South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: December 21, 2001 AGENDA NO. 10
Authorize Submittal of Application to Receive Incentive Funds to Assist Agricultural Biomass-to-Energy Conversion in Basin
SYNOPSIS:
California Technology, Trade and Commerce Agency is providing financial incentives to facilities that convert qualified agricultural biomass-to-energy to reduce air pollution due to open-burn of agricultural waste, and reduce burden on landfills. These grants are made to local air districts, which in turn, grant incentive payments to qualifying facilities. Under the provisions of the program, Colmac Energy, Inc. in Riverside County, is potentially eligible to receive up to $40,000 in incentives for February 2002 to June 2002. Board approval to submit an application to receive funds up to $40,000 is requested.
COMMITTEE:
Technology, December 7, 2001, Recommended for Approval
RECOMMENDED ACTIONS:
Barry R. Wallerstein, D.Env.
Executive Officer
Background
California agriculture produces substantial quantities of residual materials from farming practices, including orchard and vineyard pruning and removals. These residual materials are disposed of primarily by open field burning, resulting in air emissions that would be substantially reduced if the residual materials were instead converted into energy at a biomass-to-energy facility. California’s energy policy encourages a diversity of electrical power generation sources, including biomass-to-energy and renewables. Existing biomass-to-energy power plants provide an important alternative use for agricultural residual materials as well as electrical power for the people of California.
California seeks to improve environmental quality and sustain our natural resources, in part through various strategies and programs that reduce agricultural, rangeland, and forest burning, and programs that foster higher value uses for materials that otherwise would be managed as wastes. Under State law, local air districts currently administer air quality permit and emission requirement provisions for various types of project facilities, including those using agricultural residue products as biomass fuel to produce electrical energy.
Incentive Grant Program
The Legislature established the Agricultural Biomass-to-Energy Incentive Grant Program through AB 2872 (Shelley, Chapter 144, July 2000), AB 2825 (Battin and Florez, Chapter 739, September 2000), and SB X2 64 (Costa, Chapter 4, October 2001). This program will provide additional incentives to reduce open field burning of agricultural residual materials that degrade air quality, to produce electrical power from a renewable source, and to foster and sustain the biomass industry, including collection, hauling, and processing infrastructure.
This incentive grant program will permit local air districts to apply for grants from the California Technology, Trade & Commerce Agency to provide financial incentives to facilities that convert qualified agricultural biomass-to-energy in the fiscal year beginning July 1, 2001 and ending June 30, 2002. All applications were due by November 28, 2001. As a result, the AQMD staff has already submitted an application contingent on subsequent Board approval, a copy of which is attached for the Board’s review. The Commerce Agency will assess application for grants contingent upon the receipt of a valid Board Resolution from the applying air district by December 31, 2001.
If selected, the Commerce Agency will award grants to local air districts and air districts will, in turn, grant incentive payments to the facilities. The air districts will be responsible for monitoring and reporting on air emission reductions and the amount of qualified agricultural biomass converted to energy by the facilities. An incentive amount not to exceed $10 will be awarded for every ton of qualified agricultural biomass converted at such facilities. Local air districts are permitted to deduct up to 5% in administrative fees from the total grant to monitor and report facility information including air emission reductions and the amount of qualified agricultural biomass converted to energy by the facilities. These reports will be submitted with invoices.
Colmac Energy Proposal
Colmac Energy, Riverside county, has a qualified 47 megawatt biomass-to-energy plant located in Cabazon, CA. Since 1992, it converted approximately 250,000 dry tons on the average of wood and agricultural waste into electricity annually. Colmac's operation complies with stringent air quality emissions control regulations. It is eligible to receive $38,000 in anticipation of converting 4000 tons of qualified agricultural biomass, primarily orchard trimmings and removals, for a period from February 2002 to June 2002. AQMD is allowed to retain up to 5%, or $2000, to administer this award.
Resource Impacts
If the application for the incentive award is successful, AQMD is expected to receive $40,000. AQMD will, in turn, disburse up to $38,000 to Colmac Energy Inc. and retain up to $2,000, as approved by the program, to administer this award. Monies received from the California Commerce Agency will be deposited and disbursed from the Advanced Technology Fund. This fund was established as a special revenue fund for revenues received as a result of fines, penalties, and settlements from air pollution violations. These settlement payments by the violators are to be used by the AQMD to support the development and demonstration of advanced technologies, and the assessment of resulting emissions benefits.
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