BOARD MEETING DATE: June 6, 2003
AGENDA NO. 24

Update Minor Source BACT Guidelines for Emergency Diesel Engines

SYNOPSIS:

This proposal is to update AQMD minor source BACT guidelines for emergency diesel engines to: a) be consistent with U.S. EPA Tier 2 non-road emission standards; b) reflect Rule 431.2, which requires that fuels purchased on or after June 1, 2004 for use in most diesel engines be ultra low-sulfur (<.0015 wt. %); and c) require generators that are to be used for interruptible electric service programs to meet minor source BACT for spark-ignition emergency engines.

COMMITTEE:

Stationary Source, April 25, 2003, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Executive Officer to update the minor source BACT (MSBACT) guidelines for emergency compression-ignition engines to be consistent with U.S. EPA Tier 2 emission standards for non-road engines and AQMD Rule 431.2 and to require generators that are to be used for interruptible electric service programs to meet MSBACT for spark-ignition emergency engines.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The South Coast Air Quality Management District (AQMD) Regulation XIII – New Source Review (NSR) and Regulation XX – RECLAIM require applicants to use Best Available Control Technology (BACT) for new sources, relocated sources, and for modifications to existing sources that may result in an emission increase of any nonattainment air contaminant, any ozone depleting compound (ODC), or ammonia. Additionally, Regulation XIII requires the Executive Officer to periodically publish BACT Guidelines that establish the procedures and the BACT requirements for commonly permitted equipment.

As a result of amendments to AQMD’s NSR regulations in October 2000, the BACT Guidelines were separated into two: one for major polluting facilities and another for non-major (minor) polluting facilities. A facility is a major polluting facility if it emits, or has the potential to emit, a criteria air pollutant at a level that equals or exceeds emission thresholds given in the Clean Air Act.

For non-major polluting facilities, minor source BACT (MSBACT) is determined in accordance with state law at the time an application is deemed complete. For the most part, it is as specified in Part D of the BACT Guidelines adopted by the AQMD Board in October 2000. In updating Part D with new or more stringent MSBACT, AQMD must follow a more rigorous process than for major polluting facilities, including a cost effectiveness analysis, presentation at a BACT Scientific Review Committee meeting and presentation to the Board for final approval. AQMD also follows the criteria and process specified in California Health & Safety Code Section 40440.11.

Diesel Engine Background

Emergency compression ignition (diesel) engines are widely used to drive emergency generators, fire pumps and for other emergency uses. The permits that AQMD issues for emergency diesel engines include a mandatory permit requirement that the engine not be operated in excess of 200 hours per year. Engines that drive emergency generators are further restricted to 50 hours per year for maintenance and testing, and other operation is permitted only during emergencies resulting in an interruption of service of the primary power supply or any Stage 2 or 3 electrical emergency declared by the California Independent System Operator. Due to the limited amount of operation permitted, emergency diesel engines are subject to less rigorous emission limits than other engine categories. Internal combustion engines are regulated under AQMD Rules 1110.1 and 1110.2, but emergency engines are exempt from these rules. However, an AQMD permit is required for any engine rated at or above 50 hp (AQMD Regulation II), and thus emergency diesel engines rated at or above 50 hp are subject to New Source Review (Regulation XIII) and therefore are subject to BACT.

Beginning in 1996, manufacturers and vendors of diesel engines conforming to U.S. EPA’s definition of a “non-road” engine have been subject to U.S. EPA’s non-road diesel emission regulations (40CFR Part 89). U.S. EPA’s definition of a non-road diesel engine includes essentially all diesel engines not used for highway transportation, with the exception of stationary engines, locomotive engines, engines used in underground mining and large (>37 kW) marine engines. The U.S. EPA non-road standards are tiered, and the date upon which each tier takes effect depends on the engine size. As of January 1, 2000, all engine sizes were subject to Tier 1 standards.

Current MSBACT for emergency diesel engines, adopted in October 2000 on page 67 of Part D of the BACT Guidelines, is essentially the same as U.S. EPA Tier 1 non-road emission standards.

With the passage of time, more stringent U.S. EPA Tier 2 standards have come into effect for some engine sizes. As non-road engines meeting the Tier 2 standards have become available, vendors are beginning to apply for and obtain AQMD Certified Equipment Permits for emergency diesel generators that incorporate Tier 2-compliant engines. Based on this, it is clear that Tier 2-compliant emergency diesel engines are achieved in practice and commercially available.

Emergency diesel engines are exempt from AQMD’s Clean Fuels Policy, which basically requires that BACT include the use of a clean fuel such as natural gas, propane or LPG wherever possible. However, MSBACT for emergency diesel engines does reflect AQMD Rule 431.2, which requires that owners of stationary diesel engines use fuels with sulfur contents no greater than 0.05 wt. %. Rule 431.2 also requires that, on or after June 1, 2004, owners of stationary diesel engines purchase only fuels with sulfur contents no greater than 0.0015 wt.%, commonly referred to as ultra low-sulfur diesel fuel.

Add-on emission control technologies that are now commercially available for diesel engines include diesel particulate filters (DPF), diesel oxidation catalysts (DOC) and selective catalytic reduction (SCR) systems for control of NOx emissions. Staff investigated the suitability of these technologies for emergency diesel engines and found that, while both DPF and SCR have been successfully applied to emergency diesel engines, neither of these technologies meets AQMD's MSBACT cost-effectiveness criteria.

Interruptible Electric Service Programs

Some facilities participate in interruptible electric service programs that provide the facility a significant discount in electric rates in return for a requirement to reduce the facility’s electric load or turn on a standby generator when electric power reserves are low. In 1995, AQMD’s New Source Review regulation was amended to allow diesel engines to be used for interruptible electric service programs. That decision was based on historical data indicating that facilities in interruptible electric service programs had an extremely low probability of been called upon to reduce their loads. However, recent events have shown that the power supply/demand balance in California has become more precarious and facilities on interruptible programs are now more likely to be required to reduce load. For example, in 2001 there were 38 occasions in which the Southern California Edison Company (SCE) called upon all interruptible customers to drop their interruptible loads. In February 2001, CARB issued permitting guidance recommending that districts permit use of emergency diesel generators only in the event of a power blackout. Air toxic control measures presently being prepared by CARB, although still in draft form, contain prohibitions on use of both new and in-use stationary diesel generators in interruptible electric service programs. Staff found that it is cost effective to use a cleaner natural gas engine generator instead of a diesel engine generator for a typical SCE interruptible program.

Proposal

AQMD staff recommends that:

• MSBACT for emergency diesel engines be brought into line with the U.S. EPA Tier 2 emission standards. The Tier 2 emission standards represent, depending on engine size, the following emission reductions from Tier 1 standards: 29-39% for NOx + NMHC, 56-69% for CO and 21-61% for PM10.
• The dates upon which the Tier 2 standards take effect in MSBACT for various engine sizes be no sooner than the dates upon which the U.S. EPA Tier 2 standards take effect plus six months. The six-month grace period is to allow time for Tier 2 engines to make their way into vendors’ inventories.
• An exception be included for fire pumps in the event that UL-certified fire pumps meeting the Tier 2 emission standards are not available.
• The upcoming requirement of Rule 431.2 for ultra low-sulfur diesel fuels on or after June 1, 2004 be noted in the BACT listing.
• MSBACT for emergency diesel engines be revised to require generators that are to be used for interruptible electric service programs to meet MSBACT for spark-ignition emergency engines.

Compliance with Requirements for Updating MSBACT

In developing these proposed amendments to the MSBACT Guidelines, staff has followed the process and criteria required by Part C, Policies and Procedures for Non-Major Polluting Facilities, of the BACT Guidelines. The proposed amendments also comply with additional requirements of California Health and Safety Code Section 40440.11.

Attachments (1,182 KB)

Attachment A - Key Issues and Responses
Staff Report for Proposed Amended Best Available Control Technology (BACT) Guidelines, Part D- Non-Major Polluting Facilities, Regarding Emergency Compression Ignition (Diesel) Engines, April 2003

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