BOARD MEETING DATE: April 5, 2002
AGENDA NO. 8

Execute Additional Contracts to Generate Emissions Credits Under the State Emissions Mitigation Program

SYNOPSIS:

At the July 20, 2001 meeting, the Board established the State Emissions Mitigation Fund to recognize up to $30,000,000 in State funds from CARB. This action was in response to the Governor’s statewide program to mitigate excess emissions from peaker power generation units. The Board has so far approved the expenditure of $26,126,786 on projects approved and recommended by CARB. Staff recommends the expenditure of $566,547 from the State Emission Mitigation Fund, and the reallocation of $339,912 from projects approved by the Board on July 20, 2001, for Arrow Tek and Port of LA that were executed for lesser amounts. The new round of emission reduction projects will be for a total of $906,459.

COMMITTEE:

Technology, March 22, 2002, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Executive Officer to execute contracts to fund projects listed in Attachment A, selected pursuant to the CARB’s requirements within the South Coast Air Basin, in an amount not exceeding $906,459 from the State Emissions Mitigation Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Governor recently created a statewide program to mitigate excess emissions from peaker power generation units that are needed to alleviate the power crisis in California. CARB solicited project proposals in this regard, and has requested that the AQMD administer these emission reduction projects qualified under CARB guidelines that will be conducted in the South Coast Air Basin. In response to this request, the Board at its July 20, 2001 meeting, approved the establishment of the State Emissions Mitigation Fund. Since then, the Board has approved emission reduction projects recommended by CARB, amounting up to $26,126,786.00 in pass through funds.

Proposal

New project proposals have been evaluated for another round of funding according to the CARB’s selection procedure. The newly qualified marine vessel auxiliary engine re-power projects under CARB guidelines are listed in Attachment A. The list shows the cost and the expected NO_x and particulate matter (PM) emissions reductions for this project. 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 recommended projects is $906,459 with $566,547 allocated from the State Emission Mitigation Fund, and $339,912 from projects approved by the Board on July 20, 2001, for Arrow Tek and Port of LA that were executed for lesser amounts.

Due to the urgent need to offset emission increases from these peaker power units, staff recommends (with CARB concurrence) that the Board authorize 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 CARB 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 NO_x and PM emissions produced by peaking power plants, which must operate to accommodate peak electrical loads. These projects will also produce concurrent toxic compounds emissions reductions (e.g. lowered diesel exhaust particulate), 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 acquired experience and expertise in identifying emission sources and available control or prevention technologies.

Resource Impacts

Total cost of the proposed projects listed in Attachment A, shall not exceed $906,459 funded with $339,912 from previously approved projects under the State Emissions Mitigation Program but executed for lesser amounts, and $566,547 from the State Emissions Mitigation Fund. Sufficient funds are expected from CARB to be placed in the AQMD State Emissions Mitigation Fund.

Attachment

List of State Emission Mitigation Projects

Attachment A: List of State Emission Mitigation Projects
 

*AQMD compiled a list of auxiliary engines on several different marine vessels with the help of OceanAir Envirionmental.

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