Engine owners and operators that are required to comply with EPA’s RICE NESHAP Subpart ZZZZ are advised not to wait for the months prior to the May 3, 2013 compliance date to enact compliance measures (“Are You Ready for RICE NESHAP?,” November 2010.)
The facts are that there are a fixed supply of RICE NESHAP consultants, equipment suppliers and contractors. As the compliance date nears, more engine owners will be implementing RICE NESHAP compliance measures. Simple macro economics shows that with an inelastic supply curve, as demand increases for these services and products, prices will increase. A compliance solution in 2011 will cost much more in the first quarter of 2013.
Along with price increases, delivery times will also increase. Consequently, a facility requiring equipment may miss the mandatory compliance date. This will open the facility to possible non-compliance fines of up to $37,500 a day. The individual responsible for the facility’s compliance may also be subject to felony charges.
One misperception is that the EPA is the motivating force behind RICE NESHAP. The Sierra Club’s litigation against the EPA on the basis of non-enforcement of the Clean Air Act has required the EPA to enact these rulings. Because the Clean Air Act is at the basis of the RICE NESHAP ruling, it will require the Congress to repeal or amend the Act.
Under the current RICE NESHAP ruling, an emergency engine cannot be used for revenue generation except for 15 hours of demand response operation to eliminate a potential blackout. As many peak demand and curtailment engines are used for revenue generation, a reclassification to emergency status will eliminate this revenue source.
Another misconception is the costs to bring an engine into RICE NESHAP compliance. Estimates to bring a 1 MW generator into compliance range from $10,000 to $20,000. This same generator under a peak demand contract may generate $35,000 to $50,000 annually for the owner. Therefore, the payback will be less than one year, which is well within the range of most companies’ return on capital investment requirements.
Time, costs, risk of fines and law revisions are reasons not to wait to comply with the RICE NESHAP subpart ZZZZ ruling. Compliance costs are manageable, especially if taken on sooner rather than later.
Chad Kaderabek, Marketing Manager, & Brent Keller, Applications Engineer, Universal Acoustics & Emission Technologies Inc.
Correction: The Renewable Energy Executive Roundtable in the January 2011 issue misspelled Allan Marks’ first name.
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