BOARD MEETING DATE: August 1, 2003
AGENDA NO. 4

Execute Contracts for Projects under CARB Emission Reduction Credit Bank Program

SYNOPSIS:

In May 2001, AQMD and CARB entered into an agreement to implement the CARB Emission Reduction Credit Bank program to offset NOx and PM10 emissions from new or expanding peaking powerplants. In exchange for emission reduction credits, AQMD collected $257,950 from Wildflower Energy LP and $417,600 from Alliance Colton, LLC, for funding emission reduction projects in the vicinity of these facilities. Staff proposes to fund CNG refueling infrastructure projects and the purchase of an alternatively fueled heavy-duty vehicle for a total of $675,550.

COMMITTEE:

Technology, July 25, 2003, Recommended for Approval

RECOMMENDED ACTIONS:

1. Authorize the Chairman to execute a contract with the Colton Joint Unified School District to fund the expansion of a CNG refueling infrastructure in an amount not to exceed $302,600 from the CARB ERC Bank Program Fund.
    
2. Authorize the Chairman to execute a contract with the Coachella Valley Unified School District to fund a CNG refueling infrastructure in an amount not to exceed $257,950 from the CARB ERC Bank Program Fund.
    
3. Authorize the Chairman to execute a contract with URS Corporation to purchase a CNG heavy-duty vehicle for the City of Colton Public Utilities in an amount not to exceed $115,000 from the CARB ERC Bank Program Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In May 2001, AQMD and CARB entered into an agreement to implement the Air Resources Board Emission Reduction Credit Bank for Peaking Powerplants. The purpose of the program is to generate emission credits that will be provided to powerplant peaking units that need emission offsets in order to add or expand peaking capacity that started operating on or after September 30, 2001.

In July 2001, AQMD issued Letters of Transaction for CARB ERC Bank Offsets to Wildflower Energy, LP and Alliance Colton, LLC, which provided NOx and PM10 credits. In exchange for emission reduction credits, AQMD collected $257,950 from Wildflower Energy, LP and $417,600 from Alliance Colton, LLC, for funding emission reduction projects in the vicinity of these facilities.

To implement this program, a Program Announcement (#PA 2003-07) was released in December 2002 to solicit projects. In response to this solicitation, AQMD received eight proposals.

Outreach

A public notice advertising the Program Announcement and inviting bids was published in the following publications:
 

1.	Antelope Valley Press	10.	Korea Central Daily	19.	Precinct Reporter
2.	Black Voice News	11.	La Opinion	20.	Press Enterprise
3.	Chinese Daily News	12.	La Prensa Hispana	21.	Rafu Shimpo
4.	Desert Sun	13.	La Voz Publications	22.	San Bernardino Sun
5.	Eastern Group Publications	14.	Los Angeles Daily News	23.	State of California Contracts
6.	El Chicano	15.	Los Angeles Sentinel		Register
7.	El Informador	16.	Los Angeles Times	24.	The Excelsior
8.	Inland Empire Hispanic News	17.	Orange County Register	25.	The Signal
9.	Inland Valley Daily Bulletin	18.	Philippine News	26.	Wave Community Newspapers

Additionally, potential bidders were notified utilizing the Los Angeles County MTA and Cal Trans Directories of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notice of the RFP was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon] and AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Bid Evaluation

The proposals received in response to the CARB ERC Bank Program Announcement are listed in Table 1.

Table 1
Proposals Received
 

The proposals were evaluated by a panel consisting of three AQMD staff members. The scoring system was based on the proximity of the proposed projects to the Wildflower Energy, LP and Alliance Colton, LLC, powerplants, the cost effectiveness of the projects, the use of alternative fuels, and the project completion dates. The scores for the proposals are listed in Table 2.

Table 2
Bid Evaluation
 

The scoring and selection criteria of the projects were discussed and agreed upon by CARB.

Proposal

Staff proposes to approve the expansion of a CNG infrastructure project at Colton Joint Unified School District for an amount not to exceed $302,600 and the construction of a new CNG infrastructure at Coachella Valley Unified School District for an amount not to exceed $257,950. The availability of CNG fueling from these projects will enable Colton and Coachella Unified School districts to fuel and operate 32 and 17 CNG school buses, respectively. Staff also proposes to fund the purchase of a CNG heavy-duty vehicle for an amount not to exceed $115,000 with URS Corporation for the City of Colton. Staff has disclosed the list of submitted proposals to CARB and discussed the evaluation panel's recommendations with them. CARB has agreed with the panel's recommendation contingent upon not using Carl Moyer funds for any part of the projects and also not to claim SIP credits. The funding amounts and the associated emission reductions are listed in Table 3.

Table 3
CARB ERC Bank Program Recommended Projects
 

Benefits to AQMD

The successful implementation of the CARB Emission Reduction Credit Bank program will result in mitigation of excess NOx and PM10 emissions produced by peaking power plants which operate to accommodate peak electrical loads. It is expected that projects funded through the CARB Emission Reduction Credit Bank for Peaking Powerplants will also produce concurrent toxic compounds emission reductions, which is an additional benefit.

The funding of CNG refueling infrastructure has the potential to achieve long term air quality benefits by embracing cleaner fuel technology that will reduce carcinogenic exposure risk to children that would otherwise occur through the operation of diesel fueled school buses. The proximity of these infrastructure projects to the Wildflower Energy, LP and Alliance Colton, LLC powerplants will help offset excess emissions generated by these powerplants, and also reduce toxic emissions as an added benefit. The purchase of a new CNG heavy-duty vehicle at the City of Colton will help offset emissions from the Alliance Colton, LLC powerplant.

Resource Impacts

The total cost of $675,550 for the proposed projects listed in Table 3 will be funded from the CARB ERC Bank Program fund.

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