BOARD MEETING DATE: May 2, 2003
AGENDA NO. 5

Execute Contract to Renew AQMD’s Participation in California Fuel Cell Partnership for Calendar Year 2003

SYNOPSIS:

On March 17, 2000, the Board approved AQMD's participation in the California Fuel Cell Partnership (CaFCP) as a full member. The CaFCP is a collaborative group composed of 20 members from government agencies, automobile manufacturers, fuel suppliers, and fuel cell technology providers. The group's primary focus is to demonstrate fuel cell vehicles through on-road operation in California and increase public awareness of these vehicles. This action is to renew AQMD’s participation in the CaFCP in an amount not to exceed $84,000 for calendar year 2003.

COMMITTEE:

Technology, March 28, 2003, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to renew AQMD's membership Participation in the California Fuel Cell Partnership for calendar year 2003 by executing a contract with Bevilaqua-Knight Inc., acting on behalf of the Partnership, for an amount not to exceed $84,000 from the Clean Fuels Fund.

Barry R. Wallerstein, D. Env.
Executive Officer

Background

To attain federal and state clean air standards by year 2010, the AQMP relies on the significant penetration of zero- and near-zero emission technologies in the Basin. Zero-emission fuel cell vehicles are among the cleanest alternatives available to comply with AQMD and CARB regulations.

The California Fuel Cell Partnership (CaFCP) was formally initiated in April of 1999. Through this public/private effort, automobile companies, technology providers, fuel suppliers, and government agencies have joined together to demonstrate fuel cell vehicles under real day-to-day driving conditions. The CaFCP plans to place up to 60 fuel cell passenger cars and fuel cell buses on California roads between 2000 and 2003. There are currently 21 vehicles operating in California through the Partnership today. In addition to testing the fuel cell vehicles, the CaFCP will also identify fuel infrastructure issues and help prepare the California market for this new technology.

The California Fuel Cell Partnership is a collaboration in which several companies and government entities are independent participants. It is not a joint venture, legal partnership, or unincorporated association. The CaFCP membership currently includes eight auto manufacturers (DaimlerChrysler, Ford Motor Company, General Motors, Honda, Hyundai, Nissan, Toyota, and Volkswagen), four fuel companies (BP Amoco, Shell, ChevronTexaco, and ExxonMobil), two fuel cell companies (Ballard Power Systems and UTC Fuel Cells), and six government agencies (AQMD, CARB, California Energy Commission, U.S. Department of Energy, U.S. Department of Transportation, and U.S. EPA).

In addition, associate partners Air Products and Chemicals, Methanex, Praxair, Stuart Energy, Proton Energy, PGE and ZTEK have joined to contribute needed expertise. Three California transit agencies, SunLine Transit, AC Transit, and Santa Clara Valley Transportation Authority are participating as the first host sites for the demonstration of fuel cell-powered transit buses.

The goals of the CaFCP through 2007 include the following:

1. Demonstrate fuel cell-powered electric vehicles under real-world driving conditions in California;
2. Demonstrate the viability of alternative fuel infrastructure technology, including hydrogen and methanol stations;
3. Explore the path to commercialization, from identifying potential problems to developing solutions; and
4. Increase public awareness and enhance knowledge about potential of fuel cell electric vehicles, preparing the market for commercialization.

Phase I of the CaFCP program ran through calendar year 2000, and focused on development of vehicle, infrastructure and outreach plans for future projects. Phase II, which ran through calendar years 2000-01, involves the demonstration of fuel cell cars and buses using gaseous hydrogen fuel. Phase III, which runs through calendar years 2001-03, involves the demonstration of cars and buses using gaseous and liquid hydrogen and methanol. Expansion of this latter phase is beginning to include a limited number of fleet customers beginning in 2002. In addition, the bus transit partners plan to operate several zero-emission fuel cell buses. Members of the CaFCP are committed to the continuation of California Fuel Cell Partnership activities beyond 2003.

Major accomplishments of calendar year 2002 include the following:

• The demonstration of an increasing number of prototype fuel cell cars by several automakers, including the first vehicle placements with City of Los Angeles and University of California fleets;
• Continued operation of gaseous hydrogen fueling with 3600 psi fill and 5000 psi fill at the West Sacramento facility, and added methanol fueling;
• Installed a gaseous hydrogen passenger vehicle fueling station at AC Transit in Richmond;
• Provided training for several emergency response agencies;
• Initiated a two-year Hydrogen Facilities Study, focusing on residential release scenarios;
• Conducted a Technology Forum and led a summit meeting of fuel cell organizations from around the world;
• Held or supported public events throughout California reaching over 200,000 people, including a three-day, 300-mile road rally along California’s Central Coast;
• Distributed 1,000 fuel cell learning kits to middle and secondary school teachers.

Following are some of the activities planned or completed for calendar year 2003:

• Begin to place fuel cell vehicles (FCVs) in the hands of fleet customers in California by CaFCP members;
• Operate up to 60 fuel cell vehicles, together accumulating up to 265,000 miles;
• Add liquid hydrogen fueling to West Sacramento facility and place additional gaseous hydrogen fueling stations in California;
• Promote fueling station interoperability (i.e., common fit and use among vehicles);
• Develop and implement a First Responder training program targeting vehicle and fueling demonstration communities;
• Coordinate with other fuel cell vehicle programs worldwide and begin to promote consistent data collection and evaluation for bus programs;
• Expand outreach to the California public through multiple public events and activities, directly familiarizing at least 500,000 people with fuel cell vehicle and fueling technology opportunities and challenges;
• Distribute 1,000 fuel cell learning kits to middle and secondary school teachers;
• Prepare for a broader rollout of vehicles and fueling in real-world fleet operations during 2004 and beyond;
• Work closely with the environmental community to promote common goals related to clean energy.

Additional information about the California Fuel Cell Partnership can be found at http://www.fuelcellpartnership.org.

Benefits to AQMD

Membership in the CaFCP is consistent with the March 2003 update of the Technology Advancement Plan under 2003CFM2-1, "Demonstration of Fuel Cells Vehicles" and under 2003CFT-4 "Assessment and Technical Support of Advanced Technologies and Information Dissemination." The AQMD supports the development, demonstration and commercialization of zero-emission and near-zero emission fuel cell vehicles, and strives to educate public and private organizations regarding the benefits and characteristics of these vehicles.

The proposed project is included within the scope of the March 2003 update of the Technology Advancement Plan under the following category: 2003CFT-4 "Assessment and Technical Support of Advanced Technologies and Information Dissemination." Real life demonstration of fuel cell vehicles and public outreach efforts will assist in overcoming commercialization barriers for fuel cell technologies. The availability and widespread distribution of this information and technical data would eventually help in accelerating the acceptance of zero-emission fuel cell vehicles. This, in turn, has the potential for wide-scale deployment leading to substantial reductions of criteria and toxic air pollutants. Such reductions would assist the Basin in meeting federal and state air quality standards by year 2010. In addition, deployment of fuel cell vehicles can lead to major multi-media environmental benefits such as improved water quality and reductions in the release of greenhouse gas emissions, such as carbon dioxide.

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. This request for a sole source award is made under provision B.2.d.: Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interest of the AQMD. Specifically, these circumstances are B.2.d.(1): Projects involving cost sharing by multiple sponsors.

Resource Impacts

The AQMD’s share of the calendar year 2003 common project costs in the CaFCP is not to exceed $84,000 to cover administrative, technical and program management cost. AQMD will enter into an agreement with Bevilaqua-Knight, Inc. (BKI). BKI has been retained by the CaFCP, through a subcontract agreement with Ballard Power Systems, to provide the needed support for the common tasks agreed to by the CaFCP.

As listed below, each Partner is providing $84,000 for defraying the costs of the CaFCP including:

• Several auto manufacturers (General Motors, Toyota, DaimlerChrysler, Ford Motor Company, Honda, Hyundai, Nissan, and Volkswagen);
• Four energy companies (BP Amoco, Shell Hydrogen, ChevronTexaco and ExxonMobil);
• Two fuel cell companies (Ballard Power Systems and UTC Fuel Cells); and
• Six government agencies (AQMD, CARB, California Energy Commission, U.S. Department of Energy, U.S. Department of Transportation and U.S. EPA).

Sufficient funds are available from the Clean Fuels Fund, established as a special revenue fund resulting from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.

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