Emergency Engine Emissions Standards Kathi Harris, HOLT CAT Emissions Business Manager - June 13, 2012

The information presented is an interpretation of federal, state or local regulations and should not be used as legal guidance. HOLT Power Systems assumes no liability for errors or omissions.

Today’s Agenda Is this an Actual Emergency? Emissions Standards Now What?

Emergency? TEXAS FEDERAL Unforeseen power or gas service failure, flood, fire, or life-threatening situation YES Emergency runtime limits (876 hrs per TX Permit) NO 100 hours per year Maint. & Testing allowed Severe Storm Avoidance at Airports or NASA Other Storm Avoidance up to 30 minutes advance NEW! Demand Response – up to 100 hrs/yr incl. M&T NEW! Peak Shaving - up to 50 hrs/yr incl. M&T NO?

EPA Emergency Engine Regs – Current vs. Proposed Type Current Proposed Demand Response 15 hours per year 100 hours per year NESHAP only NSPS and NESHAP will allow Peak Shaving Not allowed Up to 50 hours per year

Proposed Demand Response Changes Up to 100 hours per year for non-emergency activities Hours include Demand Response, Maint. & Testing, Peak Shaving Hours Can Get Paid – Peak Shaving up to 50 hrs/year TCEQ requires PBR 106.512 or Case-By-Case Permit Fed Regs Aligned (NESHAP & NSPS)

Proposed Changes - Details, Details Demand Response When: Regional Transmission Authority or equivalent balancing authority declares Energy Emergency Alert Level 2 (EEA Level 2) Voltage sag of 5% or more below standard voltage or frequency. Peak Shaving When: Done as part of program with local distribution system operators. Power can only be used at facility or towards the local system. Expires April 16, 2017

Texas Requirements Permits By Rule (PBR) 106.511 (Portable & Emergency Engines & Turbines) 106.263 (Maintenance, Startup & Shutdown) 106.512 (Stationary Engines & Turbines; Peak Shaving) Case-by-case (Peak Shaving) PBR 106.511 = 876 hours emergency use Paperwork 106.511 – review, keep copies, records of compliance, no fee or registration. 106.263 – same as above if MSS project less than 180 days. http://www.tceq.texas.gov/permitting/air/nav/numerical_index.html

DFW Minor Source NOx Rule All federal and state regulations plus: No Maintenance & Testing 6 am – noon, with few exceptions Old Diesels Relocated into DFW must meet at least emergency engine emissions standards Natural Gas-fired = 0.5 g/bhp-hr NOx, 0.6 for landfill gas

Introduced much later than non-road regulations In 2006 EPA began to regulate engines in stationary applications Known as New Source Performance Standards (NSPS) No “flexibility program” for OEM’s in NSPS From April 2006 Tier 1 standards were mandated No factory certification required From Jan 2007 NSPS harmonized regulatory limits & timing with EPA’s non-road regulations 2007-2010 engines ≤3000 bhp & <10 litre / cylinder must be certified to the non-road Tier limits for their specific model year & power output engines >3000 bhp but <10 litre / cylinder must be certified to non-road Tier 1 limits for their specific maximum engine power engines ≥10 litre / cylinder & <30 litre / cylinder must be certified to Marine Tier 2 limits for their specific displacement & maximum engine power 2010+ Alignment with non-road regulations continues for non-emergency engines

Federal Requirements Diesel Natural Gas EPA Standards for Certified Emergency Diesel Gensets For most engines >130 hp NOx: 2.0g/hp-hr (3.0g/hp-hr existing) CO: 4.0g/hp-hr VOC: 1.0g/hp-hr Install, Configure per Mfg Hour meter Initial Emissions Performance Test Use ULSD Record-keeping

New Regulations - NESHAP 40 CFR 63, Subpart ZZZZ Compliance Dates: CI: 5/3/2013 SI: 10/19/2013 Requirements: Maintenance specified Minimize idle and startup – 30 minutes Record-keeping - 5 yrs.

New Regulations Maintenance Change oil, filter every 500 hrs. or annually. Option to use oil analysis program to extend. Inspect air cleaner every 1,000 hrs. or annually. Inspect hoses, belts every 500 hrs. or annually, replace as needed. Records: malfunctions & reducing emissions during, performance tests, maintenance, monitoring results, hours ops., emergency notifications, demand response, peak shaving, non-emergency uses.

Close, but no cigar! EPA taking public comments until July 23, 2012 http://www.epa.gov/ttn/atw/rice/ricepg.html Webinars – 6/20, 6/25, 6/28

Contacts Your HOLT CAT Salesperson HOLT CAT IRVING 972-721-2000 TCEQ Air Permits Division 512-239-1250