REPORT:
Mobile Source CommitteeSYNOPSIS:
The Mobile Source Committee met on Friday, June 28, 1996. Presentations were made on the following items: Legislative Update; Program Comparison: AQIP and AB 2766; AQIP Proposal Ranking Methodology; Update on Intercredit Trading; Status Report on REACH Task Force; and Progress Report on 1997 AQMP/PM10 Task Force. The next meeting is July 26, 1996, at 9:30 a.m., in Conference Room CC-8.
RECOMMENDED ACTION:
Candace Haggard, Chairperson
Mobile Source Committee
ATTENDANCE:
Present: Committee Chairperson Candace Haggard, Committee Vice Chairperson Nell Soto (arrived at 9:44 a.m.), Committee Member Mee Hae Lee (arrived at 9:36 a.m. and left at 11:14 a.m.), and Committee Member Ronald Loveridge (arrived at 9:44 a.m.). Absent: Committee Member Marvin Braude. Also present: Governing Board Chairman Jon Mikels, not voting. An attendance roster is attached (Attachment I).
MOBILE SOURCE COMMITTEE DISCUSSION ITEMS
1.Legislative Update
Staff discussed that AB 3248 (Napolitano) will be given an interim hearing to further discuss the issues. This bill would create a new office of public affairs and local government assistance and would require AQMD's share of the AB 2766 motor vehicle registration fee revenues be redirected. Staff indicated that Board Chairman Jon Mikels testified during the hearing.
Staff advised that the Assembly took up the April 22 version of SB 836 (Lewis) on the Floor, approved it, and sent it to the Senate on a 41 - 25 vote. This bill will then likely be referred to a Conference Committee.
A meeting was held between members of Senator Lewis' staff, Jim Lantry (consultant), and AQMD staff to determine what substitute measures could be implemented for future ISRs and Rule 2202. During the meeting, staff reported that Jim Lantry's group supports two ideas in particular: more extensive use of remote sensing and a voluntary rideshare program with some type of ongoing monitoring mechanism.
2.Program Comparison: AQIP and AB 2766
Staff discussed the similarities and differences in both the AQIP and AB 2766 programs (Attachment II). The idea for both is to reduce mobile source emissions. Bidders conferences are held before the proposals are received. Cost effectiveness is a consideration and the Board approves the list of projects in both of these programs. Those entities that are awarded the contracts submit quarterly status reports to the AQMD.
With AB 2766, the RFPs are divided into project categories. The proposals are submitted every two years. Targeted funding amounts for the categories are included. With AQIP under Rule 2202, the projects are assigned categories after the proposals are received. The proposals are submitted on an ongoing basis. There is no target funding amount for the categories and the contracts are awarded quarterly.
The sources of funding are also different. With AB 2766, the dollars come from the motor vehicle registration fees. With the AQIP, the source of funding is the employers that chose to participate in the AQIP compliance option.
The way the proposals are reviewed is also different. With AB 2766, the review is conducted by the MSRC with a variety of individuals from across the region. When the proposals come in, the MSRC Technical Advisory Committee reviews the proposals and makes recommendations to the MSRC and finally the Board will either approve or disapprove the entire work program. With the AQIP, the proposals are reviewed by AQMD staff with Transportation Programs staff taking the lead with input from the Technology Advancement Office, Planning, and Public Advisor as requested from time to time depending on the type of proposals received, as well as the expertise needed to complete the process. On a quarterly basis, AQMD staff takes the recommendations to the Mobile Source Committee and finally to the Board for approval.
There are differences in the evaluation criteria between the two programs, as well. With AB 2766, the evaluation criteria specifically require multi-agency or multi-jurisdictional types of submittals. Verified co- funding is key in the evaluation of a proposal. For either one of these programs, anybody can submit proposals. But with the AQIP, specific emission reduction targets are required rather than the general mobile source reduction required by AB 2766. The AQIP requires these specific targets because these subsume the targets the employers would have reached had they chosen another pollution reduction program. As feasible, the projects are awarded in the same counties from which the funds are submitted.
As far as the contract administration and time frame are concerned, with AB 2766, an outside consulting firm is hired to administer the process for the proposal submittals, evaluation, and contract administration. The proposals are submitted every two years with the work being completed in a 12 - 18 month timeframe. With the AQIP, AQMD staff administers the contracting procedures. AQIP contracts are for one year, a shorter timeframe consistent with Rule 2202.
3.AQIP Proposal Ranking Methodology
Staff gave a brief report on the AQIP ranking methodology. As included in the Rule 2202 language, there are four key requirements: Equivalent Emission Reductions or Air Quality; Cost-Effectiveness, Long- Term Advancement Mobile Source Technology; Proportional County Allocations to Degree Feasible. Emission reductions must be real, quantifiable, enforceable and surplus.
In reviewing the RFPs, there are three criteria being considered: technical, cost-effectiveness, and other factors. Under the technical criteria, a proposal must demonstrate that it contains a mobile source emission reduction strategy: a technology-based strategy, a fuel-based strategy, or a trip reduction strategy. Staff looks at each proposal compared to the AQMP objectives, goals, and schedule for implementation of control measures. Staff looks at the potential emissions equivalency of the proposal and also the technical expertise of the firm that will carry out the proposal.
Under the cost effectiveness criteria of the proposal evaluation, staff looks at dollars per pound and whether there are multiple pollutant benefits, which are incorporated into the overall cost effectiveness evaluation. Staff also takes into consideration projects that yield a number of years worth of credits to the investment. A good example of this is the conversion of a diesel school bus to clean fuel, which yields multi- year benefits.
Committee Chairperson Candace Haggard recognized a member of the public. Larry Mahar of Ecotek expressed his opinion on staff's AQIP recommendations for the first quarter of 1996 (Attachment III). He argued that the scrapping of a vehicle does not necessarily equate to the reduction of any emissions. The scrapped vehicle may not have been routinely in use prior to being scrapped. Even if it had, there is no assurance that the replacement vehicle was any better or more well tuned than the scrapped vehicle. At best, the emission reduction would be the difference between the emissions of the old vehicle and the replacement which is unknown. Staff indicated that it would meet with anyone with inquiries regarding the proposal ranking methodology or the evaluation of a specific project.
4.Update on Intercredit Trading
Staff explained that the presentation would focus on a summary of initial discussions for an expanded AQIP (Attachment IV). Sources subject to regulation may choose to become an AQIP clean air investor by paying fees to the Fund. In turn, the Fund invests the money in various emission reduction strategies. Staff emphasized that this program is designed to achieve emissions reduction equivalency.
Staff stated the different objectives of the expanded AQIP: to provide the regulated community with an additional compliance option; to promote private market strategies; to achieve equivalent emission reductions; and to promote clean technologies.
Under the expanded AQIP, in addition to Rule 2202, investors from selected Regulation IV and XI sources will be considered. Also a proposal to allow private parties or citizens to donate to this Fund for purposes of improving air quality is being evaluated. Staff indicated that there is a desire that donations be tax deductible. Legal staff is evaluating the proposal.
The AQIP emission reductions would be used for future compliance requirements. In terms of the existing compliance requirements, environmental groups have a desire to restrict the use of these emission reductions on existing compliance requirements to outliers only.
The possible AQIP approach under the extended program is to receive and pre-qualify the proposals by estimating the cost and emission reductions, and then establish the set price to charge the participants and ultimately fund the project. Such an approach would help ensure the right price is established as well as assure necessary emission reductions. The concept basically is to link the proposals and the fees.
In pre-qualifying the projects, two categories could be established. The first category would be projects with established emissions protocols. The emissions could be quantified in a relatively nearterm. The second category proposals are projects with emission reductions or air quality benefits but no standard quantification method. The second group of proposals would be in addition to the equivalent emission reductions proposals, once the emission targets are met.
Once the proposals are qualified, the actual fee for selected Regulation IV and XI sources is based on Category I Proposals. These are the near-term projects with protocols. An average cost is calculated by pollutant based on the cost-effectiveness in terms of dollar per ton. This becomes the basic fee. In addition, there could be a premium for administrative cost and to encourage use of the market place. Such a price structure would be higher than the private market. Staff believes that the business and the environmental groups generally agree with this concept as well. Staff indicated that the investment fee for Rule 2202 sources remains the same.
The other elements of this program could include: Consultation Committee, Status Reports and Program Audits, and Corrective Measures.
In answer to the question raised by Chairperson Haggard, this presentation is for information and a recommendation from the Committee is not requested at this time.
5.REACH Task Force
Staff stated that copies of April and May REACH Task Force minutes are attached in today's agenda (Attachment V). A written summary of the June 26, 1996 REACH meeting will be attached to next month's Mobile Source Committee agenda. SCAG is responsible for providing to the AQMD the transportation control strategy to be included in the draft 1997 AQMP. SCAG's Regional Council requested its staff to include the REACH Task Force's recommendations on a pricing/market incentive measure. Consistent with the schedule contained in the memorandum of understanding with the AQMD, SCAG must provide the AQMD with a draft transportation control strategy by the end of June. Thereafter, SCAG, AQMD, and other REACH Task Force members will work together to refine the strategy and incorporate appropriate results as the modeling effort reaches its conclusion. A concern was raised by the REACH members regarding release of a draft write-up before the final draft was completed. The Mobile Source Committee is not being asked to take a position at this time.
6.Progress Report on 1997 AQMP/PM10 Task Force
Staff began the report by outlining the new elements included in the 1997 AQMP Revision. (Attachment VI). The new base year for this plan is 1993. From a number of data sources, updated emission factors were established. Notably, staff has currently used EMFAC7G for the mobile sources and has updated emission factors for some of the fugitive dust categories including construction and entrained road dust. Staff has updated growth projections and new information on ammonia which plays an important role regarding the formation of particulates. Also, new PM10 design values and updated models are included as new elements and are considered appropriate in the preparation of the plan.
Comparing the figures presented in a pie chart between the 1994 AQMP (1990 base year) and the 1997 AQMP (1993 base year), on-road mobile sources for NOx continue to dominate. Similarly, on the VOC side, on-road mobile sources dominated in 1990 and to a slightly greater extent in the 1993 baseline. On the fugitive dust side, the biggest chunk of the pie is the entrained road dust on paved and unpaved roads. Entrained road dust is the dust from the ground carried by mobile vehicles to the air and suspended in the atmosphere. Compared to the 1990 baseline, the entrained road dust in the 1993 baseline has dropped considerably, mainly because of the adoption of Rule 403 in 1992. On the ammonia inventory, the basis for the previous AQMP was the study provided by Radian (1986), but subsequently with the series of studies on dairy farms, staff has acquired new information on ammonia and has designed new values.
Staff stated that new PM10 models are being tested. The UAM-AERO is used for episodic 24 hour standard. The UAM-Linear Chemistry models every single day per year in order to determine an annual average. The models are currently undergoing performance evaluation.
Some of the potential changes that staff is looking at include the elimination of future ISRs, the reduction of the "black box" control measures, and an improved representation of emissions from military air bases.
The other relevant evaluation to be conducted for the 1997 AQMP is to examine within the constraints of the current AQMP the possible implications of a new federal 8-hr ozone standard, and new federal PM2.5 standards for both the annual and 24-hour. Also, for purposes of conformity, an evaluation to be conducted for the 1997 AQMP is to examine the Ozone Maintenance Plan to 2020 in order to establish the necessary emissions budget.
Previously, the reviews of ozone and particulate matter standards were on separate time tracks. Presently, EPA has put them on the same timeframe. Proposals are due in November, 1996 and the final decision must be promulgated by the EPA in June, 1997.
The current ozone standard is based on a 1-hour average. EPA is preliminarily recommending to change to an 8-hour standard based on the medical and health effects. The other recommendation is to replace expected-exceedance form with concentration-based form. Currently, on a per site basis, one exceedance is allowed per year averaged over 3 years. The fourth exceedance is considered a violation.
Staff indicated that EPA is also recommending to consider the fine and coarse fractions of particulate matter as separate pollutants. PM10 will be the indicator for coarse pollutants and PM2.5 will be the indicator for fine pollutants. On the annual average, the recommendation at this point is to keep the PM10 to 40-50 ug/m3. The recommended range for PM2.5 is 12.5-20 ug/m3. On the 24-hour average, EPA is recommending to either retain or delete 150 ug/m3 on PM10 and on the PM2.5, the range that is being recommended is 18-65 ug/m3. As far as the determination of expected-exceedance form of standard, EPA is not recommending a change.
In looking at a potential annual average PM2.5, in 1995, every area in the basin would have been non- attainment. The ammonia nitrate portion of the graph occupies the largest portion of the PM2.5 graph. The control of NOx, VOC, and ammonia primarily will be the most important aspect in the strategies for controlling PM2.5. Ammonia is a key player even on the PM10 side. The majority of the dairy industry and the Milk Producing Council are willing to relocate out of the basin. An obstacle facing them in their desire to relocate is the 12 1/2% penalty placed upon dairy farmers for selling their property under current state law. The farmers would like to see the 12 1/2% penalty reinvested in local infrastructure.
Staff concluded the presentation by mentioning the upcoming task force meeting and the 1997 AQMP Development Schedule as indicated in the handouts.
7.Rule 2202/ISRs Activity Report
Written report submitted, no comments. (Attachment VII).
8.EIR Review and Preparation
Written report submitted, no comments. (Attachment VIII)
9.Other Business
No comments.
10.Public Comment
Cecilia McLaughlin of TVS Consulting expressed her gratitude for staff's effort in reporting the differences between the MSRC process for funding AB 2766 projects and the AQIP review process.
I. Attendance Roster
II. Program Comparison on AQIP and AB 2766
III. Testimony for the Skool Pool Project by Larry Mahar of Ecotek
IV. Expanded Air Quality Investment Program
V. REACH Task Force Meeting Minutes
VI. 1997 AQMP Revision Status Report
VII. Rule 2202/ISRs Activity Report
VIII. EIR Review and Preparation
MSJULY.doc