South Coast Air Quality Management District

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Adopt Proposed Rule 1196 – Clean On-Road Heavy-Duty Public Fleet Vehicles

SYNOPSIS:  

Proposed Rule 1196 will require public fleet operators with 15 or more heavy-duty vehicles to purchase rule compliant heavy-duty vehicles when adding or replacing heavy-duty vehicles in an existing fleet or forming a new fleet.

COMMITTEE:  

Mobile Source, August 25, 2000 and September 22, 2000, Reviewed.

RECOMMENDED ACTION:

Adopt the attached resolution:

1. Approving the finding that potential adverse environmental impacts from adopting Rule 1196 – Clean On-Road Heavy-Duty Public Fleet Vehicles are within the scope of the previously prepared and certified Final Program Environmental Assessment for the Proposed Fleet Vehicle Rules and Related Rule Amendments, and no new environmental document is required; and
   
   
2. Adopting Rule 1196 – Clean On-Road Heavy-Duty Public Fleet Vehicles

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The recent results from the AQMD Multiple Air Toxic Exposure Study (MATES-II) indicates that mobile source emissions are major contributors to the potential cancer risk from air pollution in the South Coast Air Basin. In addition, mobile source emissions have become the major emission sources to the ozone, fine particulate matter and carbon monoxide air quality problem in the South Coast Air Basin. Despite current regulatory actions that have reduced overall mobile source emissions dramatically over the past twenty years, and will continue emission reductions in the future, additional mobile source emissions reductions are needed in the near-term. As such, the AQMD Governing Board has directed staff to evaluate ways to reduce mobile source emissions within the AQMD’s regulatory authority.

Under the California Health and Safety Code (HSC) Section 40919(a)(4), "serious" or worse ozone nonattainment areas may require "the use of a significant number of low-emission motor vehicles by operators of motor vehicle fleets." The definition of "low-emission motor vehicles" is further defined in HSC, Section 39037.05. Section 39037.05 excludes the use of diesel fuel in the "low-emission" vehicle definition. However, vehicles that operate on gasoline that are certified at hydrocarbon emission levels that are twice as low as the applicable hydrocarbon exhaust emission standards by year and class are considered "low-emission" [HSC Section 39037.05(c)]

In addition to Section 40919(a)(4), under HSC Section 40447.5 the AQMD may adopt rules requiring public and private fleets with 15 or more vehicles to acquire vehicles using "methanol or other equivalently clean burning alternative fuel" when "adding to or replacing vehicles in an existing fleet or purchasing vehicles to form a new fleet" and to require that these vehicles be operated substantially on alternative fuels.

Proposal

For PR 1196, staff is proposing that beginning July 1, 2002, public entities such as local, state, and federal governments, and special districts such as air, water, sanitation, and school districts, purchase CARB-certified alternative-fueled, dual-fuel, or gasoline heavy-duty vehicles. A public fleet operator may apply for a "Technical Infeasibility Certification" if a demonstration is made that an alternative-fueled engine/chassis/body specification is not commercially available, could not be used in a specific application, the cost-effectiveness of purchasing a rule compliant vehicle does not meet the criteria for cost-effectiveness required in the Carl Moyer or MSRC program, or if an alternative-fuel refueling station is not available within five miles of the vehicle storage or maintenance yards. Upon approval of a Technical Infeasibility Certification, the public fleet operator may purchase a non-rule compliant heavy-duty vehicle. However, the vehicle must be equipped with a CARB-certified control device.

At this time, PR 1196 provides exemptions to vehicles used for emergency and rescue such as police, fire, and paramedic vehicles. HSC Section 40447.5 states that these vehicles be exempted until such time that the AQMD Governing Board makes a finding that the "alternative fuel is available at sufficient locations so that the emergency response capabilities of those vehicles is not impaired." PR 1196 also exempts up to ten vehicles used for testing/evaluation purposes, heavy-duty military vehicles used in tactical operations, vehicles that transport materials in and out of the District, short-term vehicle leases by the U.S. Postal Service during peak winter holiday periods, vehicles operated by entities with jurisdictions outside of the District if these vehicles are housed temporarily in the District, vehicles operated in the Riverside County portion of the Mojave Desert Air Basin operated by state agencies or special districts, and private heavy-duty fleets that provide services or contracted by public entities for services such as landscape or office deliveries. Relative to private fleets providing services to public entities, some of these fleets may already be subject to other AQMD clean fleet vehicle rules such as Rules 1192 – Clean On-Road Transit Buses, 1193 – Clean On-Road Residential and Commercial Refuse Collection Vehicles, 1194 – Commercial Airport Ground Access, and 1186.1 – Less-Polluting Sweepers.

In addition to the above exemptions, PR 1196 proposes that no more than three diesel-fueled vehicles be kept at any one facility for emergency purposes when the remainder of the fleet consists of heavy-duty vehicles that are rule-compliant. In addition, a fleet operator may deploy the total number of exempt vehicles under this provision to any one vehicle storage or maintenance yard if the operator submits a plan demonstrating that a proportionate number of such vehicles are reduced at other vehicle storage or maintenance yard operated by the public fleet operator. This provision is proposed to address concerns raised by several public entities regarding interruption in supply of alternative fuels during emergency situations. Given that it may take at least four to five years (and perhaps up to ten years) for a fleet to fully consist of rule compliant vehicles before this concern may become a significant issue, staff will closely monitor the implementation of PR 1196 and report to the Governing Board on the availability of alternative fuels during emergency situations.

In November 1999, staff originally proposed an umbrella on-road motor vehicle fleet rule (PR 1190) and a preliminary draft staff report was prepared and released in December 1999. Two public workshops were conducted (December 21, 1999 and January 12, 2000) at which over 700 members from the public attended in total. The most significant comments made were: costs associated with alternative-fueled vehicle purchases and maintenance, development of alternate-fueling infrastructure, availability of alternative-fueled engines/chassis specifications to meet certain medium- and heavy-duty vehicle applications, and that the rule development schedule was too aggressive and more time was needed for public review and input.

In response to these comments, staff separated the original PR 1190 proposal into several standalone rule development efforts that cover each of the specific fleet vehicle types (i.e., light- and medium-duty vehicles, transit vehicles and urban buses, refuse collection vehicles, school buses, street sweepers, heavy-duty vehicles, and airport ground access). The separation of PR 1190 into seven separate rules provided the public a better understanding of the impacts of the rule development and staff the ability to address rule implementation issues more specifically. In addition, the rule development schedule was extended to allow more time for the public to review and comment on each of the rule proposals. The preliminary draft staff report (dated December 1999) continued to serve as the initial basis for the staff report for the seven separate rule proposals.

Draft rule language for PR 1196 (the sixth in the series of "PR 1190" fleet rules), was released on August 16, 2000. An additional public workshop was conducted on August 24, 2000 to solicit further public comments. A draft staff report on PR 1196 was released on August 22, 2000 that represented a revision to the December 1999 Preliminary Draft Staff Report on PR 1190. A public consultation meeting was conducted on September 27, 2000 to solicit further comments and inputs regarding the rule proposal.

In addition to the public workshops, a series of fleet rule public meetings were conducted with affected parties to seek specific comments on the impacts of the fleet vehicle rule proposals including heavy-duty vehicles covered under PR 1196. Implementation issues focused primarily on the wide variety of heavy-duty vehicle applications in public fleets, alternative-fuel fueling infrastructure availability, the additional funding needed to purchase alternative-fueled vehicles, vehicles housed outside of the District operated by public entities with jurisdiction outside of the District, and concerns regarding alternative fuel availability during emergency situations. These issues are discussed further in the following sections.

AQMD staff received a significant number of comments relative to the development of the public fleet rules as discussed above. In addition to comments received at the public meetings, several comments were made regarding implementation of PR 1196 at the August 24, 2000 Public Workshop. Most of the discussions focused on the need to have conventionally fueled vehicles during emergency situations since the supply of alternative fuels may be limited or "cutoff". As described earlier, PR 1196 provides exemptions to allow public fleets to keep up to three diesel-fueled vehicles in a fleet with less than 100 heavy-duty vehicles to address this issue. For fleets with more than 100 vehicles, a fleet may keep up to three diesel-fueled heavy-duty vehicles at each of its facility. In addition, a fleet operator may deploy a greater number of such vehicles at one vehicle storage or maintenance yard if the operator submits a plan demonstrating that a proportionate number of such vehicles are reduced at other vehicle storage or maintenance yards operated by the public fleet operator. Staff will closely monitor the expansion of the alternative-fuel refueling infrastructure and the availability of the alternative-fuel supply for emergency situations.

As with the other clean fleet vehicle rules adopted to date, the concerns regarding alternative fuel infrastructure and the additional cost of purchasing alternative-fueled vehicles continue to be of concern relative to implementation of PR 1196. Since the proposed implementation date is July 1, 2002 and during the interim there will be continued expansion of the alternative fuel infrastructure (one fuel provider has indicated that they have on order over 20 new stations to be built within the next year), staff would monitor the infrastructure development and periodically report to the Governing Board on the status of the fueling infrastructure. In addition, several entities indicated that propane-powered vehicles may be a preferred alternative-fuel vehicle given the greater availability of propane fueling locations. Relative to PR 1196, staff is proposing that if a heavy-duty vehicle fleet does not have access to an alternative-fuel refueling station within five miles from the vehicle storage or maintenance yard needed for rule compliant vehicles in the fleet, the public fleet operator may apply for a Technical Infeasibility Certification. The conventionally-fueled vehicle purchased upon approval of the Technical Infeasibility Certification would have to be equipped with a CARB-approved control device.

Relative to additional cost of alternative fuel vehicles, staff believes that given the wide variety of fuel technologies allowed under PR 1196 including gasoline, the amount of funds needed to implement PR 1196 is much smaller than originally anticipated. As such current programs such as the MSRC, Local Government AB 2766 Programs, and the Carl Moyer Program would provide sufficient funds to cover the majority of the vehicles under PR 1196. Staff will monitor the implementation of these funding programs and other programs as they become available. In addition, the Technical Infeasibility Certification process allows a fleet operator to purchase a conventionally-fueled vehicle (equipped with a CARB-approved control device) if the incremental cost-effectiveness of the rule-compliant vehicle is demonstrated to exceed the cost-effectiveness criteria established for the Carl Moyer or MSRC programs, whichever is the greater.

Several comments were made regarding public entities located in the District with jurisdiction in areas outside of the District. Public entities such as the U.S. Postal Service, Caltrans, and Metropolitan Water District provide services outside of the District and would deploy heavy-duty vehicles from other areas into the District for specific projects. In addition, these agencies would deploy vehicles located in the District to other areas outside of the District. As an example, Caltrans operates a small number of special application vehicles such as lane strippers in Northern California during the summer months. These vehicles are deployed in Southern California during the winter months and are used in road construction or upgrades. In addition, since the AQMD’s jurisdiction does not cover all of Los Angeles, Riverside, or San Bernardino counties, any vehicles operated by the county that are normally operated or housed outside of the District boundaries may be deployed within the District for specific projects. To address this issue, PR 1196 proposes that heavy-duty vehicles operated by federal, state, or county agencies or special districts with jurisdiction outside of the District, would be exempted from the requirements of PR 1196 if these vehicles are operated or housed in the District for no more than 180 days.

Staff released for public review a draft version of the "Technical Infeasibility Certification" application form on September 27, 2000. In addition, staff provided initial guidance on criteria for demonstrating technical infeasibility. While the Technical Infeasibility Certification would not be utilized until the late 2001 time frame, staff believed that the development of this process should be started as early as possible. Staff received several comments relative to the draft Technical Infeasibility Certification application form. Besides clarification comments, two issues have been raised relative to streamlining the application process and the cost for submitting an application.

Relative to streamlining the application process, a comment was made that a pre-bid process should be developed so that fleet operators would know beforehand which heavy-duty vehicles could be approved as technically infeasible to comply with Rule 1196. Staff believes that such a process would be beneficial and recommends that the details of such a process be developed within the first six months of adoption of Rule 1196.

Relative to the cost associated with submitting an application, staff recommends that an appropriate fee schedule be developed as part of the next Regulation III amendments which will take effect for Fiscal Year 2001-02 upon approval of the Governing Board. In addition, staff will establish a list of heavy-duty vehicles that are deemed technically infeasible under Rule 1196. This list would be used by fleet operators to purchase vehicles with minimal information to be submitted to the AQMD. Therefore reducing the costs associated with an application submittal.

In addition to the comments discussed above, staff received comments that a "fleet averaging" control approach should be allowed where fleet operators would determine the appropriate means of achieving emission reductions through reducing emissions from heavy-duty vehicles in the existing fleet. This control approach would be intended to allow the purchase of diesel-fueled vehicles while still meeting overall emission reduction targets. Several fleet operators commented to AQMD staff that such an approach would not be suitable for fleet operators since it would involve having to keep track of the certified emission level of the engine in each vehicle in the fleet, calculating a fleetwide average, and developing a plan to demonstrate how specified emission reductions would or could occur, each time the fleet operator decides to purchase new vehicles to add or replace vehicles in a fleet.

To address this comment, staff met with several operators of public fleets of varying sizes. Some of the operators agreed that in concept such an approach could be workable and would make sense economically. Other operators, however, indicated that such an approach could be "gamed" such that there would be minimal emission benefits even though targeted reduction levels could be demonstrated. Staff believes that such an averaging approach is not necessary or appropriate given the amount of flexibility in the rule proposal. In addition to the potential gaming of the approach, staff believes that double counting with other control measures and accounting for natural fleet turnover are additional concerns. For example, as part of the Statewide Diesel Control Plan, ARB is developing programs to reduce emissions from existing on-road and off-road diesel combustion sources. Many of these programs will involve retrofitting or repowering of existing diesel engines. These programs to address existing engine emissions would reduce any potential emission benefits from an averaging approach. Also, engine manufacturers have entered into a settlement with U.S. EPA and ARB relative to mitigating past excess in-use emissions which presents another emissions accounting issue. Therefore, staff is not recommending the inclusion of a fleet averaging concept in PR 1196 at this time.

PR 1196 would affect approximately 5400 diesel fueled heavy-duty vehicles in the current public fleets today. Based on an average purchase/ replacement rate of five years for light- and medium-duty vehicles and 10 years for heavy-duty vehicles, it is estimated that by 2010, nitrogen oxide emissions would be reduced by 74 tons/year and particulate matter emissions by 8.2 tons/year. In addition, there would be a reduction in air toxic emissions. Finally, Rule 1196 will promote technology advancement that will likely result in emission reductions beyond those indicated above.

In accordance with the California Environmental Quality Act (CEQA), the AQMD, as the Lead Agency, has reviewed the proposed fleet vehicle rules and related rule amendments, which includes PR 1196. Pursuant to state CEQA Guidelines Sections 15168 and 15252, the AQMD prepared a Draft Program Environmental Assessment (PEA) for the proposed project which was released on March 10, 2000 for a 45-day public review and comment period. The Draft PEA analyzed potential adverse environmental impacts that are comprised primarily of cross-media impacts, including air quality, water resources, transportation, energy, hazards, public services and solid/hazardous waste, from refinery modifications to produce low sulfur fuel and construction of alternative fuel refueling stations. The analysis concluded that short-term construction-related air quality impacts were significant. Significant adverse construction air quality impacts were related primarily to refinery modifications to implement the amendments to Rule 431.2. All comments received on the Draft PEA were addressed and incorporated into the Final PEA for the proposed fleet vehicle rules including PR 1196.

The Final PEA for the proposed fleet vehicle rules and related amendments was certified by the SCAQMD Governing Board at the June 16, 2000 Public Hearing on three of the fleet vehicle rule proposals (Rules 1191, 1192, and 1193). CEQA Guidelines §15168(c) states that, "Subsequent activities in the program must be examined in the light of the program [EA] to determine whether an additional environmental document must be prepared." CEQA Guidelines §15168(c)(2) states further, "If the agency finds that pursuant to Section 15162, no new effects could occur or no new mitigation measures would be required, the agency can approve the activity as being within the scope of the project covered by the program [EA], and no new environmental document would be required." The Final PEA analyzes potential adverse environmental effects of the overall fleet vehicle rule program as specifically and comprehensively as possible given the level of detail of the program. The environmental analysis in the Final PEA provides sufficient detail of the potential adverse environmental impacts generated by the proposed fleet vehicle rule program in general, that the environmental effects of implementing PR 1196 are considered to be within the scope of the Final PEA. Therefore, no further environmental documentation is required [CEQA Guidelines §15168(c)(5)].

AQMD staff has also prepared an Economic Report for the Proposed Fleet Vehicle Rules which includes PR 1196. The Economic Report was approved by the Governing Board on June 16, 2000 as part of its action on Rules 1191, 1192, and 1193. Additional socioeconomic impact assessment of PR 1196 was conducted and is provided as part of the PR 1196 Staff Report. Based on the assessment, it is envisioned that the majority of the capital cost differential associated with the purchase of alternative fueled vehicles can be covered by the various financial incentive packages. Comments were raised that there would be additional operational and maintenance costs associated with alternative fuel vehicles compared to conventionally fueled vehicles. Additional socioeconomic impact assessment was conducted under four funding scenarios: no available funding, full funding, most-likely funding, and least-available funding. The socioeconomic assessment indicates that the cost effectiveness of PR 1196 would be $31,760 per ton of criteria pollutant reduced under a "most-likely" funding scenario. The cost-effectiveness includes capital and operational costs. The cost-effectiveness ranges from no costs (full funding scenario) to $165,043 (no funding scenario) per ton of combined criteria pollutant reduced.

PR 1196 would require public fleet operators to purchase alternative-fueled vehicles at the time the operators are adding or replacing vehicles in their fleets. It is envisioned that operators will specify in their procurement process the purchase of heavy-duty vehicles that would be Rule 1196 compliant. Staff believes that there will be minimal resource impacts on the AQMD since fleet operators keep records of their purchases and procurement information. There will be small administrative costs associated with random inspection of fleet operators for rule implementation and enforcement purposes and the tracking of the penetration of alternative fueled vehicles into the market.

Staff recommends that proposed Rule 1196 be adopted. The proposed rule will provide criteria pollutant air quality and toxic air pollutant benefits.

Attachments

1. Summary of PR 1196 Proposal
2. Rule Development Process
3. Resolution
4. Proposed Rule 1196 Language
5. Staff Report
6. Final Environmental Assessment (available to the Public upon request)

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