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Adopted Part 227-3 Assessment of Public Comments Summary

Comments received from August 21, 2019 through 5:00 P.M., October 7, 2019

A total of thirteen comment letters were submitted by the public in response to the Department's revised proposed rule for regulating simple cycle and regenerative combustion turbines, often referred to as "peakers" (Subpart 227-3). This document summarizes those comments into eight sections and provides the Department's response.

General Comments

The Department received general comments in support of the regulation as well as urging the Department to keep the schedule as outlined in the regulation. The Department thanked those commenters and agrees that the schedule should not be delayed.

Black Start Resources

Four commenters asked for the Department to clarify that a "black start resource" may only operate when testing or bringing a facility from shutdown to operational without the reliance on external supplies or the electrical system. The Department believes that the definition, as written, conveys this intention. More specifically, one commenter asked if it was allowable for a black start resource to operate for testing and maintenance purposes and the Department replied that it was.

Energy Storage & Renewable Energy

There were several comments that focused on the energy storage and renewable energy provision of the regulation. Specifically, one commenter stated energy storage as a replacement for a particular simple cycle combustion turbine (SCCT) may be inadequate to meet reliability requirements in some locations. The Department has worked with the New York Independent System Operator (NYISO), the Department of Public Service (DPS) and the New York State Energy Research and Development Authority (NYSERDA) to develop a regulation that considers emissions reductions as well as reliability. As a result, the Department expects a variety of compliance solutions which may or may not include storage as a partial replacement.

Another commenter expressed concern with the NYISO Buyer-Side Mitigation (BSM) process impacts on allowing storage resources in to the market and requested that the regulation allow the Department to overrule a reliability determination. The Department believes that the current language is adequate and will not overrule a reliability determination made by the NYISO or transmission/distribution utilities. The BSM process tests are in place to "... provide the means for the ISO to mitigate the market effects of conduct that would substantially distort competitive outcomes in the ISO Administered Markets, while avoiding unnecessary interference with competitive price signals.1" Based on consultation with the NYISO it is the Department's understanding that those SCCTs that are planned for retirement will not be included in the BSM test for storage projects.

Three commenters did not believe that energy storage or renewable energy resources should be required to be directly connected to the same substation or within a half-mile radius of the SCCT with which it is being averaged. The Department worked extensively with stakeholders to develop the language in the proposal and believes it to be the best balance of the issues discussed as to where to allow renewable and storage resources to be sited under this compliance option. Please see previous Assessment of Public Comment dated August 21, 2019 for more detail.

Emissions Averaging

A commenter stated that data from facilities that average emissions over a 24-hour period should be made publicly available so that interested members of the public may evaluate how facilities are utilizing the renewable energy and energy storage averaging compliance option. The Department does not plan on posting average emissions on the Department's website, however the Freedom of Information Law (FOIL) request process is available to all individuals seeking information from the Department.

There were questions regarding the calculation of average emission rates under different scenarios. The Department responded with direction to the formulas for calculating average emission rates which are set forth in paragraph 227-3.5(b) and averaging options defined in 227-3.5(a).

A commenter also asked if the emission limits in 227-3.4(a) are based on a one-hour average or a daily average when using CEMS? The Department responded that emission limits set in subdivision 227-3.4(a) are based on a one-hour average consistent with previous reporting requirements under subdivision 227-2.4(e).

Emissions during Startup and Shut down of SCCTs

One commenter stated that the rule should be revised to clarify that compliance with the emission limits will be at steady state operations and not include startup and shutdown.

The Department responded that compliance with Subpart 227-3 is consistent with the compliance requirements in Subpart 227-2 which SCCTs are already complying with. The testing methodology for stack tests requires the measurement of emissions at normal operating conditions (steady state).

Compliance Plans

A commenter asked for a defined process for how compliance plans are structured and processed. The Department responded that the requirements for compliance plans are presented in Section 227-3.3. The Department will make the compliance plans available to the NYISO to inform the 2020 Reliability Needs Assessment (RNA) once they have been received and processed. It is the Department's understanding that the NYISO, transmission/distribution owners and others will use the information in the compliance plans to inform their work on the RNA.

One commenter recommended that the Department post all of the filed compliance plans on the Department's website immediately upon receipt. The Department does not plan on posting filed compliance plans on the Department's website, however, pursuant to the FOIL anyone interested in this information may file a FOIL request with the Department.

To comply with the regulation, affected source owners must submit a compliance plan by March 2, 2020. The Department expects the NYISO to use these plans as inputs to their 2020 RNA. To ensure the RNA is based on accurate information, the Department requires that compliance plans not be amended after submittal. Some stakeholders asked if they compliance plans may be changed or updated based on designations or other activity. The March 2, 2020 date for submitting compliance plans corresponds with NYISO's 2020 RNA schedule. The Department will accept compliance plans through March 2, 2020 and expects that the NYISO will use these compliance plans in the development of the 2020 RNA.

Reliability

The regulation offers a reliability extension to ensure that the reliability of New York's electric grid is not adversely impacted by the rule. Some commenters asked that the Department revise the regulation to give the Department the authority to override the NYISO and transmission/distribution operator determination of reliability. The Department conducted a thorough stakeholder process and as a result of that process the Department will rely on the expertise of those responsible for reliability planning to determine if a source is a reliability resource. The regulation does not provide language allowing the Department to overrule a reliability determination made by the NYISO or transmission/distribution utilities.

One commenter stressed the importance of the Department recognizing the NYISO's finding that replacement generation resources are necessary and needed within the New York City Load pockets beginning in 2023. The Department understands that reliability is of concern and as a result provided several compliance options in this rulemaking to ensure that replacement of these high emitting sources may be removed and replaced with cleaner or non-emitting sources without adversely impacting grid reliability.

A commenter stated that with the advent of the Climate Leadership and Community Protection Act (CLCPA), the reliability provision alone will be insufficient without other mechanisms within the Department's control and working with the NYISO to support a market-based response to the reliability needs. The Department disagrees and believe that sufficient mechanisms are in place to maintain reliability while reducing NOx emissions. The Department worked extensively with the NYISO, DPS and NYSERDA to ensure that both emissions reductions are achieved and that system reliability is maintained.

Emission Limits

A commenter asked if the calculation for a source which would be able to meet the lb/MWh limitations using the equations provided and counting zero for MWhST and MWhRE, are the lb/MWh compliance options available for SCCTs at facilities which do not utilize electric storage or renewable energy resources? No, Subdivision 227-3.5(b) offers the lb/MWh calculation available to those sources which average with electric storage and/or renewable energy resources.

Beyond the Scope

One comment was received beyond the scope of the regulation where a commenter stated that because of CLCPA and other impacts on energy generation it will be necessary for the NYISO market to appropriately reflect the window in which a new peaking unit must recover its investment.

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1 NYISO. July 26, 2019 presentation: https://www.nyiso.com/documents/20142/7768815/BSM%20Information%20Session%20Slidedeck%20(final)%2020190726.pdf/a7c1271a-ce71-2d39-c0cd-ce3c361b6d8b

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