By CASSANDRA SWEET
The US Environmental Protection Agency
issued new emission rules Tuesday for diesel generators used
for oil and natural-gas production, emergency situations and
other uses that the agency said would cut costs while reducing
The rules are in line with a settlement agreement the EPA
reached with EnerNOC Inc. and other companies to resolve an
appeals court challenge the companies had filed against the EPA
over an earlier version of the regulations.
Shares of EnerNoc closed Tuesday more than 25% higher at
$15.76, following release of the new rules.
The new rules will cut costs for diesel-generator users by
$139 million/year, while reducing hazardous air pollutants, carbon monoxide, nitrogen oxides and
other pollution, the EPA said.
Diesel generators emit pollution that can cause cancer and
can aggravate respiratory and heart diseases as well as cause
neurological or other health problems, the EPA said.
EnerNOC and other providers of what are called
"demand-response" services, arrange with large electricity
users to agree in advance to cut their power use during times
of peak power demand.
Quickly removing large chunks of energy demand can ease a
strained power grid on a hot summer day. In the US Mid-Atlantic
and other power markets, such removal of power demand is
considered akin to providing additional backup power to the
Many demand-response customers use diesel generators during
times when they reduce the amount of power they take off the
Under the EPA's new rules, diesel generators used during
emergencies, including during times of peak power demand, can
operate for up to 100 hours a year and the operators must file
a yearly report detailing the dates and times of their
The new rules are good for EnerNOC; however, power-plant
operators that compete to supply power to the grid in the US
Mid-Atlantic are likely to request additional changes to the
rules, said UBS analyst Julien Dumoulin-Smith.
"Expect vigorous appeal by the generators, and potential for
state-specific air regulations," Mr. Dumoulin-Smith said. He
noted that power-plant operators FirstEnergy Corp. and Exelon
Corp., among others were likely to be negatively affected by
expanded opportunities for demand-response providers afforded
by the new EPA rules.
Dow Jones Newswires