The New York State Department of Environmental Conservation is proposing new regulations to impose air emission limits and operating requirements on distributed generation (“DG”) sources. The proposed rules will respond to the New York Public Service Commission’s recognition of the need for such rules as the State implements its “Reforming the Energy Vision” (REV) initiative.

The regulations would apply to sources that have the potential to emit oxides of nitrogen at less than major source thresholds, but above certain power ratings.  In New York City, sources of 200 horsepower (150 kilowatts) or greater, or sources outside the city of 400 hp  (300 kW) or greater, would be regulated.  A DG source is a “stationary reciprocating or rotary internal combustion engine that feeds into the distribution grid or produces electricity for use at the host facility or both.”

A subset of distributed generation sources would be subject to registration and emission limitation requirements if they are used as “economic dispatch sources,” meaning sources used to reduce energy costs or to ensure a reliable electricity supply for a facility.  Economic dispatch sources would need to comply with NOx emission concentrations specific to the source’s engine and fuel type; these standards are equal to NYSDEC’s existing NOx RACT standards for major sources.  Particulate matter emission limits apply to economic dispatch sources firing diesel fuel. 

Economic dispatch sources will generally have until May 1, 2016 to come into compliance with the new regulations.  Economic dispatch sources participating in demand response programs have until May 1, 2017 to meet NOx emissions limits, subject to certain conditions. NYSDEC may also extend the compliance dates for sources in demand response programs that the New York State Department of Public Service determines are needed to preserve grid reliability.

The proposed regulation provides alternative compliance options, including potential source-specific emission limits where compliance with the default emission limits is economically or technically infeasible.  Alternative compliance options also include commitments to shut down existing units by May 1, 2017, conversion from diesel to natural gas, or lowering the effective emission rate by factoring in electricity generated from renewable sources used by the facility owner or operator.

DG sources that are solely “emergency power generating stationary internal combustion engines,” and are not economic dispatch sources, would only be subject to maintenance timeframe limitations, tune-up requirements, inspection, recordkeeping, and data recording.

NYSDEC plans to post an official version of the proposed rules, and commence public comment, on December 23, 2015.  The comment period is planned to last through February 18, 2016. Interested parties should consider commenting on the rules, or attending one of the public hearing sessions that NYSDEC has planned in various locations during February 2016.