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D.C. Circuit Invalidates Emergency Demand Response Exemption for RICE

Posted Tuesday, May 5th, 2015

On May 1, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) reversed and remanded regulatory provisions that allow limited operation of emergency reciprocating internal combustion engines (RICE) in emergency demand response situations. The subject provisions were part of the U.S. Environmental Protection Agency’s (EPA) final action on reconsideration, and allowed emergency RICE to operate for up to 100 hours per year when: (1) a North American Electric Reliability Corporation (NERC) Alert Level 2 is declared, or (2) there is a voltage or frequency deviation of five percent or greater below standard voltage or frequency.

The D.C. Circuit concluded that EPA acted arbitrarily and capriciously by not properly responding to objections raised during the rulemaking process, by relying on faulty evidence to justify the 100 hour exemption, and by not considering alternatives that could have limited the exemption. Issuance of the court’s mandate will be withheld (during which time the existing rules will remain in effect) until seven days after any petition for rehearing is disposed of. The court further stated that if vacating these provisions will cause administrative or other difficulties, EPA or the other parties may file a motion to further delay issuance of the court’s mandate to allow EPA reasonable time to develop interim standards.

Challengers may petition the D.C. Circuit for rehearing, or appeal to the U.S. Supreme Court.

For additional information, contact Andrew Holway.

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