Public Power Magazine

Concerted Effort by APPA Members Results in More Reasonable RICE Regulation


From the March-April 2013 issue (Vol. 71, No. 2) of Public Power

Originally published March-April 2013

By Mark Crisson
President & CEO, American Public Power Association
March-April 2013

Mark Crisson
PHOTO BY DENNIS BRACK

We started 2013 with a welcome relief from an environmental rule that threatened the budgets and reliable operations of hundreds of small public power utilities. In March 2010, the Environmental Protection Agency issued a final rule to apply emissions limits to reciprocating internal combustion engines. Familiarly known as the “RICE rule,” the regulation set a May 2013 deadline for owners of diesel generators to reduce emissions from the plants, either through costly retrofits or by shutting them down.

There are more than 1,500 RICE at public power utilities, most of them in the Great Plains states.  Most RICE operate infrequently and serve chiefly to reduce system peaks for utilities buying wholesale power, for voltage regulation and as emergency generation when normal power supplies are disrupted. The 2010 rule blindsided most in the industry — few people saw it coming. It alarmed the affected utilities because it disallowed critical emergency functions often performed by RICE at utilities and imposed an enormous cost of compliance.

To address these concerns, APPA formed a task force of affected utilities and joined forces with other parties to ask EPA to revamp the rule. We were pleased by the agency’s attention to our concern and its willingness to take the unusual step of re-proposing a final rule.

The earlier rule nominally allowed utilities to operate the generators during emergencies, but the definition of an emergency was generally unworkable because it was confined to situations when actual blackouts occurred and a very limited allotment for demand response.  That narrow definition would inhibit the ability of utilities to run the generators during emergencies, when they are needed most — to prevent blackouts. The new rule allows the engines to be used to prevent electrical outages and allows utilities to test the engines for maintenance purposes for up to 100 hours a year without fear of violating emissions limits. In many cases RICE are the last line of defense as voltage sags occur in transmission-constrained conditions. In these types of situations, RICE are often the only remedy available to prevent a more widespread outage.

Hearing industry concerns, the EPA proposed amendments to its final 2010 rule and posted a new amended final rule in January. The new rule allows emergency RICE to be used to prevent electrical outages. Emergency uses have been expanded to include monitoring and testing, emergency demand response for “Level 2” energy alerts and voltage regulation when voltage levels fluctuate by 5 percent or more. Emergency RICE will also be permitted to operate for up to 50 hours in non-emergency situations such as for peak-shaving until May 3, 2014.

Beginning in 2015, the engines will be required to use ultra-low-sulfur diesel fuel if they operate for more than 15 hours a year as part of blackout or brownout prevention.  Also in 2015, plants that operate for more than 15 hours a year will be required to file annual reports disclosing the plant location and dates and times of operation.  Utilities with RICE generators that run 15 or fewer hours a year are exempt from federal emission limits. Responding to public power concerns, the EPA reiterated that when storms cause widespread outages, any RICE generator can operate without fear of violating federal emissions limits.

Plants serving U.S. territories on the islands of Guam, American Samoa and the Northern Mariana Islands, and in parts of Alaska, are exempt from the low-sulfur fuel requirements.

The new rule strikes a reasonable balance between the debilitating requirements of the 2010 rule and EPA’s mandate to protect the health and safety of American citizens. APPA member utilities that own RICE still face new environmental mandates, but they now have more time to prepare for changes and a better chance of complying without imposing burdensome rate increases on their customers.

The result of the RICE experience is, overall, a positive one for the affected APPA member utilities and demonstrates the value of joining forces to bring about change.

APPA is continuing to work with its small utility members that are subject to the RICE regulation. A few weeks after EPA issued its revised rule, we sponsored a webinar to review provisions of the rule. Our environmental staff, Director of Environmental Services Theresa Pugh and Energy and Environmental Services Manager Alex Hofmann, are working with affected member utilities to help them decipher the confusing language of the regulation so each utility can develop a plan for complying with the revised rule.

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