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BOARD MEETING DATE: December 15, 2000 AGENDA NO. 25




REPORT: 

Stationary Source Committee

SYNOPSIS: 

The Stationary Source Committee met Friday, December 1, 2000. Following is a summary of that meeting. The next meeting will be January 26, 2001, at 10:30 a.m., in Conference Room CC8.

RECOMMENDED ACTION:

Receive and file.

Ronald O. Loveridge
Chairman, Stationary Source Committee

Attendance

The meeting began at 10:30 a.m. Present were Ronald Loveridge, Committee Chair (left at 11:50 a.m.), Cynthia Verdugo-Peralta (arrived at 10:45 a.m.), Jon Mikels (left at 11:30 a.m.), Leonard Paulitz (arrived at 11:00 a.m.) and Jane Carney. Norma Glover was absent.

DISCUSSION ITEMS

1. Report on Rule 1146.2 Implementation Study

Jill Whynot, Manager, Planning, Rule Development & Area Sources, gave a presentation summarizing the Rule 1146.2 Implementation Study Report, which is a Board calendar item for December. Rule 1146.2 requires boilers between 1 and 2MM BTUs to meet a 30 ppm NOx limit. The rule requires an implementation study to be completed eighteen months before applicable compliance dates. This study fulfills the implementation study requirement.

AQMD’s rule is the same as a rule adopted in 1993 in Ventura County, which required 30 ppm NOx for equipment in this size range from 1995 to 1998. AQMD’s rule will reduce 2 to 3 tons per day on NOx from this phase of the rule requirements. Operators may either replace their equipment or retrofit with low NOx burners to meet the rule requirements. Cost effective technology is available today.

There are eight areas of the study:

Staff worked with a Steering Committee and had eight meetings over the last year. The committee provided extensive input and staff incorporated many changes to reflect their suggestions. Staff visited nine facilities in Ventura and Los Angeles counties that had retrofit equipment. At the request of the committee, a contractor was hired to collect and verify information. To help resolve issues, staff used ranges for many estimates throughout the report

There are three remaining issues:

The committee developed independent findings and recommendations that are included in the staff report as Appendix D (Bob Nicksin distributed a copy of this document). Regarding retrofit certification, the committee finding is that equipment is not commercially available since no retrofits have been certified yet. The recommendation is to report to the Board in six months and delay the rule requirement since retrofit kits are not certified for half of the equipment. Staff’s response is that it is premature to expect certifications. The equipment is commercially available but manufacturers usually do not apply for certifications until just prior to the deadline, which is one year away (compliance required in 18 months). Four equipment manufacturers and six burner manufacturers have stated that they intend to have retrofit products available. There are over 125 models of new equipment already certified. Some equipment operators and manufacturers have indicated that they are waiting to see what happens at the Board meeting before proceeding.

The committee has also expressed concern about potential safety issues with retrofits. They recommend that the rule be relaxed if this issue is not resolved in 45 days. Staff would like to continue to work with the industry to help address these concerns, which are outside of AQMD authority. Four half-day meetings in January and February will be scheduled. Staff does not believe that the rule should be relaxed.

The committee recommended that only certain types of data be used in the cost analyses and that costs for additional safety requirements be added. Staff has used several sources of valid data and the contractor’s recommendations for many parameters. To address this issue, staff used ranges for many of the analysis and was conservative. Additional costs for possible safety inspections and testing was added to the report. Staff’s conclusions would not change if the cost effectiveness was based on higher estimates only.

Bob Nicksin from Sempra Energy also gave a presentation regarding the role of the committee and the findings and recommendations described above. There was extensive discussion on each of the points.

A representative from Los Angeles County asked for the Board to consider changing the exemption level from 9,000 therms per year to 12,000 therms per year. The current exemption level requires only about one fourth of the equipment to meet the rule limits but results in eighty percent reduction in emissions from the total population of equipment. Jack Broadbent discussed that the exemption level was heavily debated during the original rule development and adoption and clarified that the item before the Board is an implementation report only.

At the end of the meeting, Ms. Verdugo-Peralta asked about small business impacts from Rule 1146.2. Staff summarized that the majority of operators with equipment in this size range are not small businesses. The next study phase covers smaller equipment where small business are included, such as dry cleaners.

2. Rule 1132 – Emission Reductions from Large Solvent and Coating Operations

Laki Tisopulos, Manager, Planning, Rule Development & Area Sources, presented this item. The proposed rule would implement control measure CTS-09 of the 1999 AQMP and apply to facilities emitting more than 20 tons per year. Facilities subject to the rule would be required to reduce emissions from their spray booth operations by 65 percent through the use of add-on controls, low VOC materials or a combination thereof. The rule also allows facilities to demonstrate compliance with alternative compliance plans provided that they meet a 71.5 percent reduction requirement. The effective compliance dates are 2003 and 2004 for the larger and smaller emitters, respectively. The rule establishes an exemption for those facilities that are willing to limit their emissions to 20 tons per year as well as an exemption for low concentration spray booths. Staff is currently working with industry on several alternative compliance option proposals that were recently received. The proposal is expected to reduce VOC emissions by five tons per day by 2010 (planning inventory). The cost-effectiveness is expected to range from $5,500 per ton to $9,800 per ton. Staff has conducted a detailed socioeconomic analysis that included a facility specific assessment as well as a regional assessment. The public commented on the need for a cost-effectiveness based exemption and opposed the higher reduction target required by the alternative compliance plans. Staff has pledged to continue working with industry towards the resolution of remaining issues and to hold another consultation meeting in early January. The proposed rule is scheduled for a public hearing in January 2001.

3. Annual Report for 2000 on AB 2588 Air Toxics "Hot Spots" Program

Elaine Chang, Assistant Deputy Executive Officer, Planning, Rule Development & Area Sources, presented this item. The Air Toxic "Hot Spots" Information and Assessment Act of 1987 (AB 2588) requires local air pollution districts to prepare an annual report. Elaine Chang presented the accomplishments of the AB 2588 Program over the period March 1999 to December 2000 and outlined the anticipated activities for the upcoming year. Highlights for the period include program streamlining, finalizing the remaining 134 Phase I health risk assessments (HRAs), the holding of ten public notification meetings, and the approval of nine risk reduction plans. Over the upcoming year, the AB 2588 Program plans to:

There were no questions or comments on the presentation from the Board members or the public.

4. Reg. XXX – Title V Facility Permits, Rule 3003 – Applications, Rule 3005 – Permit Revisions, Rule 3008 – Potential to Emit Limitations

William Thompson, Engineering and Compliance Manager, presented this item which is scheduled for the February Board meeting. Changes to Rules 3003 and 3005 are minor, while a new Rule 3008 is being proposed to provide a mechanism for small facilities to remain exempt from Title V permit requirements. The 1995 EPA policy focussing the program on major sources through the use of actual emissions thresholds will expire soon. There are 25,000 facilities in AQMD jurisdiction that were covered under this policy. Staff believes that the proposed PTE rule is the most streamlined mechanism to allow small sources to demonstrate emissions below the new lower thresholds for federal permits. The two Committee members present advised the item move forward to the Board for hearing.

5. RECLAIM Advisory Committee/Backstop Provision Update

Pang Mueller, Engineering and Compliance Manager presented this status report. At the last Board meeting, the Board requested staff put together an advisory committee to address the issue of the price of RECLAIM Trading Credits (RTCs). RTC prices have increased this year as declining allocations now approximate actual emissions, most companies have not yet installed NOx emission control equipment due to the previously low RTC prices, and high demands by the electric power generators. Demand is higher than supply. The group has met and discussed both short-term and long-term solutions. Additional meetings will follow. A report on recommendations is scheduled to go to the Board for consideration in January. Jane Carney expressed concern over this item coming to the Board without a more thorough discussion. Carol Coy proposed bringing the issues paper to the Board with a staff recommendation including pros and cons of each option to a study session before the January meeting. The Committee was in agreement.

6. Notice of Violation Penalty Summary

The Committee acknowledged the report.

7. Rule Forecast Report

The Committee acknowledged the summary report attached to the agenda.

8. Monthly Report on Home Rule Advisory Group

The Committee acknowledged the summary report.

9. Other Business

Carol Coy brought to the Committee’s attention that there is an additional NOV Penalty Report for the month of October, for their review for the January Governing Board meeting.

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

Attachment

December 1, 2000 Committee Agenda (without its attachments)

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