BOARD MEETING DATE: July 11, 2003
AGENDA NO. 32

Implement FY 2002-03 Environmental Justice Enhancement III-2 – Develop an Expedited CEQA Analysis Process for Any Major Project Which Contains Commitments and Milestone Schedules for Implementation of "Super Clean Air Actions" and Amend the District’s Green Carpet Program

SYNOPSIS:

On September 13, 2002, the Board approved the implementation of Environmental Justice Program Enhancements for FY 2002-03. Enhancement III-2 included a proposal to expedite the CEQA analysis process for any major project that contains commitments and milestone schedules for implementing "super mitigation" actions. In response to Board direction, staff established a stakeholder working group, held two working group meetings, and developed a proposal to implement Enhancement III-2 for Board consideration. The staff proposal would allow a permit applicant access to the District’s Green Carpet Program if the permit applicant implements specific clean technologies ("super clean air actions"). The staff proposal also requires amending the District’s Green Carpet Program to add an additional criterion (implementing a super clean air action) to qualify for access to the program.

COMMITTEE:

Mobile Source, June 27, 2003, Reviewed

RECOMMENDED ACTION:

Approve staff proposal to implement EJ Enhancements III-2 ("Super Clean Air Actions") and amend the District’s Green Carpet Program to allow access to projects implementing "Super Clean Air Actions" as described in this letter.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On September 13, 2002, the Governing Board approved the implementation of Environmental Justice Program Enhancement for FY 2002-03. In connection with approving the Environmental Justice Program Enhancement for FY 2002-03, the Board directed staff to implement 23 enhancements to the original Environmental Justice Program divided into three categories. Under Category III: Economic Incentives for Accelerated Mitigation, Enhancement III-2 included a proposal to expedite the CEQA analysis process for any major project that contains commitments and milestone schedules for implementing "super mitigation" actions.

In particular, this proposed enhancement would seek to strike a better balance between community protection and investment stability by offering the incentive of an expedited CEQA process in return for "super mitigation." By agreeing to implement superior emission reduction components to a project that are not otherwise legally required, a proponent would be assured of a speedier administrative review by the AQMD. CEQA timeframes for public comment would remain unchanged. A project with a plan of clear accountability for advanced pollution prevention actions can be rewarded with streamlined review steps. This enhancement could therefore incentivize the incorporation of advanced low- and zero-emission technologies in project planning ("super mitigation").

Between July 31, 2002 and September 5, 2002, the AQMD held eight town hall meetings to solicit input on the Environmental Justice Enhancement proposals. The following concerns regarding this item were raised at that time: proposal III-2 would require a change in state law; the proposal would limit the public’s ability to comment on a CEQA project; and it was unclear what the difference is between "super mitigation" and standard mitigation measures.

Pursuant to Board direction, a working group of diverse stakeholders, including local government, environmental and trade group representatives was formed to make recommendations on streamlining the CEQA process and define "super clean air actions." Two stakeholder working group meetings were held, one in March and one in April. The following proposal is the staff’s recommendation which includes input from the stakeholders’ working group.

Proposal

There are two concepts inherent in Environmental Justice Enhancement (EJE) III-2: 1) reward a project proponent with streamlined review steps resulting in a speedier administrative review; and 2) promote advanced low- or zero-emission technologies in project planning.

To implement the concept of a speedier administrative review, this proposal would allow the project proponent access to the AQMD’s existing Green Carpet Program as the incentive for implementing one or more measures from a specified project list that consists of several low-emitting technologies. The Green Carpet program was initially approved by the AQMD Governing Board in April 1996. The Green Carpet Program establishes a priority permitting service for permit applicants who meet any one of the following criteria:

• "Three Star" Project - Construction of a new facility or modification of an existing one to meet or exceed air emission standards set for the year 2010;
   
• HELP Project - Construction of a new High Employment, Low Pollution facility or modification of an existing one to expand business or create more than 500 jobs, and produce half the emissions per employee allowed under the year 2010 goal for its industry;
   
• Major Capital Project - Implementation of a standard, single-phased design project that costs more than $10 million. Both engineering and construction time must exceed one year each; or
   
• Air Quality Technology Advancement Project - With AQMD's prior written approval companies can apply for the "Green Carpet" service to investigate and research technology advancements designed to reduce emissions.

Access to the Green Carpet Program provides the following services. First, a green team is established to provide permit processing and CEQA analysis assistance. Through the green team, the AQMD commits to a service plan for the permitting and CEQA processes. The service plan contains a schedule of milestones agreed to by the applicant and the AQMD. The Green Carpet Program would also uphold state-mandated public review periods under CEQA, while still providing priority permitting services.

This proposal, therefore, recommends that the Green Carpet Program be amended to add an additional criterion to allow permit applicants access to the Green Carpet Program’s priority permitting services; projects where the permit applicant is willing to voluntarily implement advanced low- or zero-emission technologies.

"Super Clean Air Action"

During the town hall meetings, there was considerable discussion regarding what types of advanced low- or zero-emission technologies would constitute "super mitigation" versus standard mitigation that is legally required. To remove this confusion this proposal includes taking the voluntary action ("super mitigation") out of the CEQA context. Instead of calling the voluntary action "super mitigation," this voluntary action would be called "super clean air action." For the purpose of EJ Enhancement III-2, "super clean air action" is a technology-based action consisting of any one or more of the following: This list will be updated periodically to incentivize early application of clean technologies.

1. Install fuel cells (e.g., phosphoric acid fuel cell) in any stationary or mobile application;
    
2. Purchase new clean fuel school buses with oxidation catalysts;
    
3. Replace diesel engines with clean fuel engines with oxidation catalysts;
    
4. Install particulate traps, oxidation catalysts, and use low sulfur diesel or emulsified diesel additives on existing diesel engines;
    
5. Replace perchloroethylene (perc) dry cleaning machines with non-toxic, non-VOC cleaning alternative (e.g., wet cleaning or CO₂ technologies); or
    
6. Construct anaerobic digesters.

This proposal would be limited to permit applicants who implement voluntary "super clean air actions" that are not otherwise required by law or regulation for at least three years. It should also be noted that any action selected should not otherwise be required by the SIP for at least three years, or any local ordinance, conditional use permit, or legal agreement.

Qualifications/Criteria

In addition to committing to voluntarily implementing "super clean air actions," a project applicant’s project would also have to meet the following criteria before being eligible for access to the Green Carpet Program.

• Lead Agency: This proposal would be limited only to projects where the AQMD is the lead agency under CEQA for the permit application project. This would allow the AQMD to influence the types of voluntary "super clean air actions." Typical projects where the AQMD is the lead agency are refinery and power plant projects.
   
• CEQA Significance Thresholds: This proposal would be limited to projects where the CEQA analysis concludes that the estimated pollutant-specific emissions for the project without the proposed superclean air actions are below the AQMD’s CEQA significance thresholds.
   
• Pollutants: This proposal would apply to permit application projects that emit criteria pollutants (i.e., NOx, SOx, PM10, and PM2.5), VOCs, or air toxics.
   
• Geographic Area: To qualify as a "super clean air action," the low- or zero-emission project shall provide air quality benefits to the local area of the permit applicant’s project site. Therefore, the "super clean air action" should be located within a five-mile radius around the proposed project site. However, exceptions can be made to projects that reduce emissions of a particular pollutant in areas where that pollutant is of concern (e.g., projects that would reduce CO emissions in Lynwood, etc.).
   
• Cost: The AQMD is proposing to establish a minimum amount of funding that the project applicant must contribute toward implementing the clean air technology.
  
  To determine an appropriate minimum cost, the AQMD has identified the incremental costs of acceptable super clean air technologies based on information obtained from existing programs that incentivize advanced clean technologies, primarily the Carl Moyer Program (Table 1). The incremental costs of the least expensive super clean air technologies average approximately $10,000. As a result, $10,000 is recommended as the minimum cost contribution that a facility must make toward a super clean air technology.
  
  For AQMD lead agency projects that are considered to be relatively small, capital costs of approximately $1,000,000 or less, $10,000 dollars represents at least one percent of the total capital cost. Therefore, projects with a capital cost of $1,000,000 or less will contribute the minimum amount toward super clean air technologies, i.e., $10,000. One percent of the total capital cost, therefore, is used as a guide to establish as the minimum cost a project proponent must contribute toward a super clean air action for all other projects with higher capital costs. For example, projects with higher capital costs would contribute at least one percent of their capital costs according to the schedule illustrated in Table 2. Large projects, projects with a capital cost of $10,000,000 or more, automatically have access to the Green Carpet Program. However, project proponents of large projects who wish to voluntarily participate in the super clean air action program to benefit their local communities and to be recognized as such are also recommended to contribute a minimum of one percent of their capital cost toward a super clean air technology.

Table 1
Sample Costs for Super Clean Air Action Technologies
 

Table 1 (Continued)
Sample Costs for Super Clean Air Action Technologies
 

Table 1 (Concluded)
Sample Costs for Super Clean Air Action Technologies
 

Table 2
Minimum Contribution Toward Super Clean Air Action
Based on Proposed Projects’ Capital Costs
 

Project proponents who wish to participate in the Green Carpet Program would fund super clean air actions directly. Once it is determined that a project proponent qualifies for the Green Carpet Program, before the Program is initiated the project proponent must present the AQMD with evidence that funding has been secured for a project to implement a super clean air action. Evidence would consist of a contract or other legally binding instrument.

The AQMD is also evaluating the possibility of establishing a super clean air action fund administered by the AQMD. If such a fund can be established, a project proponent would pay the AQMD the amount required based on the total capital cost of the project (Table 2). The AQMD would then earmark the money toward a qualifying super clean air action technology project in the vicinity of the project proponent’s site.

Implementation of the Green Carpet Program

Because the Green Carpet Program was adopted by the Board, including an additional criterion that would allow a project access to the program requires amending the Green Carpet Program. Therefore, it is proposed that the Green Carpet Program be amended to allow access to projects implementing "Super Clean Air Actions" consistent with this Board letter.

Process and Schedule

If EJ Enhancement III-2 is adopted by the Board, staff would report back to the Board periodically to report on the status of the program, including number and types of projects that have participated in the program, super clean air actions implemented and associated funding, and recommendations for modifications to the program if necessary.

It is expected that implementation of EJ Enhancement III-2 will begin upon Board approval. Existing resources will be sufficient. Future recommendations to add other clean air actions will be brought back to the Board’s Mobile Source Committee for consideration.

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