South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: May 11, 2001 AGENDA NO. 40
Execute Contracts to Fund Marine Vessel Repower Projects Under RECLAIM and Executive Order Mitigation Account
SYNOPSIS:
The AQMD has recently received $5.4 million from power plant operators for compliance with Rule 118 Executive Order #01-03 for NOx and Rule 118 Executive Order #01-04 for CO, as mitigation fees for emissions in excess of RECLAIM allocations. These funds will be placed in the RECLAIM and Executive Order Mitigation Account. There is an immediate availability of very cost effective emission reductions from marine vessel project applications received in response to the Moyer Program RFP. It is recommended that
4618 marine vessel projects be funded from the account in an amount not to exceed $5.4 million, resulting in total NOx reductions of5,5638,688 tons over 20 years.
RECOMMENDED ACTION:
Authorize the Chairman to execute the following marine vessel contracts for emission reductions under the RECLAIM and Executive Order Mitigation Account:
- A contract with Ocean Air to purchase
5332 new ARB certified diesel-fuel engines for3716 marine vessels, in an amount not to exceed$3,398,000$5,253,262$4,454,900.from the RECLAIM and Executive Order Mitigation Account.
- A contract with Seaboard Marine to purchase
81 new ARB certified diesel-fuel enginesfor71 marine vessels, in an amount not to exceed$415,876$81,600from the RECLAIM and Executive Order Mitigation Account.
- A contract with Millennium Maritime to purchase 4 new ARB certified diesel-fuel engines for 1 marine vessels, in an amount not to exceed $798,362
from the RECLAIM and Executive Order Mitigation Account.
A contract with American Maritime to purchase 4 new ARB certified diesel-fuel engines for 1 marine vessels, in an amount not to exceed $754,023 from the RECLAIM and Executive Order Mitigation Account
Barry R. Wallerstein, D.Env.
Executive Officer
Background
On January 17, 2001 Governor Davis proclaimed a State of Emergency in response to the imminent threat of widespread and prolonged disruption of electrical power. In response, the AQMD Executive Officer, on February 6, 2001, executed Rule 118 Executive Order #01-03 for NOx emissions and Rule 118 Executive Order # 01-04 for CO emissions. As part of the executive order, mitigation fees for emissions is excess of RECLAIM allocations from RECLAIM-power producing facilities having the capacity to produce 50 MW or more, would be paid to the AQMD. These funds would then be used to mitigate the excess power plant emissions. Since May 1, 2001, AQMD has received $5.4 million as mitigation fees pursuant to the Executive Order from AES.
The Carl Moyer Memorial Air Quality Standards Attainment Program (Moyer Program) provides funding for the incremental cost of implementing low emission heavy-duty vehicle technologies. ARB developed overall program requirements and criteria, and allocated funds to local air districts for program administration to reduce NOx emissions from heavy-duty vehicles and off-road equipment. The Board at its April 20, 2001 hearing approved the use of $2 million dollars from the $17 million AES settlement to fund marine vessels that were previously unfunded from last year’s Moyer Program due to lack of funding.
Proposal
The AQMD staff received proposals under the current Moyer Program for marine vessel engine repowering, totaling over $8 million dollars. The total funding allocated to this category under the Moyer Program is $2 million. The recommended projects are immediately available, can be implemented in the next three to nine months and are very cost effective. The staff recommends that
4618 marine vessel projects be funded from the RECLAIM and Executive Order Mitigation Account for an amount not to exceed $5.4 million. The funded projects will result in total NOx reductions of
5,5638,688 tons over 20 years. A small fraction of the $5.4 million was collected to mitigate CO emissions. The staff estimates that the CO emissions that can be derived from these marine vessel projects greatly exceed the emission requirements.
Staff will use the emission credit generation protocol contained in Proposed Rule 1631 for this set of projects. If for any reason U.S. EPA doesn’t subsequently SIP approve PR 1631, the projects will be transferred to the Moyer Program and Moyer funding used to reimburse the mitigation fee account so that alternative projects can be funded.
Benefits to AQMD
The conversion of diesel marine vessels to low emissions technology is very cost effective and can reduce significant amounts of NOx emissions at an extremely competitive price as compared to other categories. The
4618 proposed marine vessel projects would produce real and surplus NOx emission reductions to offset excess emissions due to operations under the Executive Order.
Resource Impacts
The available funding of $5.4 million is a result of mitigation funds and will not impact AQMD resources. The proposed projects, funding amounts, and emission reductions are illustrated in Table 1.
Table 1 – Marine Vessel Repower Project
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