REPORT:

Stationary Source Committee

SYNOPSIS:

The Stationary Source Committee met Friday, October 24, 1997. Following is a summary of that meeting. The next Stationary Source Committee meeting is scheduled for November 21, 1997, at 11:00 a.m., in Conference Room CC8.

RECOMMENDED ACTION:

Receive and File.

Mee Hae Lee
Chair, Stationary Source Committee

Attendance

The meeting began at 11:50 a.m. Present were Committee Chair Mee Hae Lee and Committee Members Richard Alarcon (who left at 1:15 p.m.), Jon Mikels (who left at 12:55 p.m.), Leonard Paulitz, and James Silva (who left at 12:55 p.m.). Absent was Committee Member Ronald Loveridge. Board Member Nell Soto attended the meeting but did not participate.

Summary

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

1. Briefing on Air Quality Assistance Fund

Public Advisor LaRonda Bowen briefed the Committee on this item. Ms. Bowen explained the context in which the 1989 legislation was passed that set up the Air Quality Assistance Fund (AQAF) The economic setting was different for businesses and government than it is today. Southern California was in the midst of a deep recession, interest rates were high, and limited funds were available for small businesses to meet their compliance needs. New regulations which required control equipment to be purchased and installed had just been passed by the State of California and the AQMD. To respond to this situation, the California Legislature passed Assembly Bill 2444. AB2444 required the AQMD to provide technical and financial assistance to businesses for compliance.

Ms. Bowen told the Committee the purpose of the AQAF (which sunsets January 1, 1999) is to increase small business access to affordable financing, support small business compliance, minimize economic dislocation, and increase awareness of the financial community to small business needs. Ms. Bowen went on to discuss AQAF loan guarantees; recent changes to the law; and AQAF obligated and unobligated funds (projected through June 30, 1998).

Ms. Lee asked if there is a way to be more accommodating to small businesses, in order for more of them to receive funds from the AQAF. She asked staff to look at revising the guaranty criteria and at other options to make the fund more accessible. Ms. Lee asked Ms. Bowen to report back to the Governing Board in December with these options. Ms. Lee suggested that at that meeting, the Board look into the legal and technical feasibility of using an organization outside of AQMD to administer the fund.

Councilman Alarcon asked how many loans have been helped with the AQAF. Ms. Bowen responded that approximately 31 companies have received direct loan guarantees. Others have received financial assistance in the form of help preparing loan documents and packages for non-AQAF lenders. Councilman Alarcon concurred with Ms. Lee’s request to have the Board review options for making the fund more accessible.

Supervisor Mikels asked about the money being diverted from this fund to support voluntary ridesharing as a result of SB836. Ms. Bowen said that $1.5 million was diverted in January, 1997, and that $1.5 million was scheduled to be diverted in January, 1998. Supervisor Mikels indicated that the preliminary results on voluntary ridesharing indicate that it is less effective than mandatory ridesharing. He questioned the value of diverting the second $1.5 million to this use.

Curt Coleman, Law Offices of Curtis L. Coleman, told the Committee that he had a client who has a loan guaranty on a $400,000 loan for emission control equipment. He believes the loan would not have been made without the guaranty. He said that if the loan had not been available, it would have meant a loss of 150 jobs in the East Los Angeles area. He complimented staff on their help and for doing an outstanding job.

John Billheimer commented that there are a lot of areas in small business where money could strategically be invested to support compliance.

2. Regulation XXX - Title V Permits and Rule 212 - Standards for Approving Permits

Assistant Deputy Executive Officer Carol Coy and Assistant Deputy Executive Officer Jack Broadbent gave an update to the Committee on this item. Ms. Coy said this important amendment would remove 300 facilities from getting Title V permits. Since the last report to the Committee in September, staff has held a public consultation meeting on Rule 212 and met with industry and environmental groups to resolve remaining concerns on issues pertaining to Regulation XXX. Ms. Coy said there has been a major breakthrough on the portable equipment issue in the last couple of weeks. EPA agrees that locally permitted portable engines for temporary operations will not be required to be on the Title V permit for a one-year window of operation. The SIP gap issue will not be resolved by the hearing date. More meetings are planned on this. Consensus is expected in the ongoing discussions regarding public hearing request procedures.

Deputy Executive Officer of Stationary Source Compliance Pat Leyden told the Committee that there have been approximately 60 rules that EPA has not approved into the SIP. Many of these rules carry old compliance deadlines, such as those related to wood furniture and aerospace operations. Ken Bigos of EPA has been asked to come to the Board hearing with EPA’s schedule for action on these rules.

Mr. Broadbent reported to the Committee on public notification. He said industry requests a de-minimis level to avoid public notification for equipment near schools and elimination of the provision of Rule 212 which requires public notification for toxic substances (other than carcinogenic compounds) which may pose a potential risk of nuisance. One environmental group requests keeping the 1/4-mile noticing for sources with an emission increase exceeding the old NSR threshold. Staff is considering noticing preschools as well as schools with grades K-12.

3. Rule 461 Action Response Plan

Mr. Broadbent reported that this item was back on the agenda this month at the Committee’s request. The Rule 461 Audit revealed substantial defects affecting emissions at 37% of the facilities inspected; 12% of the facilities receiving Notices of Violation (NOVs) or Notices to Comply (NTCs) received follow-up NOVs; 44 NOVs were issued to facilities for not conducting any daily inspections or record keeping, and an additional 66 NTCs were issued to facilities for not conducting daily inspections consistent with rule requirements. Only 10% of the facilities were found to be in full compliance.

Mr. Broadbent told the Committee that the Action Plan will include inspection procedures and frequency, inspection training, and the method of handling violations. These are a few of the compliance aspects that need serious attention if compliance rates are to be improved to acceptable levels. The objectives of the plan are to: inspect all retail gasoline dispensing facilities (RGDFs) by the end of the fiscal year; identify and correct the specific reasons for the non-compliance problem; and develop a long-term program that ensures compliance beyond the immediate program fixes.

He explained to the Committee the following short-term actions which will immediately be implemented as the first part of a more comprehensive program to address the deficiencies found during the audit:

(1) Increased deterrence through the following actions:

(a) Increased inspections, ensuring an annual inspection for all facilities, and continuing to respond to all public complaints;

(b) Reporting quarterly progress to the Stationary Source Committee;

(c) Reviewing NOV settlement protocols to determine if penalties or other tools of the Chief Prosecutor are an adequate deterrent to operating faulty vapor recovery equipment;

(d) Evaluating reduced fee incentives for RGDFs that demonstrate full compliance on an ongoing basis and adjust fees accordingly;

(e) Identifying repeat offenders; consider an escalating scale of fees to cover the cost of compliance in Rule 301;

(2) Establish a dedicated Rule 461 Team;

(3) Prioritize Rule 461 inspections;

(4) Reduce toxic exposures;

(5) Send out a compliance advisory letter;

(6) Evaluate the Weights and Measures contracts;

(7) Establish a testing program;

(8) Enhance outreach;

(9) Request an amendment of Title 17 and decertification of faulty components;

(10) Recommend budget adjustments; and

(11) Amend Rule 461.

Curt Coleman said an option that might be considered as an incentive to RGDFs is a break on fees.

Ron Wilkniss of the Western States Petroleum Association expressed some concerns with the Action Plan but pledged to work with staff to resolve the problem. Staff assured him that they would work with him regarding those concerns.

Because the Committee was losing its quorum, discussion of Item 4, Rule 1110.2 Emissions from Gaseous- and Liquid-Fueled Internal Combustion Engines, and Item 5, Rule 1138 - Control of Emissions from Restaurant Operations, were very briefly discussed by Ms. Leyden. Item 6, Rule 1146.2 - Emissions of NOx from Boilers and Heaters 75,000 to 2MM Btu/Hr, was deferred to the November 21, 1997 Stationary Source Committee meeting. Ms. Leyden distributed information relative to Item 7, Final Report on Particulate Monitoring Advisory Committee (no discussion was needed), and Item 8 was an information item.

The meeting was adjourned at 1:20 p.m.

Attachments

October 24, 1997 Committee Agenda (without its attachments)

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