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Proposed Subpart 227-3 Regulatory Impact Statement Summary

The New York State Department of Environmental Conservation (DEC) is proposing 6 NYCRR Subpart 227-3, "Ozone Season Oxides of Nitrogen (NOx) Emission Limits for Simple Cycle and Regenerative Combustion Turbines." The primary goal of this proposal is to lower allowable NOx emissions from simple cycle and regenerative combustion turbines during the ozone season. The lower emissions from these sources will help to address Clean Air Act (CAA) requirements, ozone nonattainment and protect the health of New York State residents. This proposal is only applicable to simple cycle and regenerative combustion turbines. This is not a mandate on local governments. It applies to any entity that owns or operates a subject source.

Statutory Authority

The statutory authority for the promulgation of Subpart 227-3 is found in the New York State Environmental Conservation Law (ECL), Sections 1-0101, 3-0301, 19-0103, 19-0105, 19-0301, 19-0303, 19-0305, 19-0311, 71-2103 and 71-2105.

Legislative Objectives

Article 19 of the ECL was enacted to safeguard the air resources of New York from pollution and ensure the protection of the public health and welfare, the natural resources of the State, physical property, and integrating industrial development with sound environmental practices.

Needs and Benefits

In March of 2008, the United States Environmental Protection Agency (EPA) lowered the eight-hour ozone National Ambient Air Quality Standard (NAAQS) from 0.08 parts per million (ppm) to 0.075 ppm.1 Subsequently, on October 1, 2015, the EPA signed a rule that lowered this standard to 0.070 ppm.2 Ozone NAAQS attainment status is demonstrated by measurements recorded from a monitoring network set up across the United States.

EPA designated the New York-Northern New Jersey-Long Island-Connecticut metropolitan area (New York metropolitan area, or NYMA) as a "marginal" nonattainment area for the 2008 ozone NAAQS effective July 20, 2012. On November 14, 2018 EPA proposed to reclassify the NYMA to "serious" nonattainment.3 The area was designated as "moderate" nonattainment for the 2015 ozone NAAQS.4 NYMA monitors are currently reporting ozone concentrations of 0.082 ppm, well above the standard.

Simple cycle and regenerative combustion turbines (SCCTs) sometimes referred to as peaking units, run to meet electric load during periods of peak electricity demand. They typically run on hot summer days when there is a strong likelihood of high ozone readings. Many peaking units in New York have high NOx emission rates, are inefficient and are approaching 50 years of age. It is difficult to install after-market controls on most of these units because of their age and site limitations.

New York must fulfill its CAA "good neighbor" obligations which require states to include adequate measures in its state implementation plans (SIPs) prohibiting emissions of air pollutants "in amounts which will…contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to" a NAAQS. In addition, New York must meet the 2008 and 2015 ozone NAAQS, for which the New York-Northern New Jersey-Long Island, NY-NJ-CT area is in nonattainment

Because high ozone days significantly impact human health in the NYMA and because older units significantly contribute on these days, DEC assessed the 99 high ozone days between 2011 and 2017. Analysis shown in Table 1.

NOx
(tons)
Heat Input
(MMBtu)
Gross Load
(MWh)
Pre-1986 SCCT* 1,849 7,193,633 580,109
Post-1986 SCCT* 73 6,908,887 1,040,831

*Values are the sum of high ozone days 2011 - 2017
Table 1: NOx emissions from NY SCCTs.5

As demonstrated in Table 1, on high ozone days newer SCCTs produced 64 percent of the electricity generated from SCCTs while emitting only 4 percent of NOx emissions from these sources6.

If the older sources were replaced with newer sources, the total NOx emissions from those older sources on the 99 high ozone days assessed would drop from the reported 1,849 tons to between 40 and 60 tons depending on efficiency. This would result in an approximate 1,800-ton reduction of NOx emissions over those high ozone days. A reduction of 18 tons of NOx emissions on an ozone season day would represent a reduction of over 10 percent of NYMA NOx emissions from the electricity generation sector and an overall reduction of 3.5 percent from all sources.7

Electric grid reliability:

To adequately assess future reliability needs associated with this rule making the Department is proposing that affected facilities submit compliance plans by March 2, 2020 so that the New York Independent System Operator (NYISO) may include the compliance solutions selected by facilities in its 2020 Reliability Needs Assessment (RNA).

Proposal:

To address NOx emissions on high ozone days from SCCTs, DEC is proposing to develop a new regulation, Subpart 227-3, that will apply to SCCTs with a nameplate capacity of 15 megawatts or greater that inject power into the transmission or distribution systems. This regulation will phase in lower emission limits for NOx and will limit the current averaging provision found in Subpart 227-2 during the ozone season. The sources subject to this proposal will continue to be subject to the requirements of Subpart 227-3 year-round. This rulemaking proposes additional requirements for SCCTs during the ozone season while allowing more flexibility outside of the ozone season. Black start resources, defined in paragraph 227-3.2(b)(1) of Subpart 227-3 as electric generating units used to bring a facility from shutdown to operational without reliance on external supplies or the electrical system, will not be subject to Subpart 227-2. The requirements of the proposed rule are presented in the following paragraphs.

Control Requirements:

The NOx emission limits for SCCTs will be phased in as shown in Tables 2 and 3 below. These limits may be met by averaging SCCTs, electric storage resources and/or renewable generation resources on a facility-wide basis.

By May 1, 2023
NOx Emission Limit
(ppmvd8)
All SCCTs 100

Table 2: NOx emission limits for SCCTs beginning 5/1/2023

By May 1, 2025
Fuel Type NOx Emission Limit
(ppmvd)
Gaseous fuels 25
Distillate oil or other liquid fuel 42

Table 3: NOx emission limits for SCCTs beginning 5/1/2025

Also beginning May 1, 2023, SCCTs will only be able to average emissions with other SCCTs at the facility or, if the facility opts to utilize the electric storage and renewable energy resources compliance option, then those SCCTs may average with approved electricity storage or renewable energy resources during the ozone season.

Compliance Options:

Owners and operators may elect to meet the limits as proposed. To offer flexibility, this rule is proposing two additional compliance options:

1) Owners and operators may elect an ozone season stop where it is recorded in the operating permit that the source may not operate during the ozone season.

2) Owners and operators may elect to adhere to an output-based NOx daily emission rate that includes electric storage and renewable energy under common control with the SCCTs with which they are averaging.

Costs

Older SCCTs are typically not conducive to the addition of retrofit control technology. DEC expects that most impacted facilities will choose to replace or shutdown the non-compliant older SCCTs. To estimate replacement costs DEC looked to information provided by the NYISO and Department of Energy's Energy Information Administration (EIA).

Table 4 presents costs developed by EIA and NYISO for full replacement of an SCCT.

Source Overnight Cost
($/kW)
Notes
EIA $1,054 - $1,5589 Range is specific for the Long Island and New York City
area and includes conventional and advanced combustion turbines.
NYISO $1,314 - $1,35710 Range is specific for the Long Island and New York City area
and represents replacement with a dual fuel peaking turbine.

Table 4: Estimated range of overnight costs for full replacement of an SCCT

Most SCCTs have a capacity factor of less than 5 percent, meaning that they generate less than 5 percent of the electricity output that it is capable of generating. In addition, with the implementation of several New York State initiatives,11 demand for these units should continue to decline so the entire SCCT fleet would likely not need to be replaced.

Owners and operators may opt to install after-market emission control devices such as water injection technology. While costs vary widely depending on location, operation and siting, it has been reported to DEC, anecdotally, that the cost of adding after-market water injection to these older sources is approximately $2,000,000. Other sources report costs of $10,000 - $15,000 per megawatt,12 however, this data does not include installation and other associated costs.

Cost of Nonattainment:

This proposal is part of a suite of New York State efforts to bring the NYMA into attainment of the ozone NAAQS, in order to protect human health. EPA projected a wide array of benefits that would be realized on a national level, excluding California, if ozone attainment is achieved.13 The human cost of nonattainment to New York State residents is presented in Table 5.

Attainment Provides Prevention of:
Deaths from effects of ozone 13 - 22
Deaths from effects of PM2.5 31 - 70
Nonfatal heart attacks 4 - 36
Hospital admissions & emergency room visits 134
Acute bronchitis events 48
Upper & lower respiratory symptom events 1,540
Exacerbated asthma events 32,200
Missed work & school days 26,320
Restricted activity days 86,800

Table 5: Summary of Total Number of Annual Ozone and PM-Related Premature Mortalities and Premature Morbidity: 2025 National Benefits (adapted from EPA, 2015 RIA, p. ES-16)

Local Government Mandates

The proposed regulation does not contain a mandate on local governments.

Paperwork

This proposal will require each affected facility to submit a compliance plan to DEC. The compliance plan will state how each facility plans to comply with the new requirements.

Those facilities required to meet new emission limits will be required to submit permit applications to modify their Title V or State Facility permits to incorporate the newly applicable requirements by the May 1, 2023 compliance date.

Subject facilities that do not use a continuous emissions monitoring system (CEMS) will be required to perform an emissions test to assure compliance with the applicable NOx emission limits. Every subject facility will be required to submit test protocols and test reports to the Department for approval.

Duplication

The proposed Subpart 227-3 does not duplicate or conflict with any other state or federal requirements.

Alternatives

DEC considered two alternatives in assessing this proposal, leave the emission rates as they are and just lowering emission rate requirements. The first option would leave New York open to CAA Section 126 petitions and if acted upon by EPA could require controls within three years. The second option does not allow for the compliance flexibility and reliability considerations included in the proposal that were developed during the stakeholder process.

Federal Standards

The proposed rule does not exceed any minimum federal standards.

Compliance Schedule

March 2, 2020: All impacted sources must submit a compliance plan that must contain minimum data to demonstrate compliance will be achieved.

May 1, 2023: First phase of NOx emission limit set at 100 ppmvd14 for all SCCTs.

May 1, 2025: Second phase of NOx emission limits set at 25 ppmvd for gaseous fuels and 42 ppmvd for liquid fuels.

__________

1 73 FR 16436 (March 27, 2008), codified at 40 CFR section 50.15. Attainment of the 2008 ozone NAAQS is determined when the fourth highest daily maximum 8-hour average ambient air quality ozone concentration, averaged over three year, is less than or equal to 0.075 ppm.
2 80 FR 65292 (October 26, 2015).
3 83 FR 56781 (November 14, 2018).
4 83 FR 25776 (June 4, 2018).
5 EPA Air Markets Program Data. https://ampd.epa.gov/ampd/.
6 Percentages calculated from EPA Air Markets Program Data for days which exceeded the ozone NAAQS. https://ampd.epa.gov/ampd/.
7 "New York State implementation plan for the 2008 ozone national ambient air quality standards." http://www.dec.ny.gov/chemical/110727.html.
8 Parts per million on a dry volume basis at fifteen percent oxygen.
9 EIA, Capital Cost Estimates for Utility Scale Electricity Generating Plants, November 2016.
10 NYISO, Demand Curve Model - 2019-2020.xlsm. Retrieved (1/3/2019) from: https://www.nyiso.com/search?time=last-year&sortField=_score&resultsLayout=list&q=Demand%20Curve%20Model%202016
11 Including energy efficiency and energy storage targets, Reforming the Energy Vision and the Clean Energy Standard.
12 The data provided only includes capital cost. "Gas Turbine Combustion." Lefebvre & Ballal. CRC Press, April 26, 2010.
13 Regulatory Impact Analysis (RIA) for the 2015 ozone NAAQS.
14 Parts per million on a dry volume basis at fifteen percent oxygen.


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