BOARD MEETING DATE: May 3, 2002
AGENDA NO. 35

Amend Rule 1309.1 – Priority Reserve

SYNOPSIS: 

Technical amendments are proposed to allow a critical public works project access to the Priority Reserve for emission credits. This technical amendment will allow a critical public works project that primarily generates electricity to pump water to maintain the integrity of a municipality or significant portion thereof access to the Priority Reserve. This project was specifically listed in the staff report for the November 2001 amendments allowing electrical generation facilities access to the Priority Reserve subject to specific criteria and requirements.

COMMITTEE: 

Stationary Source, April 26, 2002

RECOMMENDED ACTION:

Adopt the attached resolution:

1. Certifying the Addendum to the November 2001 Final Environmental Assessment (EA) for Proposed Amended Rule 1309.1
   
    
2. Amending Rule 1309.1

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Staff is proposing a technical amendment to Rule 1309.1 to include a critical public works project for eligibility for Priority Reserve credits. This project was identified in the staff report for the November 2001 amendments as a project that would receive credits from the Priority Reserve.

This project is a critical public works project that primarily generates electricity to pump water to prevent subsidence and maintain the integrity of a municipality or significant portion thereof. While this project was expected to receive credits from the Priority Reserve, the rule language as adopted would disqualify this project. The purpose of this amendment is to correct that problem and allow this project access to the Priority Reserve. The project in question is the THUMS Long Beach electrical generating project which will generate electricity for oil field activities and to pump water to prevent subsidence that would otherwise result from those activities. The eligibility criteria and requirements for electrical generation facilities (EGFs), including paying a mitigation fee, will also apply to this project.

Staff has prepared an addendum to the November 2001 Final EA for Rule 1309.1, demonstrating no additional impacts. There are no excess emissions nor any environmental or socioeconomic impacts associated with this amendment.

Proposal

The proposed amendment changes the definition of qualified electrical generation projects to enable this actual public works project access to the Priority Reserve. Thus, projects less than 50 MegaWatts (MW) that generate a substantial portion of their electricity to pump water to maintain the integrity of the surface elevation of a municipality or significant portion thereof would be included as a qualified EGF.

The project will still be subject to all other aspects of NSR including modeling, offsets for non-RECLAIM pollutants, RECLAIM, and BACT or LAER. All other applicable SCAQMD rules and regulations such as toxics and prohibitory rules would continue to apply to projects.

The following requirements apply to projects receiving credits from the Priority Reserve:

CEQA Analysis

Pursuant to the California Environmental Quality Act (CEQA) Guidelines §15164, the SCAQMD has prepared an Addendum to the November 2001 EA for the Rule 1309.1 – Priority Reserve. The Addendum to the Final EA concludes that the proposed changes would not create any new significant adverse impacts or make substantially worse any existing significant adverse impacts generated by the original project. The proposed modification does not change the environmental analysis or conclusions in the previously certified Final EAs. Pursuant to CEQA Guidelines §15164 (c), an addendum need not be circulated for public review. The addendum is attached to this Board Letter. A copy of the previously released CEQA document can be obtained from the SCAQMD’s Public Information Center by calling (909) 396-2039. The previously certified Final EA is being provided to Board Members for their review.

Socioeconomic Impacts

The socioeconomic analysis of the proposed amendments to Rule 1309.1 in April 2001 performed a thorough socioeconomic assessment of the supply of and demand for PM10 credits. A few projects identified at the time have not materialized and the estimated total demand for EGF PM10 offsets was revised downwards in the November 2001, Rule 1309.1 staff report. Furthermore, the demand for PM10 offsets by the proposed project is 52% less than anticipated in the November 2001, Rule 1309.1 staff report. Currently, only about 8% of the amount anticipated in April 2001, and less than 10% of the amount anticipated in November 2001, of the offset demand for Priority Reserve PM10 credits has been issued to qualified EGF’s. As such, the proposed project demand for PM10 credits would have no additional impact on the current PM10 credit market beyond what has been analyzed in the April 2001 Rule 1309.1 socioeconomic assessment, which is incorporated herein by reference. There are no additional socioeconomic impacts associated with this project.

AQMP and Legal Mandates

The California Health and Safety Code requires the AQMD to adopt an Air Quality Management Plan to meet state and federal ambient air quality standards in the South Coast Air Basin. In addition, the California Health and Safety Code requires that the AQMD adopt rules and regulations that carry out the objectives of the AQMP. While Proposed Amended Rule 1309.1 is not a control measure included in the AQMP, its requirements are consistent with the AQMP objectives.

Implementation Plan

No implementation issues are identified with this proposal.

Resource Impacts

The proposed amendments are not anticipated to have a significant impact on staff resources.

Attachments

1. Summary of Proposal
2. Rule Development Flow Chart
3. Key Contacts List
4. Resolution
5. Rule Language
6. CEQA Addendum

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