The NJDEP issued an enforcement alert as part of a compliance advisory to any facility in NJ that owns or operates a stationary internal combustion engine that generates electricity and is permitted as an emergency generator. The advisory is directed at the use of emergency generators for facilities participating in Demand Response and Peak Shaving Programs and which may require air permit revisions and air pollution controls.
Demand response is a preemptive action in which facilities can voluntarily agree to commence operation of on-site electrical generating equipment prior to the reduction in voltage or a power failure in return for economic benefit. Peak shaving (or peak load shaving) is a method to reduce energy costs by lowering consumption during the peak time of the day, when electric rates are the highest
The NJDEP has discovered that some facility owners and operators of emergency generators are entering into electric supply agreements for peak shaving, demand response, and similar programs. However, this is permissible only if the approved air permit contains conditions specifying allowable nonemergency use and includes air pollution control.
There are only three permissible reasons that stationary internal combustion engines used as emergency generators may be operated without air pollution control. Operation of an engine that does not meet one of the 3 cases listed below disqualifies the equipment as meeting the definition of an emergency generator and, therefore, subjects the engine to air pollution control requirements and a regular air pollution control permit.
▪ During the performance of normal testing and maintenance procedures, as recommended in writing by the manufacturer and/or as required in writing by a federal or state law or regulation
▪ When there is power outage or the primary source of mechanical or thermal energy fails because of an emergency
▪ When there is a voltage reduction issued by PJM and posted on the PJM internet website (www.pjm.com) under the “emergency procedures” menu.
Further, an emergency generator general permit does not allow the use of a generator for demand response or peak shaving programs because, to participate in demand response or peak shaving programs a facility must obtain a regular air Preconstruction or Operating permit approval. This review would require the engine to comply with all applicable requirements including NOx RACT, State of The Art and health risk screening analysis.
The Department will be issuing enforcement actions for all violators which can include the facility owner/operator and the demand response aggregator. Enforcement actions may include penalty assessments, which include recovery of economic benefit.
If you desire to operate a combustion engine for peak load shaving or demand response programs, Emilcott can help you get the correct permitting.