South Coast Air Quality Management District

Reauthorize Funding From AES Settlement to Fund Emissions Mitigation Projects and Transfer Marine Vessel Projects from RECLAIM AQIP to the RECLAIM Executive Order Mitigation Account

SYNOPSIS:

On February 16, 2001 and March 16, 2001, the Board authorized emissions mitigation projects for a total of $17 million from the AES Settlement Fund. This penalty settlement was received from AES on a one-time basis. In accordance with the Board resolution, all contracts for projects approved on March 16, 2001 were to be executed within nine or twelve months of Board approval. Due to unforeseen circumstances, several contracts could not be fully executed in the allotted time. Staff proposes reauthorization of select projects for an amount not to exceed $825,000. In addition, staff is proposing to transfer $1,979,380 allocated for marine vessel projects from RECLAIM AQIP to RECLAIM Executive Order Mitigation account and is proposing to transfer $500,000 to the Lower Emission School Bus Program Fund from the RECLAIM AQIP account balance.

COMMITTEE:

Technology, August 23, 2002. Less than a quorum was present during the discussion of this item; the Chairman communicated his concurrence and recommendation that this item be forwarded for Board consideration with no approval or disapproval recommendation from the Committee.

RECOMMENDED ACTION:

1. Reauthorize $500,000 in funding from the AES Settlement Fund to cost share a railroad overpass project with the City of Montclair, which was approved by the Board on March 16, 2001 and authorize the Chairman to execute a contract with the City of Montclair in an amount not to exceed $500,000.
   
   
2. Authorize the Chairman to execute a contract with Occidental College to carry out a demonstration and pilot incentive program to convert perchloroethylene dry cleaners to professional wet cleaners and to provide technical assistance for the promotion of wet cleaning technology, in amount not to exceed $295,000 from the AES Settlement Fund.
   
   
3. Authorize the Chairman to execute a contract with Southern California Edison (SCE) to establish and operate professional wet cleaning technology demonstration site at SCE’s Commercial Technology Applications Center, in an amount not to exceed $30,000 from the AES Settlement Fund.
   
   
4. Transfer the $1,979,380 Marine Vessel Projects from RECLAIM AQIP to RECLAIM Executive Order Mitigation account.
   
   
5. Transfer $500,000 from the RECLAIM AQIP account (Fund 27) via the AES Settlement Fund to the Lower Emission School Bus Program Fund (Fund 32), and solicit additional school bus projects under Program Announcement PA 2003-05.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Staff is proposing reallocation of AES Settlement Funds and expenditures of RECLAIM Executive Order Mitigation Account funds to co-fund several projects that will result in air quality benefits for the South Coast Air Basin. The following is a discussion of the proposed projects to be funded.

On March 16, 2001, the Board allocated $500,000 from the AES Settlement Funds to fund a railroad overpass project with the City of Montclair. This amount was intended to be cost shared with the City of Montclair bringing the estimated total cost of the project to $12 million. However, the contract for this project was not executed within the 12 month period as requested by the March 16, 2001 Board action.

Perchloroethylene (PERC) has been the most common solvent used for dry cleaning. However, due to its potential health and environmental risks, PERC has been classified as a probable carcinogen by the International Association for Research on Cancer, a hazardous air pollutant in the 1990 Clean Air Act, and a toxic air contaminant by AQMD and California Air Resources Board. In addition, PERC has been detected in groundwater at several Super fund sites which, in turn, has escalated the liability risks to ongoing dry cleaning operations and to owners of shopping malls where such operations are located.

One option to eliminate or reduce the health and environmental risks associated with PERC is a water-based garment cleaning technology called professional wet cleaning. This cleaning method is a process for cleaning sensitive textiles (e.g., wool, silk, rayon, linen) in water followed by appropriate drying and finishing processing. The cleaning takes place in equipment consisting of computer controlled washers and dryers.

The AQMD has so far funded three projects pertaining to the professional wet cleaning. An evaluation of the electricity and gas consumption before and after the conversion at one facility showed a decrease in electricity usage by 45% and gas usage by 4%. The monthly average electricity usage while operating PERC dry cleaning operation ranged from 800 to 1500 kWh. This usage was reduced to approximately 400 kWh per month. The total electricity saving was estimated to be about $71 per month or $852 per year, using the average monthly electricity usage of 1,126 kWh, costs of $0.14 per kWh, and 45% reductions in electricity usage.

On July 12, 2002, a Program Announcement (PA #2003-05) was issued for school bus replacement and retrofit projects under the Lower-Emission School Bus Program in an amount not to exceed $10,898,853. The applications for this Program Announcement are due on September 13, 2002.

Lastly, there are sufficient funds in the RECLAIM Executive Order Mitigation Account to fund the Marine Vessel Projects currently funded by RECLAIM AQIP.

Proposal and Benefits to AQMD

Due to unforeseen circumstances, the contracts for Railroad Overpass ($500,000) and Energy Efficiency Programs ($350,000) could not be fully executed in the previously estimated time frames. Also, $522,100 from the RECLAIM Pre-Funded AQIP Program has not been used.

On May 3, 2002, the Board approved $25,000 from the Energy Efficiency Program to execute a contract with a magnet high school located adjacent to the Los Angeles Zoo to assess the effects of using lighter colored roofing materials to improve energy efficiency and to lessen the urban heat island effect. Consequently, staff is proposing to use the remaining $325,000 to fund the wet cleaning technology projects identified as recommended action items 2 and 3.

Staff proposes reauthorization of the following select projects for a total not to exceed $825,000.

1. Staff proposes reauthorization of the City of Montclair grade separation project for the previously Board approved amount of $500,000. This railroad overpass project is proposed for the Ramona Avenue-Union Pacific Railroad Grade separation. Without a grade separation, by 2010 traffic delays will exceed 110 hours per day as vehicles are required to queue for train passage. The delays include 14.6 hours during the a.m. peak hour and 22.4 hours during the p.m. peak hour. By 2020, traffic delays will exceed 150 hours per day. Delays would be expected to exceed 54,000 hours over the course of a year and exceed 2,700,000 hours over the 50-year life expectancy of the structure. Every hour of delay causes additional air pollutant emissions.
   
   
2. Staff proposes to execute a contract with Occidental College to carry out a demonstration and pilot incentive program to convert perchloroethylene dry cleaners to professional wet cleaners, in an amount not to exceed $295,000 from the AES Settlement Fund for commercialization of energy conservation related technology. This will include 14 facilities at a cost of $12,500 each, and $120,000 for outreach and technical assistance for the promotion of wet cleaning technology.
   
   Staff also proposes to execute a contract with Southern California Edison (SCE) to establish and operate professional wet cleaning technology demonstration site at SCE’s Commercial Technology Applications Center, in an amount not to exceed $30,000 from the AES Settlement Fund.
   
   If 14 new wet cleaning demonstration sites are established and successfully operated in different parts of the Basin, it may encourage many existing PERC-dry cleaners and new cleaners to choose professional wet cleaning. This technology is significantly more energy efficient than currently used systems. The projected Basin PERC emission inventory is estimated to be 4.2 tpd. The conversion to wet cleaning will also substantially reduce PERC emissions, thereby decreasing the adverse health impacts of PERC on the general public and garment cleaning industry workers.
   
   
3. The RECLAIM AQIP Program was created to meet the credit demands of the RECLAIM Structural Buyers as defined in Rule 2020. However, at present time, due to availability of lower cost credits in the market, there has been no demand for the credits generated under the RECLAIM AQIP pre-funded program. Staff proposes to transfer $1,979,380 allocated for Marine Vessel Projects from the RECLAIM AQIP program to the RECLAIM Executive Order Mitigation account, where a current demand exists for these credits. This action would restore the pre-funded RECLAIM AQIP account to as much as the original $2 million. Staff proposes to transfer the amount of $500,000 from the RECLAIM AQIP account (Fund 27) to the Lower-Emission School Bus Program Fund (Fund 32) and solicit additional school bus projects under Program Announcement PA 2003-05. This would leave $1.5 million available in the RECLAIM AQIP account to purchase credits in the near future.

The successful implementation of the Lower-Emission School Bus Replacement and Retrofit programs will provide less polluting and safer school transportation for school children, and will reduce public exposure to toxic diesel particulate matter emissions.

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. Specifically, this request for a sole source award to Pollution Prevention Education and Research Center (PPERC) at Occidental College and Commercial Technology Application Center (CTAC) at Southern California Edison is made under Provision B.2.d.1: Projects involving cost sharing by multiple sponsors; and B.2.d.8: Research and development efforts with educational institutions or nonprofit organizations.

Pollution Prevention Education and Research Center (PPERC)
Under the direction of Professor Robert Gottlieb and Peter Sinsheimer, PPERC at UCLA and Occidental College has conducted numerous studies and analyses associated with the wet cleaning demonstrations, which included three projects that the AQMD funded so far in promoting the wet cleaning technology. These projects included technical, environmental, economic and energy evaluation of both wet cleaning and dry cleaning operations. Consequently, PPERC research associates are thoroughly acquainted with professional wet cleaning and thus uniquely qualified to address the myriad of detailed questions that may arise during the proposed project. In addition, PPERC has established valuable contacts within the dry cleaning industry at both the local and national level. PPERC has become part of the Professional Wet Cleaning Partnership (PWCP), a coalition of major national dry cleaning trade associations.

Commercial Technology Application Center (CTAC)
SCE’s Commercial Technology Application Center (CTAC) is a source of information about energy management and efficiency. CTAC is a 42,000 square-foot facility that includes seven technology centers, two classrooms, a computer lab, and a theater-style conference center that accommodates up to 100 people CTAC provide solutions tailored to specific business needs by: promoting energy solutions and customer competitiveness; staying abreast of new energy trends; providing education and consultations, and displays. SCE’s CTAC has in the past worked successfully with the AQMD and the furniture manufacturing industry on UV coating solutions.

SCE’s CTAC has extensive experience in providing assistance to small businesses in the South Coast Basin to comply with the AQMD regulations. This involved installation of low-polluting equipment at CTAC sites, outreaching to affected industries, conducting educational workshops and seminars, demonstrating low-polluting equipment by experienced technicians at CTAC, and training small business operators and owners. In the past, CTAC has helped furniture, musical instrument, repair and maintenance industry members in learning low-polluting technologies to comply with AQMD regulations. This valuable experience of CTAC will be utilized in this project to educate dry cleaners about the professional wet cleaning technology. Based on the above, CTAC has relevant and demonstrated expertise to successfully implement this project. CTAC has also worked in the past with the AQMD on a number of projects.

CTAC is cofunding this project by donating the use of its 42,000 square-foot facility that includes seven technology centers, two classrooms, a computer lab, and a theater-style conference center that accommodates up to 100 people. CTAC provides solutions tailored to specific business needs by providing education, consultations, displays, and equipment demonstrations.

Resource Impacts

The AQMD’s cost sharing for the City of Montclair railroad overpass project is $500,000. As proposed, this amount will be re-authorized from the AES Settlement Fund. This $12 million project meets the federal CMAQ funding criteria for traffic congestion relief and air pollution reduction. Funding from other project partners is also accruing.

Funding of $325,000 for wet cleaning technology will be allocated from the unencumbered funds in the AES Settlement Fund and $500,000 in the RECLAIM AQIP account will be transferred to the Lower Emission School Bus Program Fund.

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