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Understanding the EPA’s Demand Response Regulations

Cody Albertus

Understanding how the EPA has defined Demand Response is critical to deciding if you require a Tier 2 certified generator set or a Tier 4 certified generator set.  This can significantly impact the design of your facility.  This is extremely important for users (Data Centers, Hospitals, etc.) that commonly run in storm avoidance mode and or expect to be called upon by the North American Electric Reliability Corporation (NERC) to use your generator sets as part of an Energy Emergency Alert (EEA).

With a Tier 2 certified generator set the EPA allows you to operate for up to 100 hours per year combined for three purposes.  The amount of time allowed for an emergency is unlimited.  The three purposes are;

1. Maintenance and readiness testing of the diesel backup generator set.  A maximum of 100 hours per year of combined operating hours is the maximum amount allowed.  Hours accrued in this mode count against the total operating hours allowed.

2. Emergency Demand Response (EDR) program.  A maximum of 100 hours per year of combined operating hours is the maximum amount allowed.  Hours accrued in this mode count against the total operating hours allowed.  In order to qualify for this you must meet one of the following two conditions.

a. An EDR event must be called by the Reliability Coordinator under the North American Electric Reliability Corporation (NERC) Reliability Standard EOP-002-3 Capacity and Energy Emergencies, or other authorized  entity as determined by the Reliability Coordinator, has declared a Energy Emergency Alert Level 2 as defined in the NERC Reliability Standard 

b. 5% deviation or greater below standard voltage or frequency

3. Non-emergency operation. The diesel backup generator set may be operated for 50 hours per year in a non-emergency operation.  Hours accrued in this mode count against the total operating hours allowed.  There are two operations modes here.

a. Operation not for financial gain.  An example of this is storm avoidance.

b. Operation in support of local reliability.  The non-emergency operation allowance can be used to supply power as part of a financial arrangement with another entity if all of the following requirements are met

- The engine is dispatched by the local balancing authority, or distribution, or transmission system operator

- The dispatch is intended to mitigate local transmission and/or distribution limitations so as to avert potential voltage collapse or line overloads that could lead to the interruption of power supply in a local area or region

- The dispatch  follows reliability, emergency  operation or similar protocols that follow specific NERC, regional, state, public utility commission or local  standards or guidelines

- The power is used by the facility itself or supports the local  transmission/distribution system

- Records are kept by the owner/operator that identifies the entity that dispatches the engine and the specific NERC, regional, state, public utility commission or local standards or guidelines that are being followed for dispatching the engine.

- The local balancing authority or local transmission and distribution system operator may keep these records on behalf of the engine owner / operator

c. NOTE:  The non-emergency operation allowance cannot be used for peak shaving, or any other operation to generate income if they do not meet the preceding criteria.

If you are able to meet this criterion you may be able to use a Tier 2 certified product.  So if you wish to operate your generator set outside of this criterion a Tier 4 certified generator set is appropriate for you.

Please note that many local emissions codes and requirements need to also be met.  Contact your local Cummins distributor to get assistance with what products are best suited for your application in your location.