BOARD MEETING DATE: March 1, 2002
AGENDA NO. 9

PROPOSAL:

Execute Additional Contracts to Generate Emissions Credits Under 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 the 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 $23,497,462, on projects approved and recommended by CARB. Staff recommends the reallocation of $1,049,745 from two unexecuted contracts by Tudor, and Cattrac Construction Companies for projects approved by the Board on September 21, 2001, and the expenditure of $1,579,579 from the State Emissions Mitigation Fund on a new round of emission reduction projects for a total of $2,629,324.

COMMITTEE:

Technology, February 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 $2,629,324 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 the 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 $23,497,462 in pass through funds.

Proposal

New project proposals have been evaluated for another round of funding according to the CARB selection procedure. The newly qualified projects under the CARB guidelines are listed in Attachment A. The list shows the cost and the expected NOx and particulate matter emissions reductions for each 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 $2,629,324 with $1,579,579 allocated from the State Emissions Mitigation Fund, and the remaining $1,049,745 reallocated from two unexecuted projects approved by the Board on September 21, 2001 from the previous round of funding. The two projects proponents (Tudor and Cattrac) have submitted letters to the AQMD stating their decision to not execute the contracts.

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 NOx and particulate matter emissions produced by peaking power plants, which must operate to accommodate peak electrical loads. Some of 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 $2,629,324, funded with $1,049,745 from two unexecuted contracts previously approved under this program, and $1,579,579 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 has compiled a list of auxiliary engines on several different boats with the help of Oceanair Envirionmental and has submitted an application to CARB for their funding.

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