BOARD MEETING DATE: April 4, 2003
AGENDA NO. 8

Approve Expenditures for Activities and Projects Selected by the California Natural Gas Vehicle Partnership During FY 2003-04, and Reallocate Budget for FY 2002-03

SYNOPSIS:

On April 5, 2002, the Board approved the establishment of a Natural Gas Vehicle Partnership Fund and authorized the Executive Officer to approve expenditures in FY 2002-03 for projects selected by the partnership up to $50,000 for individual expenditures, for a total amount not to exceed $200,000. This action is to: (1) reallocate funds within the Natural Gas Vehicle Partnership's FY 2002-03 Budget, from Natural Gas Vehicle Summit to the Professional Services account; and (2) authorize the Executive Officer to approve up to $50,000 for individual expenditures selected by the partnership in FY 2003-04, for a total amount not to exceed $200,000 for FY 2003-04.

COMMITTEE:

Technology, March 28, 2003, Recommended for Approval

RECOMMENDED ACTIONS:

1. Reallocate $100,000 from the Natural Gas Vehicle Summit to Professional Services account in the California Natural Gas Vehicle Partnership’s FY2002-03 budget originally approved by the Board on April 5, 2002.
   
   
2. Authorize the Executive Officer to approve expenditures for activities and projects selected by the California Natural Gas Vehicle Partnership during FY2003-04 in budgeted amounts not to exceed $50,000 for individual expenditures, $200,000 in total as outlined in Table 1, from the Natural Gas Vehicle Partnership Fund provided there would be sufficient funds available.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

At its February 1, 2002 meeting, the Board approved the work plan for eight Strategic Alliance Initiatives. The Initiatives were set forth to strengthen and create new partnerships at the local, state, and federal level. One of these initiatives was the creation of the California Natural Gas Vehicle (NGV) Partnership with the objective of accelerating the development of advanced natural gas vehicle technologies to provide a benchmark for lowering emissions from petroleum based engines and to provide a pathway to future fuel cell use in the next two decades.

During the past year, the AQMD under this initiative has spearheaded the formation of this strategic alliance (comprised of state and federal air quality, transportation and energy agencies, together with vehicle and engine manufacturers, fuel providers, transit and refuse hauler organizations), to facilitate the advancement of NGV technology and deployment. Under the activities of the partnership, the AQMD has led the formation of the Partnership’s Steering Committee that meets on a quarterly basis with high-level representation from each participating member. The Steering Committee has adopted five specific goals as outlined below and has set a specific agenda to achieve its goals during the next ten years.

1. Promote research, development, demonstration, and deployment and commercialization efforts in the advancement of natural gas engine and fueling technology.
   
   
2. Increase awareness and urge the active participation among local, state, and federal policymakers regarding the use of NGVs and natural gas as a low-emission fuel, and promotion of future advancement in vehicle & fueling technologies to further reduce emissions.
   
   
3. Promote availability of financial and non-financial incentives and technical assistance for deployment of natural gas vehicles and infrastructure.
   
   
4. Encourage the purchase of dedicated NGVs by conducting public outreach for local, state, and federal purchasing programs.
   
   
5. Establish as its goal the deployment of specific numbers and types of light-, medium-, and heavy-duty natural gas vehicles and infrastructure during the next three, five and ten years.

Proposal

The Partnership Steering Committee is comprised of seventeen paying and twenty-one non-paying members. Each paying member contributes a two-year membership fee of $25,000 to fund specific projects to achieve the goals of the partnership. The total contribution amount from the seventeen paying members is $425,000. A special Natural Gas Vehicle Partnership Fund account was approved by the Board to receive the membership fees. In addition, the Board allocated $200,000 from the Partnership Funds to cover FY 2002-03 activities.

In the first year’s budget outline of the California NGV Partnership, $100,000 was designated specifically for a Natural Gas Vehicle Summit. Due to scheduling conflicts and logistics, the NGV Summit has not taken place. Meanwhile, the Partnership’s Steering Committee has approved expenditures for activities such as conducting outreach workshops in California, and establishing and operating a website and mailing of an electronic newsletter to achieve the goals of the Partnership in an expedited manner. At this point, it is more important for the Partnership to fund projects to implement the goals of the Partnership and the $60,000 outlined under the Professional Services account, which was originally allocated in the FY 2002-03 Budget is not adequate to cover the above expenditures. Staff recommends that the Board reallocate $100,000 budgeted for the Natural Gas Vehicle Summit to the Professional Services account in the California Natural Gas Vehicle Partnership’s FY 2002-03 Budget.

In addition, at its April 5, 2002 meeting the Board authorized the Executive Officer to approve individual expenditures up to $50,000 for projects selected by the partnership during the first year of its activity. Staff is recommending that the Board extend this authorization for FY 2003-04. This will continue to expedite the project selection and implementation process, and will help the Partnership’s Steering Committee to function effectively. The proposed FY 2003-04 Budget is outlined in Table 1 below.

Table 1: FY 2003-04 BUDGET OUTLINE FOR THE NGV PARTNERSHIP
 

If for some reason, there is need to modify the above budget by the Partnership’s Steering Committee during FY2003-04, the Executive Officer will report back to the Board and will seek approval for the modified budget.

Benefits to AQMD

The implementation of this initiative has brought public and private stakeholders together and assists in the development and deployment of a specific number of advanced natural gas vehicles and refueling infrastructure expansion over the next five to ten years. This will in turn increase natural gas’s role as a low emission displacement or augmentation to petroleum fuel where economically feasible.

Resource Impact

Total cost of projects for the California NGV Partnership during FY 2003-04 shall not exceed $200,000, provided there would be sufficient funds in the NGV Partnership Fund. The sources of funds are from the Partnership’s membership dues for a two-year period. The AQMD has provided $25,000 to cover membership dues in the Partnership and has provided in-kind support to administer the Partnership activities. There are no other fiscal impacts associated with the recommended action.

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