The Supreme Court today affirmed FERC’s Order No. 745, which required that demand response resources be treated the same as generation resources when participating in wholesale electricity markets. I’m feeling vindicated, because the post-oral argument prognosticators said that it looked bad for FERC, but I always thought that FERC had the stronger argument.
As I noted after the D.C. Circuit struck down Order No.… More
The D.C. Circuit Court of Appeals just reversed and remanded EPA’s rule allowing backup generators to operate for up to 100 hours per year as necessary for demand response. 
It’s an important decision that could have lessons for EPA and the regulated community across a wide range of circumstances, including eventual challenges to EPA’s proposed GHG rule.
EPA said that the rule was necessary to allow demand response programs to succeed while maintaining grid reliability. … More
Last Friday, FERC sought a further stay of the decision by the D.C. Circuit Court of Appeals striking down FERC Order 745. Whereas the United States had previously only indicated that it was considering filing a cert. petition, the latest filing clarifies that the United States has definitively decided to seek Supreme Court review. On Monday, Chief Justice Roberts granted the extension. The United States now has until January 15,… More
The D.C. Circuit Court of Appeals has stayed its mandate vacating FERC Order no. 745, regarding demand response. The mandate is stayed at least until December 16, 2014, by which point FERC must petition the Supreme Court for review. If FERC does seek cert., the stay will continue until the Supreme Court denies the petition or rules against FERC on the merits.
I don’t know if FERC will seek cert. … More
Last Friday, EPA published notice that it would not be revising its regulations on backup generators in response to three petitions for reconsideration it had received after it promulgated its final rule in January 2013. The rule had sparked controversy, because EPA allowed backup generators to operate for up to 100 hours a year, though EPA did require use of ultra-low sulfur diesel fuel beginning in January 2015.… More
Last Friday, the D.C. Circuit Court of Appeals struck down FERC Order 745, which required that demand response resources be compensated in the same way as traditional generation resources, at the “locational marginal price”, or LMP. Why is this an environmental case? Because use of demand response at times of peak electricity demand substitutes for traditional generation and thus eliminates the emissions that would result from such generation.… More
Yesterday, EPA finalized revisions to the National Emissions Standards for Hazardous Air Pollutants for stationary reciprocating internal combustion engines, or – one of my new favorite acronyms – RICE. The biggest dispute over the rule was the extent to which it would allow backup diesel generators to run for demand response purposes.
As we had noted previously, EPA proposed last May to allow backup generators to run for up to 100 hours for demand response purposes without being subject to emissions limits. … More
For those of you following EPA’s proposal to allow increased use of backup generators used in demand response programs, NESCAUM has now joined the fray. In a report released yesterday and available on its website, NESCAUM stated that:
Preliminary screening analyses indicate that uncontrolled diesel backup generators operating under the exemption included in EPA’s recent proposal could by themselves create hotspots exceeding the national health-based 1-hour NO2 air standard.… More
As I noted in May, EPA’s recent proposed rule regarding backup generators would allow additional operations by such generators when used to assist in demand response. It’s a tricky issue, because diesel generators are not clean, and the aggregated emissions from a number of small, but uncontrolled diesel generators can be significant.
For now, based on the proposal, EPA has come down on the side of encouraging the demand response industry. Nonetheless,… More
Yesterday, EPA released proposed revisions to its rules governing emissions from emergency back-up generators. It’s not always the most exciting of topics, but it is important. Many facilities have back-up generators and I know from experience advising clients that, precisely because back-up generators do not run that often, operators can run into compliance issues.
The most important aspect of the proposed rule is that EPA would allow back-up generators to run for up to 100 hours without being subject to emissions limits for the following reasons:
Moreover,… More