Report:

Stationary Source Committee

Synopsis:

The Stationary Source Committee met on Friday, January 24, 1997. Following is a summary of that meeting. The next Stationary Source Committee meeting will be February 21, 1997, at 10:30 a.m., in AQMD Conference Room CC8.

Recommended Action:

Receive and file this report.

Mee Hae Lee
Chair, Stationary Source Committee

Attendance

The meeting began at 10:30 a.m. Present were Committee Chair Mee Hae Lee and Committee Members James Silva (who left at 11:45 a.m.) and Ron Loveridge (who arrived at 10:44 a.m.). Committee Members Marvin Braude and Nell Soto were not present. Due to their absence, and the vacancy created with Candace Haggard’s replacement on the Board, Board Chairman Jon Mikels, pursuant to the Procedures for Standing Committee of the Governing Board adopted March 8, 1996, appointed Board Members Leonard Paulitz, Cody Cluff and Norma Glover as ad hoc members of the Stationary Source Committee for the meeting January 24, 1997 only.

Summary

The Committee reviewed the items on their agenda (attached). Comments were noted on the following items:

1. Effectiveness of Reg. XIII - New Source Review (NSR)

(Item taken out of order)

Stationary Source Compliance Senior Manager Anupom Ganguli explained that the AQMD is required to make an assessment each year on the efficacy of NSR. While the AQMD’s NSR has been found to be equivalent to the federal requirements, there appears to be a small deficit with the requirements of state law regarding NOx emission offsets. The NSR status for 1995-1996 represents 0.3 tons/day NOx shortfall today, and a projected 3-5 tons/day annual shortfall from next year, mainly caused by permitted sources less than 4 tons/year and sources subject to Rule 1304 - Exemptions. Dr. Ganguli reported on the diminished supply of surplus creditable emission reductions for state compliance (August 1995 to July 1996) and increasing demand for offsets from sources for which the AQMD must supply offsets. Such sources, it may be recalled, are exempt from the offset provisions of Regulation XIII, creating a burden on the AQMD to provide emission reductions to balance the books, under state law.

Dr. Ganguli also discussed the assumptions in the analysis for the future scenario and described the permitting thresholds which determine a facility’s status regarding NSR offset exemptions. While a number of potential solutions are being analyzed in depth, the staff needs additional time to study this issue. Some of the options being investigated include (1) elimination of priority reserve and offset exemptions; (2) increasing the offset ratio to 1.3-1.5; (3) requiring businesses to buy emission reduction credits or RECLAIM trading credits; (4) over-controlling larger sources to supply small sources; and (5) changing state law requirements. No recommendations were made at this time, and this item will again be discussed with the Committee in two to three months, prior to making a recommendation to the full Governing Board for direction. Rulemaking will then be started to develop the appropriate revisions to Regulation XIII.

2. Annual RECLAIM Audit Report

An overview of this item was given by Stationary Source Compliance Senior Manager Pang Mueller. Ms. Mueller first gave the background on the Second Annual RECLAIM Program Audit Report. She told the Committee the AQMD Governing Board adopted the RECLAIM program on October 15, 1993. Rule 2015 - Backstop Provisions, requires annual audits and comprehensive three-year audits. Annual audits are to monitor program progress through the assessment of emission reductions, average annual price and availability of RTCs, job impacts, compliance issues, and other performance criteria. She further explained this is the second annual report focusing on the second compliance year and will be included in the AQMD Annual Performance Report to the California Legislature after AQMD Governing Board approval. Ms. Mueller discussed the report’s contents. A brief discussion took place on overall compliance, RTC trades, RECLAIM universe, job impacts, compliance status, and outreach efforts.

3. Rule 2506 (formerly 2009) - Area Source Credits

Stationary Source Compliance Senior Manager Pang Mueller reported that this proposed rule was developed through an extensive public participation process, including ten Steering Committee meetings. Ms. Mueller said the majority of business, EPA, ARB, and environmental concerns have been addressed and resolved, but a few concerns remain for which no consensus, which satisfies all parties, has been found. She briefly reported on the 10% environmental benefit upon conversion of Area Source Credits to RTCs; baseline calculation methodology; electricity conservation; quantification and enforcement protocols; activity level; and usability of credits.

4. Status Report on the EPA National Stakeholder’s Meeting on Title III

Stationary Source Compliance Deputy Executive Officer Pat Leyden reported on this item and discussed the December 4, 1996 letter sent to EPA’s Region IX Administrator Felicia Marcus. The letter, signed by ARB Executive Officer Michael Kenny and California Air Pollution Control Officers Association President Mark Boese, addressed outstanding issues associated with implementing the federal air toxics program in California. In the letter, a meeting with Ms. Marcus was requested. That meeting has now been set for January 28, 1997, at EPA in San Francisco. Ms. Leyden reported that about 22 people representing government agencies, environmental groups, and industry are planning to attend the meeting. After this dialogue between state and federal agencies, a meeting in Washington, D.C. will probably take place.

5. Air Toxics "Hot Spots" Annual Report for 1996

Stationary Source Compliance Assistant Deputy Executive Officer Jack Broadbent announced that this item would be moved on the Board’s agenda to Public Hearings. Stationary Source Compliance Senior Manager Ben Shaw reported on this annual report which will be presented at the February 14, 1997 Board Meeting. A report on the HRA component and toxics rulemaking is required by the Air Toxics "Hot Spots" Information and Assessment Act (AB2588). Mr. Shaw explained that the report contained a summary of the "Hot Spots" Program and annual report requirements. The report also includes a 1997 Risk Assessment Program Summary, control measure development, and summary and expectations for 1997.

The meeting was adjourned at 12:01 p.m.

Attachment

January 24, 1997 Committee Agenda (without its attachments)