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BOARD MEETING DATE: August 13, 1999 AGENDA NO. 23

PROPOSAL:

Execute Contracts for On-Road Clean Fuel Projects Awarded Under Carl Moyer Memorial Air Quality Standards Attainment Program

SYNOPSIS:

On April 9, 1999, the Board approved the release of RFP #9899-28 to implement the Carl Moyer Memorial Air Quality Standards Attainment Program. This RFP solicited proposals for low-emission on- and off-road vehicles and equipment, including marine, construction and agricultural equipment. $5 million was allocated for on-road clean fuel trucks. Proposal submissions for on-road clean fuel truck projects have been reviewed and staff proposes to award contracts under this program to fund the differential cost of 104 natural gas refuse trucks at a total funding of $4,996,034.

COMMITTEE:

Technology, July 16, 1999, Recommended for Approval

RECOMMENDED ACTION:

Upon receipt of funding from the California Air Resources Board, authorize the Chairman to execute the following contracts from the Carl Moyer Program Special Revenue Fund:

1. A contract with Specialty Transportation Services, Inc., in an amount not to exceed $616,480, to repower 40 transfer trucks to natural gas.
2. A contract with Burrtec Waste Industries, Inc., in an amount not to exceed $375,592, to repower 8 trucks to natural gas and purchase 5 new natural gas trucks.
3. A contract with Waste Management Inc., Orange County, in an amount not to exceed $1,008,502, to repower 11 refuse trucks to natural gas.
4. A contract with Waste Management, Inc., Palm Desert, in an amount not to exceed $1,466,912, to repower 16 refuse trucks to natural gas.
5. A contract with Waste Management, Inc., Chino, in an amount not to exceed $1,283,548, to repower 14 refuse trucks to natural gas.
6. A contract with City of Los Angeles, Department of Sanitation, in an amount not to exceed $245,000, for the purchase of 10 new natural gas refuse trucks.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The federal Clean Air Act Amendments of 1990 classified the South Coast Air Basin as "extreme" nonattainment for ozone, and "serious" nonattainment for fine particulate matter (PM₁₀) and carbon monoxide. In September 1998, the California Air Resources Board approved its Science Review Panel's recommendation and listed diesel particulate as a toxic air contaminant based on its potential human cancer risk. With an increasing number of trucks and other heavy-duty vehicles and a multiplying of vehicle miles traveled (VMT), the need for reducing emissions from these sources is critically important to meet clean air goals.

The majority of heavy-duty vehicles in the Basin are powered by diesel engines, which contribute significantly to the Basin’s emissions of NOx and particulates. The District has long recognized the adverse air quality and health impacts of diesel exhaust. The AQMD’s Environmental Justice Initiative No. 7 targets the reduction of diesel exhaust in the Basin. The Board reaffirmed its position supporting the purchase and use of alternative fuel vehicles in transit and other fleets at its October 1998 meeting. At the January 1999 Board meeting, the Board adopted a "Children’s Air Quality Agenda" to pursue additional measures to protect children from disproportionate impacts of air pollution.

In FY 1998-99, then-Governor Wilson and the California State Legislature, through the State budget process, authorized $25 million in funding as incentives for the purchase of cleaner heavy-duty engines. The program is named after the late Dr. Carl Moyer, in recognition of his work in the air quality field, and his efforts in bringing about this incentive program. The Carl Moyer Memorial Air Quality Standards Attainment Program (Carl Moyer Program) provides funding for the incremental cost of cleaner heavy-duty vehicles, off-road vehicles and equipment, marine, and locomotive engines. The ARB is administering the overall program effort and has developed the program requirements and criteria. Project funding is administered by local air districts. The AQMD has been allocated $11,273,020 in Carl Moyer funds.

Proposal

At its April 1999 meeting, the Governing Board approved the release of RFP #9899-28 to solicit projects for low-emission, on- and off-road vehicles and equipment, including refuse haulers, over-the-road trucks, transit and school buses, construction equipment, marine and port applications, and other vehicles and equipment. New engines, repowers and retrofits are allowed within the program. The Board approved the staff proposal that applications for on-road clean fuel trucks that meet ARB criteria be funded on a first-come, first-served basis.

ARB required that all projects meet a $12,000/ton-or-better cost effectiveness for standard NOx reductions, that engines and retrofit kits must be certified to ARB low-NOx standards, and that emission reductions be a minimum of 25% for retrofits and 30% for new engines. In addition, AQMD determined that clean, alternative fuels would be given funding priority. (Alternative fuels include compressed natural gas, liquefied natural gas, methanol, ethanol and propane.)

Recognizing the contribution to the emissions inventory, projects were divided into two categories with proportionate funding goals. The categories and respective funding goals include:

All proposals responding to RFP #9899-28 were to be accepted beginning on May 7, 1999 and ending on July 1, 1999. To expedite implementation, applications for the on-road clean fuel category, excluding transit and school buses, were to be funded on a first-come, first-served basis.

Response to RFP 9899-28 has been overwhelming. Applications received before the closing date of July 1, 1999 total over $52 million; the on-road clean fuel category total about $22 million. Attached to this Board Letter is a summary of all applicants to the on-road category (Attachment 1). A number of applications, totaling about $11 million, were received at the AQMD headquarters prior to the opening business hours of 7:30 am on May 7, 1999. In order to be fair to all applicants attempting to achieve first-come, first-served status and to use public funds effectively, all applications received prior to 7:30 am were considered received at 7:30 am and all six qualified applicants received full or partial funding. The RFP explained that partial funding would be awarded if full funding was not available. Projects were awarded in a manner to best reflect the goals of funding all qualified applicants received before 7:30 am and achieving cost-effective emissions reductions.

All proposals were reviewed by AQMD staff for completeness and accuracy, to determine compliance with ARB criteria and calculate cost effectiveness. All proposals were then reviewed by ARB staff and cost effectiveness was re-calculated. Staff proposes that the first Carl Moyer Program awards be made to on-road clean fuel truck projects appearing below. The proposed project awards will fund the purchase of new natural gas refuse trucks and the repower and retrofit of existing refuse trucks to natural gas. The proposed projects reflect a diversity of operating cycles, geographical distribution and both private and public fleets. The specific projects proposed for funding are as follows:

If any of these recommended projects should be unable to conduct the purchase, repower and retrofit as proposed, the staff recommends to disqualify the project(s) and move down the existing list of qualified projects, distributing funds based on the first-come, first-served and most cost effective approach, subject to Board approval.

Specialty Transportation Services, Inc., (STS) is a provider of municipal solid waste and bulk industrial transport services throughout the United States. STS has several operating bases in Los Angeles County, including Burbank and Santa Fe Springs and another in Corona. STS has exclusive waste transfer contracts to transport solid and special waste from transfer stations to landfill sites owned by either the municipality or waste services company. STS submitted a proposal to retrofit 40 of its waste transfer trucks with dual fuel Caterpillar engines, using LNG as the alternate fuel. Staff recommends full funding for this project. On average, each transfer truck operates 3,432 hours and consumes approximately 31,200 gallons of fuel per year. The retrofit program will achieve NOx emissions reductions of up to 71 tons per year at an average cost effectiveness of $833 per ton.

Burrtec Waste Industries, Inc., (Burrtec) is a private company that hauls refuse throughout the Inland Empire. They operate approximately 175 trucks at five depots in Riverside, Fontana, Victorville, Irwindale and Yucaipa. Burrtec proposed a combination of retrofits, repowers and new natural gas trucks for a total of 20 vehicles. Staff recommends that Burrtec be awarded funding for the repower/retrofit of 8 existing trucks with Caterpillar 3126 and C-12 engines to dual-fuel compressed and liquefied natural gas (CNG/LNG) capability. The proposed engines use a combination of approximately 85% natural gas and 15% diesel fuel to achieve ARB optional low-NOx certification (2.5 g/bhp-hr). Staff also recommends that Burrtec be awarded funding to purchase five new Mack E7-300 trucks with LNG capability. Burrtec estimates that each of their trucks average 82,000 miles annually and consume approximately 17,000 gallons of diesel fuel per year. The repower/retrofit and new purchase program will achieve NOx emissions reductions of up to 17 tons per year at an average cost effectiveness of $2,269 per ton.

Waste Management of Orange County, Chino, Palm Desert and Moreno Valley (WM) submitted an application to repower 70 refuse collection trucks. Staff recommends funding for 41 trucks based on cost effectiveness considerations. The trucks are to be distributed throughout WM's bases within the Basin. The WM proposal included a range of specific vehicle cost-effectiveness. Although the vehicles selected for funding reflect the best cost-effectiveness, it is recognized that actual cost-effectiveness and emission reductions will vary based on specific vehicle operating locations and variance in vehicle routes. All repowers will consist of late-model refuse trucks to be equipped with dedicated CNG Cummins engines and will be in operation for 12 years. The Cummins L10G dedicated engine is tested to a NOx level of 1.6 g/bhp-hr and certified to a level of 2.0 g/bhp-hr. On average, each refuse truck operates 2,600 hours per year and consumes up to 13,000 gallons of fuel per year. The repower/retrofit program will result in up to 39 tons per year of NOx emission reduction. Further, by placing the repowers at the respective bases contemplated in their proposal, WM will expand the compressed natural gas (CNG) infrastructure in the Basin.

City of Los Angeles proposed the purchase and repower of 17 trucks in several city fleets. Staff recommends funding the purchase of 10 new sanitation trucks, utilizing the Caterpillar C-10 engine. This engine utilizes a combination of approximately 85 percent natural gas and 15 percent diesel fuel. It is expected to achieve ARB low NOx certification of 2.5 g/bhp-hr. Each of the trucks average about 21,000 miles per year. This project will result in NOx emissions of approximately 3.90 tons per year over an expected 10-year life.

Staff plans to return to the Board in September with proposed awards for on-road vehicles, including school and transit buses, and off-road vehicles and equipment under RFP #9899-28. ARB was allocated $19 million in its 1999-2000 fiscal year budget to augment the Carl Moyer Program. Therefore, staff plans to submit for approval at the September Governing Board meeting release of an RFP to solicit projects for the second increment of Carl Moyer Program funding.

Outreach

In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the RFP and inviting bids was published in the following publications:

Additionally, potential bidders were notified from the Los Angeles County MTA and Cal Trans Directories of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notice of the RFP was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon] and AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

In addition to the regular AQMD RFP outreach efforts, a letter and informational brochure was sent to several mailing lists representing trucking, bus, marine and off-road equipment entities. Finally, a series of seven bid conferences/informational workshops were held at venues throughout the Basin including City of Riverside, San Bernardino, Coachella Valley, Santa Ana, Port of Los Angeles, and Downtown Los Angeles to provide information on the program and how to apply. Also, staff made presentations at conferences and workshops.

Benefits to AQMD

AQMD’s Clean Fuels Program has been active in funding the development and demonstration of low-emission, alternative fuel technologies within its Technology Advancement office. The AQMD has also supported a number of activities directed to commercialization of low-emission alternative fuel technologies. The proposed projects will have significant emission benefits for many years. The combined projects will reduce NOx by up to 130 tons a year. Project life averages 12 years.

Resource Impacts

Sufficient funds are available from the Carl Moyer Program Fund, established as a special revenue fund resulting from the statewide Carl Moyer Memorial Air Quality Standards Attainment Program administered by the California Environmental Protection Agency’s Air Resources Board (ARB). The objective of the Carl Moyer Program is to accelerate the introduction of low-emission heavy-duty engines. Funds are distributed by the ARB through local air districts. Funds from this program are restricted to be used as incentives to private companies or public agencies operating heavy-duty engines in California to cover an incremental portion of the cost of cleaner on-road, off-road, marine, and locomotive engines.

Attachments

On-Road Clean Fuel Vehicle Proposals to RFP #9899-28

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