South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: June 7, 2002 AGENDA NO. 18
Annual Audit Report for Area Source Credit Rule 2506
SYNOPSIS:
Rule 2506 - Area Source Credits for NOx and SOx requires staff to present an annual audit report to the Board describing area source credit activity for the preceding year. This rule established a voluntary emission reduction credit program for unpermitted sources in order to accelerate the introduction of lower-emitting technologies and provide regulated companies with alternative methods of compliance with AQMD regulations. A summary of the activity over the past year is provided in this report.
COMMITTEE:
Stationary Source, April 26, 2002, Reviewed
RECOMMENDED ACTION:
Barry R. Wallerstein, D.Env.
Executive Officer
Background
The AQMD Board adopted Rule 2506 - Area Source Credits (ASCs) for NOx and SOx on April 11, 1997. This rule established a voluntary emission reduction credit program for unpermitted sources in order to accelerate the introduction of lower-emitting technologies and provide regulated companies with alternative methods of compliance with AQMD regulations. Rule 2506 provides for the issuance of marketable ASCs to entities who voluntarily reduce emissions of NOx and SOx from area sources. Regulated companies could convert ASCs into RECLAIM Trading Credits (RTCs) or use them as an alternative means of compliance with other AQMD regulations that allow use of ASCs, such as Rule 2202 – On-Road Motor Vehicle Mitigation Options. The rule created a mechanism to generate emission reductions from stationary sources that do not require AQMD operating permits and are surplus to SIP commitments or applicable rules and regulations. It should be noted that this rule has not been approved by the U.S. EPA.
Rule 2506 requires an annual program audit to verify that the program objectives are met. As described in the previous audit report, AQMD had received two ASC Plans: one from Vinyard Engine Systems, Inc., which was denied by AQMD due to insufficient data, and the second from Southern California Edison (SCE), which was approved in November 2000.
Annual Audit Report
There have been no new ASC applications received by the AQMD, and no new activities with regard to SCE's ASC/RTC trading. For FY 2001-02, 136,368 lbs. of NOx RTCs were issued to SCE. On August 7, 2001, SCE submitted its annual written certification of the continued existence and operation on site of each electric motor that replaced the ICEs listed in their ASC plan. In addition, there has been no change made to the AQMD-approved ASC Plan and the operation continues to be in accordance with the conditions in the Plan.
As indicated in the previous audit report, future credit generation for NOx from diesel-fired agricultural pumps is to be subsumed by Rule 2507 - Pilot Credit Generation Program for Agricultural Pumps.
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