South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: July 20, 2001 AGENDA NO. 10
Establish State Emissions Mitigation Fund, Recognize State Funding, and Authorize Contracts for Credit Generation
SYNOPSIS:
As part of the Governor's statewide program to mitigate excess peaker power plant emissions, the ARB has recommended to transfer some of its State Emissions Mitigation funds to the AQMD for implementation of local projects within the South Coast Air Basin. Staff recommends to establish a State Emissions Mitigation Fund, in order to receive $30,000,000 in State funds from the ARB, and to authorize the expenditure of $12,447,439 to execute contracts for projects that will reduce NOx and particulate matter emissions. Request to approve expenditure for projects from the remaining balance of the fund will be made as new projects are selected.
COMMITTEE:
None
RECOMMENDED ACTION:
Barry R. Wallerstein, D.Env.
Executive Officer
Background
The Governor has recently created a statewide program to mitigate excess emissions from peaker power generation units that are needed to alleviate the power crisis in California. The ARB has been allocated $68 million to fund emission reduction projects that will offset the potential NOx and particulate matter emission increases in the near future. The ARB has solicited and evaluated project proposals in this regard, and will start awarding contracts during the next few months. The ARB has requested that the AQMD administer those emission reduction projects qualified under the ARB guidelines that will be conducted in the South Coast Air Basin. The exact amount of funds allocation for the South Coast Air Basin depends on the cost-effectiveness and technical feasibility of the proposed projects, and the emission reduction credits needed to accommodate the operation of peaker power generation units. Currently, a sum of $30,000,000 from the $68,000,000 fund will be allocated for projects located within the South Coast Air Basin. Depending on the cost and number of potential projects, additional funds may be transferred to the AQMD in the future.
Proposal
AQMD staff proposes to set up a State Emissions Mitigation Fund for receiving ARB funds for NOx and particulate matter emissions reductions projects within the AQMD jurisdiction. Potential projects include repowering of diesel engines in stationary, marine, agricultural, harbor, and truck applications, as well as replacement of diesel engines with CNG and LNG technologies. Attachment A, shows the list of selected projects to date, including their expected NOx and particulate matter emissions reductions. AQMD staff has reviewed and provided input to the ARB for selection of these projects. Once realized, these projects will offset emission increases from peaker power generation units that must operate to supply peak power loads. Total cost of the projects is $12,447,439, including $2,343,298 allocated for MSRC projects. Due to the urgent need to offset emission increases from these peaker power units, AQMD staff proposes that the Board authorizes the Executive Officer to execute contracts for the projects listed in Attachment A. Contracts will be executed for each selected project expeditiously so that the emission reductions can occur as soon as possible.
As additional phases of ARB project awards are announced, the AQMD staff will report back to the Board, and will seek the Board’s approval to award contracts in the same fashion as this Board action.
Benefits to AQMD
The successful implementation of this program will result in mitigation of excess NOx and particulate matter emissions produced by peaking power plants, which must operate to accommodate peak electrical loads. Some of these projects will also produce concurrent toxic compounds emissions reductions, which is an additional benefit. Finally administration of this program at the local level will provide greater certainty and confidence for achieving the emission reductions since the AQMD has a lot of experience and expertise in identifying emission sources and available technologies.
Resource Impacts
Total cost of the proposed projects listed in Attachment A, shall not exceed $12,447,439. The AQMD is expected to receive an initial allocation of $30,000,000 million from the State Emissions Mitigation Fund administered by the ARB, to fund these projects. More funds are expected at a later date. Monies received from the ARB will be placed in a separate fund only to be used for emissions mitigation projects.
List of State Emission Mitigation Projects
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