BOARD MEETING DATE: November 9, 2001 AGENDA NO. 31

There are approximately 35 truck stop facilities in the jurisdiction of the AQMD. A common practice for operators of heavy-duty diesel-fueled trucks is to idle their truck engines while at truck stops to provide cooling and heating to the interior cab, keep the truck engine and fuel warm during cold temperatures, and to use in-cab appliances. To reduce emissions due to engine idling, truck stop electrification can be used. Truck stop electrification is the practice of using electric power in lieu of idling the main truck propulsion engine or auxiliary engine to power truck systems and trailer refrigeration units during extended periods of time at truck stops.

In Spring 2001, the AQMD Board adopted five pilot credit generation rules to provide opportunities to generate NO_x credits from specific mobile and area source categories that can be used in the RECLAIM program. Throughout the development of the pilot credit generation rules and Proposed Rule 1634, AQMD staff has been working with a Credit Trading Working Group that includes business and environmental representatives and representatives from CARB and EPA. AQMD staff worked closely with CARB and EPA to develop a pilot program for generation of NO_x MSERCs that will meet state and federal requirements. Although EPA has not yet commented on Proposed Rule 1634, the proposed rule follows the model of the previously adopted pilot credit generation programs which are expected to obtain EPA approval in the near future.

A Public Workshop was held on August 10, 2001 to solicit comments from potentially affected facilities and parties (see Key Issue Section of this board letter).

Proposed Rule 1634 is designed as a voluntary program that allows any person that elects to generate NO_x MSERCs to participate. The proposed rule applies to any entity who supplies electric power at truck stops for use by truck operators to run appliances inside truck cabs, on-board truck systems, and trailer refrigeration units, and by providing heating, ventilating, and air conditioning to truck cabs at truck stops in order to eliminate the operation of diesel-fueled engines used by trucks and trailer refrigeration units.

The existing pilot credit generation rules establish the foundation for requirements under Proposed Rule 1634. Proposed Rule 1634 excludes emission reductions from public air quality related funding programs or emission reductions that are required by another program or action. Credits will be issued up to an Evaluation Year, which is 2006. At the Evaluation Year the AQMD, CARB, and EPA will assess if future credits should be discontinued or discounted to ensure emission reductions remain surplus.

Under the proposed credit generation rule, a credit generator is required to submit an application and meet credit generating requirements including monitoring, reporting and recordkeeping requirements. The proposed credit generation rule also includes penalty provisions for the generator and users for shortfall and MSERCs or false information. Beginning April 2003, the proposed rule requires that a program review be conducted every two years to assess the efficacy of the pilot program.

Proposed Rule 1634 will provide localized air quality improvements to those areas where truck stops are located by reducing diesel emissions from idling truck engines. If all long-term parking spots in the basin were converted to provide HVAC to truck cabs, the estimated amount of NO_x credits generated could be up to 940 tons per year. However, the amount of NO_x credits would depend on the number of participants, converted truck stop parking spaces, and hours of activity level. In addition, under the proposed rule, a nine percent environmental discount is applied to all NO_x credits generated. One percent of NO_x credits generated may be used to fund Rule 518.2 - Federal Alternative Operating Conditions offset program. If the Rule 518.2 funding is not needed, these credits will be retired for the benefit of the environment. Implementation of the proposed credit generation rule will also reduce diesel particulate matter (PM) and toxic emissions. Regional air quality benefits will result relative to ozone and PM levels as well.

In accordance with CEQA, AQMD staff prepared a Draft Environmental Assessment (EA) for the proposed project. No comments were received on the Draft EA. The Final EA for Proposed Rule 1634 is included as Attachment H of this Board package.

Proposed Rule 1634 is a voluntary program where credit generation will occur where it is found beneficial to the credit generator. The cost-effectiveness of Proposed Rule 1634 depends on which credit generation project is being implemented, cost of implementation, and lifetime emission benefits. Implementation of the proposed rule will provide an option for MSERC generation. The cost-effectiveness of Proposed Rule 1634 depends on the implementation cost, number of years credits can be obtained, and the price those credits receive. Overall, a cost savings is expected for RECLAIM facilities that elect to use credits generated under proposed pilot credit generation rules.

Through the development of the pilot credit generation programs, the AQMD staff has worked with the Credit Trading Working Group to address issues. Many of the issues involving credit generation and use have already been resolved through the public process for the five recently adopted pilot credit generation rules. The primary issue of Proposed Rule 1634 is establishing the baseline emission factor for diesel-fueled heavy-duty truck engines while idling at truck stops. AQMD staff has concluded that the baseline emission factor should reflect the CARB EMFAC2001 Emission Inventory Model emission factor for idling diesel-fueled heavy-duty truck engines to ensure that the emission reductions are surplus to the SIP and the proposed rule meets state and federal requirements.

Proposed Rules 1634 - Pilot Credit Generation Program for Truck Stops

Voluntary pilot program that allows sources to generate NO_x MSERCs that can be used in RECLAIM.
Credit generation is based on providing electric power and pre-conditioned air to trucks while at truck stops within district boundaries in lieu of operating their main propulsion or auxiliary diesel engines.
Requirements for generating credits include: submittal and approval of an application, implementation of credit generation project, compliance with monitoring, recordkeeping, and recording requirements, and either quarterly validation or annual reconciliation provisions.
Credits will be issued until the evaluation year, which is 2006. An evaluation by the AQMD, CARB, and EPA will be conducted to assess if any future credits remain surplus.
An environmental discount will be applied to all MSERCs generated.
Penalty provisions apply to the generator and user of credits.

Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops

Issue

A representative from the business community has commented that the baseline emission factor specified in the proposed rule is too low and does not take into account the actual idling conditions of a diesel-fueled heavy-duty truck engine at a truck stop.

Response
To ensure Proposed Rule 1634 meets state and federal requirements, the baseline emission factor must be consistent with baseline emissions that are assumed in the SIP. The current SIP does not include truck idling emissions. The revised Air Quality Management Plan (AQMP) is expected to incorporate mobile source idling emissions and their assumptions from EMFAC2001. EMFAC2001 assumes a baseline emission rate of 80.7 grams per hour (g/hr) for truck idling emissions. Although the emission factor used in EMFAC2001 may conservatively estimate emissions from truck idling at truck stops, 80.7 g/hr is appropriate as a default baseline emission factor for credit generation since emissions testing is not a requirement of Proposed Rule 1634.

A Resolution of the Board of the South Coast Air Quality Management District certifying the Final Environmental Assessment prepared for Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops.

A Resolution of the Board adopting Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops.

WHEREAS, the Board has determined that Proposed Rules 1634 - Pilot Credit Generation Program for Truck Stops is a "project" pursuant to the terms of the California Environmental Quality Act (CEQA); and

WHEREAS, the South Coast Air Quality Management District has had its regulatory program certified pursuant to Public Resources Code, Section 21080.5 and has conducted CEQA review pursuant to such program (AQMD Rule 110); and

WHEREAS the Draft EA was circulated for a 30-day public review and comment period from August 22, 2001 to September 20, 2001. No comments were received on the Draft EA; and

WHEREAS, a Mitigation Monitoring Plan pursuant to Public Resources Code Section 21081.6 has not been prepared since no mitigation measures are necessary; and

WHEREAS, the AQMD Board voting on Proposed Rule 1634, has reviewed, considered, and hereby certifies the Final EA; and

WHEREAS, the Governing Board has determined that the socioeconomic impact assessment of the Proposed Rules 1634 - Pilot Credit Generation Program for Truck Stops is consistent with the Governing Board March 17, 1989 and October 14, 1994 resolutions and the provisions of Health and Safety Code Section 40920.6; and

WHEREAS, the Governing Board has reviewed and considered the staff's findings related to cost impacts of Proposed Rules 1634 - Pilot Credit Generation Program for Truck Stops as set forth in the Staff Report, and hereby finds and determines that cost impacts are as set forth in that assessment; and

WHEREAS, an economic impact assessment concluded that Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops will not impose any additional compliance costs on affected sources, and as such, will not result in any adverse economic impacts; and

WHEREAS, the Governing Board has determined that Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops is not a control measure in the 1997 Air Quality Management Plan (AQMP) in 1999 and thus was not ranked by cost-effectiveness relative to other AQMP control measures in the 1997 AQMP; and

WHEREAS the Governing Board has determined that a need exists to adopt Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops to implement a pilot program that will create opportunities to generate NOx MSERCs for use in RECLAIM while meeting state and federal approvability requirements; and

WHEREAS, the Governing Board of the South Coast Air Quality Management District obtains its authority to adopt, amend, or repeal rules and regulations from California Health and Safety Code Sections 39002, 40000, 40001, 40440.1, 40702, 40714.5, and 42303; and

WHEREAS, the Governing Board has determined that Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops has been written or displayed so that its meaning can be easily understood by the persons affected by it; and

WHEREAS, the Governing Board has determined that Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops, as proposed to be, is in harmony with, and not in conflict with or contradictory to, existing federal or state statutes, court decisions, or regulations; and

WHEREAS, the Governing Board has determined that Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops, as proposed to be, does not impose the same requirements as any existing state or federal regulation and the proposed rule is necessary and proper to execute the powers and duties granted to, and imposed upon, the District; and

WHEREAS, the Governing Board has determined that Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops, as proposed to be, references the following statutes which the AQMD hereby implements, interprets or makes specific: Health and Safety Code Sections 40440.1, 40702, 40714.5, and 40725 through 40728; and

WHEREAS, the Governing Board has determined that the California Health and Safety Code Section 39616 findings are not altered by these amendments; and

WHEREAS, a public hearing has been properly noticed in accordance with the provisions of Health and Safety Code Section 40725; and

WHEREAS, the Governing Board has held a public hearing in accordance with all provisions of law; and

WHEREAS, the AQMD specifies the manager of Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops as the custodian of the documents or other materials which constitute the record of proceedings upon which the adoption of this proposed amendment is based, which are located at the South Coast Air Quality Management District, 21865 E. Copley Drive, Diamond Bar, California; and

WHEREAS, the AQMD will closely track and monitor the credits generated and used under Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops and report on a monthly basis to the Stationary and Mobile Source Committees; and

NOW, THEREFORE, BE IT RESOLVED, the Governing Board directs staff to report applications approved and RTCs used annually as part of the annual RECLAIM audit report; and

BE IT FURTHER RESOLVED, that the AQMD Governing Board directs staff to track each of the source categories applicable to the proposed rules separately in the AQMP and to closely monitor credit generation and use; and

BE IT FURTHER RESOLVED, that the AQMD Governing Board hereby certifies, pursuant to the authority granted by law, the Final EA for Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops; and

BE IT FURTHER RESOLVED, that the Governing Board does hereby adopt, pursuant to the authority granted by law, Proposed Rule 1634 - Pilot Credit Generation Program for Truck Stops, as set forth in the attached and incorporated herein by reference.