NYSDEC Proposes DAR-21: Economic and Technical Analysis for Variances pursuant to Subdivision 222.5(a) of Part 222

The New York State Department of Environmental Conservation (NYSDEC) has proposed guidance for owners/operators requesting a variance from a source-specific nitrogen oxides (NOx) emissions limit under NYSDEC's recently adopted Part 222 related to Distributed Generation Sources.  On November 1, 2016, NYSDEC adopted Part 222, which sets emission limitations of NOx and particulate matter (PM) for distributed generation (DG) sources, which the NYSDEC rule refers to as economic dispatch sources.  (See Trinity's summary of the rule.)  This rule applies to non-major sources of NOx operating emergency and non-emergency engines above a certain horsepower rating that produce power for on-site or off-site use throughout the state of New York.

Part 222 includes emissions limits for subject non-emergency engines and it provides an Alternative Compliance Option to request a source-specific NOx limit that is higher than the applicable standard in Section 222.4 of the rule.  Owners or operators of non-emergency engines electing this option are required to illustrate to NYSDEC that "it is economically or technically infeasible to meet the applicable emission limit" to be granted a source-specific limit.

In January 2017, the Division of Air Resources (DAR) proposed DAR-21 (Economic and Technical Analysis for Variances pursuant to Subdivision 222.5(a) of Part 222) to provide guidance on how to determine the economic and technical feasibility of retrofit control to meet Part 222 emission standards.  The proposed guidance clarifies that a State Facility or Title V Operating Permit is required to be eligible for the source-specific limitation, and also specifies required permit application content.

The proposed methodology for conducting economic feasibility assessments for Part 222 varies from more traditional means of demonstrating the economic feasibility of control technology under NOx RACT (6 NYCRR Part 227-2) or Best Achievable Control Technology (BACT) reviews under Part 231.  For DR sources, DEC is proposing that a simple payback period of greater than 4.0 yearsdemonstrates that a given NOx control technology is economically infeasible.  The proposed calculation methodology for determining this simple payback period only takes into account the capital equipment cost and 2016 capacity payments, annual operating costs are not included in the evaluation.  The more traditional approach of determining economic feasibility based on a cost of emissions control per ton of contaminant reduced is still required for engines subject to Part 222 that are not part of a DR program.  In those cases, DAR-21 refers owners and operators to DAR-20: Economic and Technical Analysis for Reasonably Available Control Technology (RACT) Networks.

The NYSDEC is accepting comments on the proposed guidance until February 17, 2017.  The NEW Trinity Consultants office in Albany, New York has been closely involved in evaluating Part 222 requirements since the rule was adopted in November, and is prepared to assist your team with evaluating potential impact of this proposed guidance and providing comments to NYSDEC on your behalf.  Contact Trinity today at (518) 205-9000 or email Albany's Office Manager, Brian Noel.