities, such as small farms. As of April 2010, there were an estimated 151 farms in 31 states11 (including New York) generating electricity via biogas-fired DG sources.

Livestock farms use animal waste digesters as a means of odor control. One of the by-products of these systems is biogas (fuel gas containing methane and other compounds) that can be used to fire DG sources. Biogas contains impurities which erode engine gaskets and other components which reduces the useful life of an engine. Biogas-fired engines need to be replaced more often than engines fired with fossil fuels. These impurities can also damage post-combustion control systems which in turn can lead to damage to the DG source. Existing biogas-fired DG sources will not be subject to Part 222. New biogas-fired sources are subject to 40 CFR 60 Subpart JJJJ.

Rural Area Participation

The proposed rulemaking is the result of a stakeholder process initiated by the Department in 2001. Stakeholder Meetings were held on November 13, 2001, December 12, 2002, April 8, 2003, May 17, 2004, June 29, 2006 and June 25, 2013. In addition, drafts of Part 222 were circulated electronically to stakeholders in May 2004, January 2005, June 2006 and May 2013. More than 175 stakeholders have been involved in the process of developing Part 222 and anyone who requested to be added to the list of stakeholders was added. The meeting of April 8, 2003 was advertised in the Department's Environmental Notice Bulletin.

The participants in the stakeholder process represented a wide range of interests. These groups include law firms, consultants and trade organizations, manufacturers, and government agencies. In addition, Department staff met with individual or small groups of stakeholders (such as the New York Farm Bureau) on several occasions.

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1 E-mail from Joe Suchecki (Truck & Engine Manufacturers Association) to John Barnes (DEC) dated November 8, 2013.
2 Replacement costs as well as the costs for pollution control systems could be higher than the costs presented in this section in cases where there are space limitations or building or fire code requirements that must be met.
3 "NOx Control for Stationary Gas Engines", Wilson Chu (Johnson-Matthey), Advances in Air Pollution Control Technology, MARAMA Workshop, May 19, 2011.
4 Sources: CARB 2010. Regulatory Analysis for Revisions to Stationary Diesel Engine Air Toxic Control Measure. Appendix B. Analysis of Technical Feasibility and Costs of After-treatment Controls on Emergency Diesel Engines; and (2) Producer Price Index, U.S. Department of Labor, Bureau of Labor Statistics.
5 Testing costs include NOx and PM tests (diesel engines). For natural gas-fired engines, the estimated cost is $8,000 for NOx tests only.
6 "NOx Control for Stationary Gas Engines", Wilson Chu (Johnson-Matthey), Advances in Air Pollution Control Technology, MARAMA Workshop, May 19, 2011.
7 Emissions tests for NOx only since the PM standard does not apply to natural gas engines.
8 E-mail from Wilson Chu (Johnson Matthey) to John Barnes (DEC) dated January 24, 2008.
9 Sources: CARB 2010. Regulatory Analysis for Revisions to Stationary Diesel Engine Air Toxic Control Measure. Appendix B. Analysis of Technical Feasibility and Costs of After-treatment Controls on New Emergency Diesel Engines; and (2) Producer Price Index, U.S. Department of Labor, Bureau of Labor Statistics.
10 Stack testing costs are based upon an informal Department survey of several stack testing companies.
11 http://bradpennsgeo.com/wp-content/uploads/2012/07/BRADPENN_ANAEROBIC_DIGESTION_-PAPER_SEPT_10.pdf


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