South Coast Air Quality Management District

Approve Issuance of Program Announcement and Application to Solicit Projects Under the CARB Emission Reduction Credit Bank

SYNOPSIS: 

On March 8, 2001, CARB was directed by Executive Order of Governor Gray Davis to establish an emission reduction credit (ERC) bank. Subsequently, CARB and the AQMD entered into an agreement to implement this program for powerplant peaking units located in the South Coast Basin. In July 2001, the AQMD issued two letters of transactions to Wildflower Energy and Alliance Colton, LLC for credit usage in offsetting NOx and PM10 emissions. In exchange for these emission reduction credits AQMD collected a total of $675,550 from Wildflower Energy LP and Alliance Colton, LLC. Staff recommends issuance of a Program Announcement and Application to fund emission reduction programs near these facilities and/or within Inland counties with the collected funds.

COMMITTEE: 

Technology, October 25, 2002. Less than a quorum was present during the discussion of this item; the Vice Chair communicated his concurrence and recommendation that this item be forwarded for Board consideration with no approval or disapproval recommendation from the Committee.

RECOMMENDED ACTION:

Approve issuance of Program Announcement and Application #PA 2003-07 for the Emission Reduction Credit Bank for Peaking Powerplant Program in the South Coast Air Basin, in an amount not to exceed $675,550 from the CARB ERC Bank Program Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In early 2001, CARB established the Emission Reduction Credit Bank for Peaking Powerplants. The purpose of the program is to offset emissions associated with powerplants that need to expand or add new facilities in response to the California Energy Crisis. Subsequently, AQMD entered into a Letter of Agreement with CARB for implementation of CARB's ERC Bank for peaking power plants. For the three facilities, InterGen North America (Wildflower Energy LP) and Alliance Colton, LLC Drews Substation and Alliance Colton, LLC Century Substation, AQMD issued 197.4 tons/yr of NOx credits and 10 tons/yr of PM credits at a total cost of $675,550. The collected money will be awarded to project proponents that formally submit an application that meet the minimum program requirements of Program Announcement, #PA 2003-07, and are preferably located within the general vicinity of the aforementioned powerplant facilities (located in Colton and Palm Springs) and/or within the Inland counties.

In accordance with the Letter of Agreement signed by CARB and the AQMD this program will terminate on November 1, 2003 or three years after the date that all emission reduction credit projects have been funded, whichever is later.

Proposal

Staff proposes to issue Program Announcement and Application #PA 2003-07 to implement emission reduction projects in the general vicinity of the Wildflower Energy LP and Alliance Colton, LLC powerplant facilities, and/or within the Inland counties. The total amount of money available for project funding will not exceed the $675,550 collected from these two powerplants that were issued ERCs under the Peaker Powerplant Funding Program. This solicitation is tailored for a range of PM and NOx reduction projects that will be implemented in the near term.

Outreach

In accordance with the AQMD's consulting and contracting policies, a public notice advertising the RFP and inviting bids will be published in the following publications:

Additionally, potential bidders will be notified utilizing the Los Angeles County MTA Directory of Certified Firms, the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; and AQMD's own electronic listing of certified minority vendors. Notice of the RFP will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD's Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon, or http://www.aqmd.gov/busjob/] and AQMD's bidder's 24-hour telephone message line (909) 396-2724.

Benefits to AQMD

The successful implementation of this program will result in mitigation of excess nitrogen oxides and particulate matter emissions produced by peaking power plants which operate to accommodate peak electrical loads. It is expected that projects funded through the CARB Emission Reduction Credit Bank for Peaking Powerplants will also produce concurrent toxic compounds emission reductions (e.g. lower diesel exhaust particulate), which is an additional benefit. Finally, administration of this program in San Bernardino and Riverside counties will further the emission reduction progress AQMD has made in demonstrating strategies and technologies in pursuit of clean air goals.

Resource Impacts

The AQMD has collected $675,550 under the CARB Emission Reduction Credit Bank for Peaking Powerplants Funding program. The $675,550 collected from the Wildflower Energy LP and Alliance Colton, LLC powerplant facilities in exchange for the NOx and PM emission reduction credits will fund a range of qualifying emission reduction projects as part of the application process under this Program Announcement.

Attachment

Attachment 1 - Program Announcement and Application #PA 2003-07 to Solicit Projects Under the CARB Emission Reduction Credit Bank

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