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REPORT:

Stationary Source Committee

SYNOPSIS:

The Stationary Source Committee met Friday, January 20, 1998. Following is a summary of that meeting. The next meeting will be March 20, 1998, 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 11:10 a.m. Present were Committee Chair Mee Hae Lee and Committee Members Ron Loveridge (arriving at 11:10 a.m.), Jon Mikels, Leonard Paulitz, and James Silva (who left at 11:30 a.m. and returned at 12:03 p.m.). Absent was Committee Member Richard Alarcòn. Also in attendance were Board Members Wayne Nastri and Nell Soto. Ms. Soto did not participate in the meeting.

Summary

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

1. Rule 102 - Definitions

Stationary Source Compliance Senior Manager Anupom Ganguli reported to the Committee on this item. Dr. Ganguli said that effective September 1997, EPA excluded 16 compounds from the federal VOC definition. The amendment to Rule 102 would exempt five compounds in March and the remaining 11 compounds would be evaluated for amendment of Rule 102 in May 1998.

John Billheimer asked that cost and availability information be disclosed for the benefit of businesses using the compounds. Dr. Ganguli said this was being done to the extent possible, but some information could not be disclosed because of confidentiality or unavailability. It was also mentioned that this is not a pertinent issue since the use of exempt compounds was voluntary and market-driven.

No action was taken on this item.

2. Three-Year RECLAIM Audit Report

Stationary Source Compliance Senior Manager Pang Mueller reported on this item. She told the Committee about the legal requirements which include an annual program audit which will be submitted to the Board in March; a three-year program audit for socio-economic job impacts; a progress report required by Health & Safety Code Section 40440.2, which required the Board to adopt a 19-member advisory committee (which was done in June 1997); and after rule adoption, the requirement for the Board to hold public hearings to reassess the program.

Ms. Mueller said one milestone coming up, which she wanted to discuss, was the H&S Code Section 40440.2 progress report due to the Board in May 1998. As mentioned before, she told the Committee that the 19-member advisory committee has been working with the staff and a draft report has been released to the group for their review. The public consultation meeting is scheduled for April 3, 1998. Although a public workshop is not required, those involved thought it would be a good idea to have public participation. So far, after three years of implementation, preliminary findings show that RECLAIM emissions have remained below the anticipated 1994 and 1997 AQMP requirements.

Some emission reductions have occurred due to technology implementation. Also, there have been no significant geographic shifts in emissions. Ms. Mueller said there has been $42 million in trades, with over half that amount last year. RTC prices have been steadily on the increase, especially for future years, and job impacts have not been as high as anticipated. Although it was anticipated that 866 jobs annually would be lost at the time RECLAIM was adopted, reports are that only 121 jobs have been lost and 14 jobs gained over a three-year period. Ms. Mueller said current concerns raised about the program by the environmental communities are: (a) are emission reductions real, and (b) can the program be viewed as successful? Industry concerns are: (a) cost of monitoring, (b) reporting time and frequency, and (c) the need for an improved RTC transaction mechanism and published information.

Ms. Mueller told the Committee that regarding the H&S Code requirement for public hearings five years after rule adoption, staff suggests the Board open public hearings at the same time as the Board receives the 3-year progress report. Following the commencement of public hearings, the Board may continue hearings for up to two years, at which time the Board must make and ratify the findings on the program, as the Board feels is appropriate.

Mr. Paulitz asked about individual facilities that would have to ratchet down a certain percentage, whether they have been monitored, and have they complied. Ms. Mueller stated that most facilities have complied with their allocation. Among the facilities that have exceeded their allocation, the majority of the exceedances have come from the use of missing data when the facilities did not comply with monitoring and reporting requirements.

Mr. Paulitz asked if we have done anything about the missing data. Ms. Coy explained the missing data procedure and that the reporting infrastructure has been put into place. She said the general feeling of staff and the advisory committee is that it has been a successful three years in overcoming the challenges of CEMs installation and RTU transmission. She added, as we move into the next three years, the program will continue with the reporting structure in place, and due to the declining caps, the emissions will approach the allocation line. Facility managers will have to make choices between buying RTCs or putting on control equipment.

Mr. Loveridge asked about the composition of the advisory committee and whether the Board would see their comments. Ms. Mueller said the 19 members were representatives of industry, environmental groups, ARB, EPA, and trading/financial representatives. Ms. Coy said the advisory committee’s comments will be included in each chapter of the Three-Year Audit Report.

Ms. Lee asked if an advisory committee representative would be attending the Board meeting. Ms. Mueller said yes, and they are also invited to make a presentation at the public consultation meeting in April as well.

3. AB 2588 Annual Report and Cost Estimate

This presentation was made by Stationary Source Compliance Senior Manager Ben Shaw. He told the Committee that this is a combination item that includes four items. The first is an annual report required by state law to present results at a public meeting and the other three are consent items that have to do with financing the program. He said the annual report progress was good but, because of state law changes, a lot of unanticipated work was required. The FY 98-99 cost estimate for the core program is $1,329,330. This is 13% ($196,996) less than FY 97-98. It is proposed that industrywide facilities be assessed a $52 fee for inventory and risk evaluations. A fee offset of up to $1 million is proposed for FY 98-99 due to a declining number of facilities in the program. The objective is to maintain fees at the FY 96-97 level. Based on a refined review of facilities, an increased fee offset of up to $350,000 is proposed for FY 97-98. Mr. Shaw said the original fee offset estimate of $700,000, which was approved on March 14, 1997 for FY 97-98, was based on preliminary information. Mr. Shaw said the implication on fees was that a special toxic fund will be depleted by July 1999. If the fee method is not modified, fees for FY 1999-2000 are expected to increase dramatically for core facilities. An alternative method is needed to fund the program. He said staff recommends inclusion in the statewide fee regulation, approval of the cost estimate and findings for submittal to CARB, and approval of offsets for FY 97-98 and FY 98-99.

Ms. Lee asked how many years we can supplement the program. Mr. Shaw said through next year. Then, the available reserve funds for this program would be exhausted.

After discussion by staff and the Committee on collection and payment of the fees, Ms. Lee asked for alternative choices to be brought to the Board for consideration.

Acting Executive Officer Barry Wallerstein said he would be consulting with District Counsel on this item, and indicated that staff will be presenting choices for the Board’s consideration.

4. Update on New Source Review

Stationary Source Compliance Senior Manager Anupom Ganguli told the Committee that the AQMD is required to demonstrate equivalency with state and federal NSR requirements. Dr. Ganguli stated that two previous reports have been submitted to the Board on this issue: (1) for the period October 1990 through July 1995, showing full compliance with state and federal requirements; and (2) the last report for August 1995 through July 1996, showing compliance with all requirements except for NOx emissions relative to the state NSR requirements. However, a change in methodology has been developed by the AQMD and ARB staff for demonstrating compliance with state law requirements for offsets. The new data shows full compliance with all requirements for the entire period, October 1990 through July 1997, based on the new methodology. Dr. Ganguli also reported that a future problem may be encountered with NOx offsets and the situation needs to be watched carefully.

5. RFP for Phase II Assessment Study of Architectural Coatings

Stationary Source Compliance Senior Manager Fred Lettice gave the presentation on this item. He told the Committee that architectural coatings emit 58 tons/day. He said there is a key AQMP measure targeting further VOC reductions. The AQMP requires an additional 33% reduction. Current efforts include conducting site visits and data collection. Mr. Lettice said the Eastern Michigan University (EMU) study is nearly finalized. Data collection and the EMU study indicate zero- and low-VOC interior and exterior coatings are available for a variety of uses. He said the study is to develop further information pertaining to performance characteristics such as durability and application properties of new formulations and the contractor will perform side-by-side comparisons of solvent-based, waterborne, and zero-VOC coatings. The proposed study is not expected to exceed $90,000. Mr. Lettice said staff is developing an Architectural Coatings Technology Conference and staff will be participating in the development of a statewide suggested control measure. This RFP was presented to the Administrative Committee. In response to an industry request, the Administrative Committee directed staff to meet with industry representatives on the proposed RFP.

Dr. Wallerstein said a meeting with industry representatives would be held to get their comments on the RFP.

6. Notice of Violation Policy for Equipment Without a Permit to Construct

(Per staff request, this item was continued to next month’s meeting.)

7. Update on Rule 1401 - New Source Review of Carcinogenic Air Contaminants and Rule 1402 - Control of Toxic Air Contaminants from Existing Sources

Stationary Source Compliance Senior Manager Jill Whynot reported on this item and Initiative #10 under Agenda Item #8. She told the Committee this initiative involves the Governing Board re-opening for public comment the toxics significance thresholds for cancer and non-cancer impacts contained in Rule 1402, and consideration of adding additional compounds and non-carcinogenic impact prevention into Rule 1401. She said staff is working on analysis of industries affected and their control options, environmental and socioeconomic impacts and mitigation, and resource impacts.

Ms. Whynot told the Committee a Notice of Preparation for Environmental Assessment was released January 30, 1998 for public comment. Close of comments is March 2, 1998. She said there have been extensive discussions with other agency representatives on risk assessment. A Rule 1401/1402 Working Group meeting will be held in early March.

Mr. Nastri said everything is moving in a fairly expeditious manner. A good framework for understanding concepts of risk assessment management was obtained at a recent meeting. He explained that Office of Environmental Health Hazard Assessment (OEHHA) has developed proposed revised risk methods that include using a range of exposure periods for evaluating risks. These changes may make it more difficult for regulators to establish policy on risk threshold levels.

John Billheimer said the key difference between Rules 1402 and 1401 is the question "is the equipment new, relocated, or modified?" Traditionally, if you are relocating or modifying equipment, you had to install the latest technology. Many smaller sources simply move their equipment because they lost their lease or some other business reason. They are not really in a position to redesign or develop new concepts. Relocated and modified equipment should not be treated in the same manner as new equipment. Mr. Billheimer feels that in many cases there is an injustice occurring.

8. Status of Environmental Justice Initiatives:

Initiative #2 - Ambient Monitoring of Air Toxics: Director of Applied Science and Technology Mel Zeldin gave a status report on this item. He told the Committee that the Board approved the third mobile platform and all the equipment has been ordered, and we expect to receive the equipment in the next few weeks. As far as the Mates II Study is concerned, it has been recommended that Compton be used in lieu of Hawthorne as the final network site. Staff is in the process of finding locations for three new sites, and is making good progress in finding appropriate facilities in all three locations. Mr. Zeldin said the emissions inventory project RFP evaluation has been completed and a recommendation will go before the Board at the March meeting. He said the Microscale Study is the part of the program that has generated the most discussion. The Technical Review Group has endorsed the 6-step process to find specific locations for the mobile platforms in the Microscale Study, and one of the steps will include a microscale inventory in and around the area where the monitoring would occur. Staff has had excellent cooperation from the Los Angeles Unified School District, which has conducted similar-type microscale inventories to assist us in that process. He said the Technical Review Group met a few weeks ago and will continue to meet on a monthly basis.

Initiative #8 - Field Inspection Technology: Stationary Source Compliance Assistant Deputy Executive Officer Carol Coy reported to the Committee that this initiative went before the Board for approval of the "State of the Science" study RFP last week. She said the RFP has been released and the closing date for accepting proposals is March 20. The proposals will be reviewed the following week. Ms. Coy said they are trying to "fast-track" the process and will have a contractor recommendation at the Administrative Committee meeting in April, and will propose contract award at the May Board meeting. She said Mr. Zeldin and his staff have been working hard on their internal lab assessment, which will be completed in March. Three laboratory experts will be joining the peer review group, and Stationary Source Compliance is trying to obtain commitments from agencies that work with field monitoring instrumentation. Ms. Coy said they hope to complete selection of two individuals this week, and hope to have a full five-member panel by the time of the Technology Committee meeting next week.

The meeting was adjourned at 12:25 p.m.

Attachments

February 20, 1998 Committee Agenda (without its attachments)

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